Why the Cloud Holds More Benefits for HR Than You Think
Implementing SaaS within the HR function requires changes to strategy and planning, but the rewards are significant.
A rapidly changing workforce and business climate are among the greatest challenges businesses face today. Chief human resources officers (CHROs) are moving to the cloud as they come under pressure to save costs, seek greater agility and much-needed independence from the IT department, and focus on improved innovation and mobility.
We are in an age of significant change and HR is in the centre of it all. What are organisations doing with cloud, what are the trends, and how are emerging technologies starting to shape the future of HR? PwC worked with Oxford Economics to survey leaders who work in (or support) HR from more than 650 international companies about their organisation’s use of HR technology.
Three quarters of respondents in the PwC survey plan to have core HR in the cloud within three years, and other HR related processes are already there or on the way as well.
Cloud is not seen as just another technology platform, but is expected to be transformative on multiple fronts. Companies see cloud as a way to lower their dependence on an IT function that already has many responsibilities (64%), and as a way to lower the cost of ownership (63%).
They also hope to stay ahead of internal customer demand by taking advantage of more frequent software innovations (45%).
The HR Technology Survey, ‘Innovating for tomorrow’s workforce: Transformation enabled by HR in the Cloud’, found that the number of companies using cloud software-as-a-service (SaaS) for core HR solutions has climbed to 44% (up from 23% on the previous survey) with an additional 30% planning to move in the next one-to-three years.
Five key findings of the study
- More than two-thirds of respondents have some HR applications in the cloud, and a similar number have mobile HR apps, but greater adoption is needed in the future.
- The key barriers to successful implementation are lack of organisational readiness to give up customisations, varying levels of process transformation is required, and product functionality must be addressed too.
- The cloud software marketplace is fragmented, and many organisations are focused on consolidating their vendor portfolio. 40% of the respondents are planning to use fewer vendors. Top motivations for consolidation included easier vendor management, better support, and better integration.
- Operating in a cloud environment is an adjustment; 25% say the incorporation of frequent, new releases requires additional staff to support and 36% note that new releases that bring desired enhancements often destabilise their environment.
- HR analytics is not getting the focus it deserves; 52% do not have a dedicated HR analytics team and nearly 40% do not have an HR analytics strategy.
What does HR want from the cloud?
The primary motivators for deploying cloud SaaS for HR-Related processes were a need for less dependence on IT, lower cost of ownership, the ability to take advantage of software innovations and quicker release cycles, a lack of infrastructure to host and manage the software internally, the ability to ability to access processes via mobile device, and a desire for a less costly and complex environment.
Going big on mobile is a key
The survey points out that mobile applications and devices have changed the way work gets done, with both managers and employees demanding cloud platforms and mobile functionality.
According to PwC: ‘Leaders must push their organisations to be more bold and ambitious in mobile deployment. When deploying HR applications to employees and managers in the field, companies should adopt a “why not mobile?” mantra that encourages the constant expansion of tools and functionality.’
As an example of pent-up demand, 59% of respondents felt it would be beneficial for employees and managers to be able to use their mobile devices for performance feedback. Yet only 18% of companies leverage mobile for the performance management process.
The partnership between HR and IT is crucial to successfully plan and execute the HR technology roadmap.
Create a detailed implementation plan, set appropriate expectations, and establish a solid governance model for decision-making before deployment. Organisational readiness for the high level of transformation required will go a long way to increasing the odds of a successful implementation and benefits realisation.
When selecting a vendor, communicate your non-negotiable requirements, understand the vendor’s longer-term product strategy, the other offerings in the product portfolio that may be deployed later, their approach to issue resolution, and their release and maintenance schedules.