HROT January/February 2014 - 51

Given the momentum around cloud-based systems, it may
seem surprising that more than one third of organizations
are still leveraging on-premise HR technology solutions.
In fact, Aberdeen's recent HCM Trends survey found that
organizations have several concerns when making a move
to the cloud including security, integration, and control over
data. Although staying on-premise may be the right option
for some organizations, cloud solutions offer tremendous
benefits to any organization looking to keep pace in today's
changing workforce.
In 2014, organizations will invest in learning, employee
performance management, and talent acquisition technology.
Although these are some of the more mature areas of HCM,
they also present the greatest opportunity for change.
Currently, more than 50 percent of organizations have
invested in the same HR providers for three years and will
likely be due for upgrades. It is inevitable that many of these
companies will be looking to overhaul their legacy systems
and consider a new delivery model in the next few years.
For many of these organizations, making a move to a cloudbased
provider is a natural next step. Cloud solutions are
becoming a compelling differentiator and a key factor in
all HCM technology decisions as a way to improve processes
and provide a better experience. According to Aberdeen's
2013 HCM Trends: It's a Brave New World report, cloud-based
services are the preferred delivery model for 31 percent of
leading organizations.
Although a move to the cloud may seem inevitable, Aberdeen
identified several barriers to moving from on-premise to
cloud:
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Security concerns
Lack of support from IT for integration
Lack of support for change management
Losing control of data
By providing the right communication and preparing for
this change, organizations can overcome these barriers
and make this transition to cloud more seamless. Recently,
I spoke with industry expert and consultant for Black Box
Consulting Carole Seymour around the change management
that is involved with moving from on-premise to SaaS.
In a cloud-environment, the responsibility for managing
the vendor relationship typically shifts from IT to HR. As
a result, HR leaders must ask providers critical questions
about integration, data centers, back-up hosting, privacy
requirements, and compliance with Safe Harbor. Cloud
solutions often include more frequent updates, which will
require additional resources for training. But playing a
greater role in its technology implementation and training
will enable HR to maximize its investment in a cloud solution.
As organizations move to the cloud, a few of the immediate
benefits include:
Efficiency. The most obvious benefit of a cloud investment is
that IT no longer needs to focus on hardware, maintenance,
and operating systems. Instead, cloud technology providers
are able to handle all IT-related functions, allowing internal
IT departments to focus on more strategic workforce
management initiatives. By investing in cloud, IT can focus
on other areas such as exploring and implementing potential
changes in scheduling practices to streamline costs.
Access to HCM data. A cloud environment allows
organizations to have access to data anytime and anywhere.
HCM solutions in the cloud allow HR to respond to business
needs in a timely manner and present critical information that
may have been difficult to access with on-premise systems.
Also, since 48 percent of organizations are still managing
and integrating data manually according to Aberdeen's 2013
HCM Trends: It's a Brave New World report, the cloud helps
to make this data easily accessible and more visible to key
stakeholders.
Reduced costs. Moving to the cloud allows organizations to
remain agile and flexible enough to achieve growth goals in a
highly competitive market. In addition to the costs savings to
IT with less hardware and maintenance expenses, Aberdeen
found that revenue per full-time employee increased by 5
percent and administrative costs decreased by 5 percent.
Madeline Laurano is research director of human capital
management for Aberdeen Group.
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HROT January/February 2014

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