While we covered the above in our previous article, we also delved into common challenges organisations face, like inefficiencies, compliance risks, employee retention and shared key strategies for evaluating HR tech solutions, ensuring investments align with long-term goals. Building on this, it’s important to recognise that while HR technology is essential, its success often depends on having the right expertise and resources to implement, manage, and optimise it. The real challenge lies in ensuring these tools operate seamlessly and adapt to evolving organisational needs. This is where an Application Managed Service (AMS) in Human Capital Management (HCM) becomes essential. Whether fully outsourcing key functions or simply providing additional support for internal teams, Managed Services can increase the value of HR technology by ensuring seamless operation and enabling HR leaders to focus on strategy.
In this article we'll help you discover if AMS is the right solution for your HCM needs.
What is an Application Managed Service
An AMS involves outsourcing the ongoing maintenance, optimisation, and support of business critical applications to a specialised third-party provider. This agreement enables organisations to ensure their software operates efficiently and aligns with their strategic objectives without dedicating internal resources to its management. AMS providers typically cover a wide range of responsibilities, including technical support, software updates, performance monitoring, and enhancements to improve functionality and usability.
Key Benefits of An Application Managed Service
1. Boosting Efficiency and Productivity
AMS relieve internal HR teams of routine administrative tasks such as payroll processing and employee benefits management. By outsourcing these essential but time-consuming duties to a specialist provider, HR teams can shift their focus to more strategic goals, such as employee development and talent retention. With expert support, companies experience greater operational efficiency, allowing HR professionals to prioritise initiatives that improve company culture and employee engagement.
2. Reducing Costs and Simplifying Budgeting
Running an in-house HCM system often requires significant investment in technology, personnel, and training. AMS can help reduce these expenses by offering scalable solutions tailored to business needs. Instead of investing in multiple tools and resources, organisations can bundle services through an HCM provider, enabling more efficient spending and predictable budgeting. This is particularly valuable for small and medium-sized businesses seeking to grow while managing costs effectively.
3. Access to Cutting-Edge Technology
AMS providers deliver access to advanced technology platforms, often integrating AI, machine learning, and analytics to optimise HR processes. For example, AI-powered tools can forecast employee turnover, analyse engagement trends, and streamline recruitment. Additionally, cloud-based self-service portals empower employees to manage their own HR needs more autonomously. These technologies allow organisations to make data-driven decisions and improve efficiency without the expense of purchasing or maintaining complex software.
4. Ensuring Scalability and Flexibility
As businesses evolve, so do their HR requirements. AMS provide scalability to meet changing needs, whether it’s handling workforce growth or downsizing operations. This flexibility allows organisations to expand into new markets or adjust headcount without overwhelming their HR teams. By tailoring services to align with business changes, AMS ensure that HR processes remain seamless, enabling companies to focus on their strategic objectives.
5. Enhancing the Employee Experience
A positive employee experience is crucial for retention and morale. AMS providers streamline HR services, offering employees quick access to resources like payroll, benefits, and time-off requests. This efficiency reduces frustration, improves service delivery, and fosters a sense of value among staff. An enhanced employee experience translates into higher satisfaction, better engagement, and increased productivity across the workforce.
6. Expertise and Industry Best Practices
AMS come with access to specialists who bring extensive knowledge and best practices. These experts are well-versed in handling complex HR challenges, resolving issues efficiently, and continuously refining HCM processes. They also stay updated on legislative changes, industry trends, and technological innovations, ensuring organisations remain compliant and competitive. This expertise elevates the quality of HR operations and strengthens overall business performance.
7. Focusing on Strategic HR Goals
By delegating administrative responsibilities such as compliance, payroll, and benefits management to an AMS provider, HR leaders gain the freedom to focus on strategic initiatives. This might include enhancing diversity and inclusion efforts, implementing employee development programmes, or improving talent acquisition strategies. With the administrative burden lifted, HR teams can align their efforts with broader organisational goals, driving business growth and fostering a cohesive workforce.
Conclusion
AMS within HCM, whether fully outsourced or used as a supporting function, offer a wealth of benefits that go beyond simple task automation. They enable companies to operate more efficiently, reduce costs and gain access to advanced technology while providing a better experience for employees. Most importantly, they empower HR professionals to focus on strategic, high-impact initiatives that contribute to a stronger company culture and greater organisational success. By leveraging the advantages of AMS, companies can transform their HR operations and ensure they are prepared to meet the demands of an evolving workforce.
Embracing AMS is more than a cost-saving measure, it’s an investment in a more agile, resilient, and people-focused organisation.