2017-05-08 hrexaminer photo img Steve Pruden is Appirio’s Senior Vice President of Human Resources spruden.jpg

Steve Pruden is Appirio’s Senior Vice President of Human Resources and a contributor to The HRExaminer.

Cloud-based solutions and tools can be an HR team’s best friend in the workplace. However, it has taken some time to fully realize its potential because of the rate technology evolved for the HR industry, internal pushback, and other common concerns like adhering to compliance.

Now vs. Then
In the last five to 10 years there have been some significant changes to how HR departments are managed. More and more organizations emphasize efficiency in service delivery, investing in shared services models, and increasing use of technology.

What’s different is the degree to which HR organizations are now responsible for their own technology and roadmaps for future tech rollouts. As HR teams have adopted cloud-based solutions, they’ve taken over responsibilities that previously were the primary domain of IT. This has caused HR to invest and seek candidates with advanced skillsets focused on cloud vendor management, data analysis, and more.

HR organizations are increasingly implementing solutions that make them better marketers to the current workforce, including the ability to listen and respond in real-time to needs of staff using technologies like pulse surveys, intranet, or communities. This empowers them to communicate with the workforce much in the same way digital marketing or customer service departments routinely interact with customers on a day-to-day basis.

Why it’s taken so long
While this seems like the perfect evolution for an HR team, it’s taken awhile to get there and it’s still a struggle for many to apply this new setup. This may leave some asking why, and there are a few answers to that. Let’s take a look at HR payroll solutions in particular.

Core HR systems, like payroll, touch everything within an organization. They are highly integrated with finance systems including everything from headcount budgeting to business analytics. This software is integral to IT solutions for identity management and user directory administration. They also provide key information that legal and compliance teams rely on regularly. And in a global organization, multiply these integrations and points of dependency by the number of countries involved and the complexity goes way up. So it takes a dedicated Chief Human Resources Officer (CHRO) working closely with motivated CIOs and CFOs to arrive at the decision to move such a core function to a new platform, whether in the cloud or not. It’s not an easy rip and replace by any means.

Sometimes, it’s simply that every stakeholder in an organization doesn’t know the concrete, long-term benefits for a cloud-based system for HR. It seems like the right thing to do, but the cost structure of a subscription compared to maintenance on legacy technology can be a hard sell for CFOs who are looking at a wider portfolio of investments with clearer rates of return in hard dollar terms.

Common concerns
Now it’s about providing that value to stakeholders and addressing potential issues and pushback, like with compliance.

Services firms in the ecosystem cannot be successful moving complex platforms like HRMS to the cloud unless they excel at roadmapping strategy, service delivery strategy, and change enablement. For example, companies moving to the cloud for HR may choose to take some functions back in-house rather than outsourcing them. Although the software handles this well out of the box, it takes additional effort to teach the workforce new behaviors and acclimate HR, finance, and payroll staff to updated business processes that will provide the basis for the business case.

Also, cloud solutions provide great support for compliance with HR needs. They are based on designs that usually accommodate the key foundations for compliance, like effective dating and regional legal changes. Additionally, a true cloud-based solution is built on a single code base. So delivering legal changes in a timely manner, a key requirement for an HR solution, is greatly streamlined. Workday, in particular, does a very good job of delivering compliance updates in a timely way that takes some of the worry away from HR teams, such as in their coverage of complex requirements like the ACA and their ongoing focus on potential legislative changes such as multistate taxation. Once a legal change is identified, a multi-tenant vendor can code the solution, document, and release it in a single-threaded effort. For instance, legacy vendors in this area have to first understand the requirement, then translate it into solutions along multiple code lines, supported often by totally different developers and possibly even providing different levels of documentation to their clients along the way. It’s a much larger effort with more room for error to provide compliance support on multiple product lines than for a real cloud solution.

While it’s taken a while for the HR industry as whole to grab onto cloud-based solutions, they’re slowly being implemented because of the many benefits they have for an enterprise as a whole. Study each solution carefully to make sure it will fit best for the company’s needs, but once applied throughout the organization the benefits will continue to grow.

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photo of Mark Berry, on HRExaminer.com where he is an Editorial Advisory Board Contributor.
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