Is Now the Right Time for My HR Organization to Consider a Move to the Cloud?

The inexorable march toward digital transformation is in full swing. Whether working to compete effectively in the “war for talent,” intent on implementing a true intelligent enterprise, or simply trying to respond to the differing expectations of five generations in the workforce, an organization will need to move to more flexible, diverse, and mobile systems – and sooner rather than later.

There are pros and cons, but the data seems to point strongly towards transformation. Every organization will need to examine its own unique situation, performing the due diligence and creating the proper business case to make a truly educated decision on its own migration, including the opportunity cost of not making the move.

The Pros and Cons of Moving to the Cloud

What are the considerations? On the business side, one can make countless arguments for digitalization:

  • The Human Revolution and the war for talent are real.
  • A workforce comprised of multiple generations and more than 40 percent contingent workers is the norm.
  • The ability to hire and retain the very best talent is critical to success.
  • The employee-employer relationship of the past is no more. Today’s employee desires options and flexibility like never before.
  • Standard, transparent, employee-friendly processes, mobile capabilities, personalized learning, and proactive coaching and development are table stakes.
  • The employee experience is becoming very prominent.
  • Flexible and more enjoyable work environments as well as innovative, collaborative tools supporting agile, dynamic, and virtual teams are becoming ubiquitous.

An organization also needs to use things like machine learning and artificial intelligence (AI) to make the best business decisions. These decisions, based on the intelligent insights gained from technology, are perfectly aligned with a well-known and understood set of business priorities. The goal is to create a differentiated talent experience, making the organization an employer of choice and gaining a distinct advantage over the competition.

Overarching all this evidence are fundamental questions about the technology as well as an organization’s readiness for the cloud. There are equally as many considerations in this equation and they are often more challenging to quantify and overcome.

  • Security: Employee and customer data, access, backups, and more will be in the hands of the cloud service provider. This is a radical and a sobering notion to some, but the concerns can be addressed. Tightly managed access and data protections, centralized data repositories, and backup and redundancy strategies should be part of any provider’s offering. Selecting a service provider with a flawless security record that you implicitly trust is critical, but you should nevertheless be diligent. Ask questions. Test the strategies and technologies. Consider starting the journey to the cloud with a smaller, less critical application. Get comfortable before making larger investments.
  • Privacy: With the ever-increasing scrutiny on data privacy, utilize a trusted provider with a proven track record and completely understand the terms of service, privacy policy, and practices.
  • Compliance: Various geographical and regional standards and regulations, whether for taxes, other payroll considerations, or GDPR, represent a concern. In some ways, the cloud inherently mitigates these apprehensions, as applications have built-in compliance features updated continuously through periodic releases. Nonetheless, it remains imperative for each organization to understand all such global regulations and how the new application fulfills its obligations.

Assessing Internal Readiness

In terms of an organization’s internal readiness for a move to the cloud, there are several additional considerations. How willingly and quickly does the employee population and user base adapt to new technologies? Is there a robust change management function in place to help with enablement and support? Who will “own” the implementation and deployment? Will it be IT or human resources (HR) and do each have a common goal in mind?

Deployments of cloud applications require far less time and resources than implementations in the past, but they nevertheless require significant effort on the part of subject matter experts and project managers alongside executive sponsorship, support, and input. A large, global organization will require many dedicated resources to analyze, design, configure, and test a series of applications.

Because of the dynamic, fast-moving, iterative nature of cloud software deployment, these teams of dedicated SME’s will require the autonomy and authority to act quickly. Effective and efficient communication between HR, the lines of business, senior management, and IT is crucial.

The cloud also affords companies an opportunity to simplify processes and align to leading practices. But, the organization needs to be willing to adopt such practices and discard outdated, traditional ones. Once again, a robust change management team and system is critical.

What’s the Next Move?

The cloud can increase functional capabilities and help standardize and adopt leading practices. It is infinitely scalable. It can eliminate large, costly upgrades, replacing them with automatic, opt-in, quarterly updates to applications. The cloud will reduce long-term capital expenditures associated with hardware and teams maintaining highly customized code. IT costs are more predictable, and the return on investment (ROI) is generally quick.

A cursory analysis generally suggests that benefits outweigh the investment, but initial costs, resource availability, other compelling events, and organizational readiness are critical factors to consider.

Take the time to create a business case. Perform comprehensive due diligence. Rely on a trusted service provider and implementation partner for assistance in thinking through business case considerations. Embrace the relationship with the provider as a true partnership. It will make the journey much more effective, efficient, and enjoyable.

Jeffery Pytel is vice president of North American Cloud HCM Services at SAP.