HR Focus 2015 #2: Hybrid Leads the Charge
While smaller organizations can move to the cloud swiftly, in reality, enterprises will see cloud on-premise and outsourced services co-exist. Companies that have invested heavily in HR ERP solutions will not move to the cloud for the sake of change, as this is not a financially attractive scenario. On-premise systems are usually licensed with long-term contracts, and leaving them prematurely does not save money – still an important topic. Why fix what isn’t broke?
One of the pitfalls of cloud is the number of vendors with good-looking user interfaces but a lack of actual functionality. We have observed some organizations being “romanced” away only to go back to the market due to the general lack of granular functionality and flexibility. We’ve also seen a number of companies being unable to make the required process changes in order to fit their new cloud solution. Reliable, predictable functionality is still the most important foundation of HR systems, as there is a lot at stake regarding documentation of employee records, legislation, and compliance.
Now that cloud is moving past the hype, there is opportunity for a more realistic and balanced view. Moving to an HR cloud solution offers great benefits in rapidly modernizing your HR technology support and offering a sophisticated user experience to your employees. Cloud brings an additional layer of self-service, being built from the ground up with the end user in mind. It offers better integrated functionality that is enriched with new features on an ongoing basis. For global companies, cloud helps in providing users everywhere with a unified entrance to HR, and by introducing more standardization in HR processes.
As we start to understand cloud, we also understand better what is and what is not suited to bring to the cloud. What would be the benefit of moving payroll to the cloud when you’ve already outsourced that to a provider that hosts your payroll in a multi-tenant environment? It’s not like you want to offer all employees access to start a payroll run. This approach leads us to an increased understanding of hybrid environments, either because a phased approach is more economically sound, less risky, or because some processes simply work better on-premise since they have been so tailored to a company’s needs.
In 2015 we will see cloud migration increase, but with more focus. Companies make better informed choices, as ‘lessons-learned’ become widespread and there is a more realistic understanding of the benefits as well as risk mitigation. There is no shortcut to "all things in cloud" anytime soon. It is about the right mix between on-premise installations controlled by the organization, managed private cloud options via outsourcing vendors, and of course public cloud services. We expect hybrid environments to prevail as customer specific functionality needs to co-exist and not everything can be standardized. Hybrid allows enterprises to standardize in the cloud while staying company-specific with OnPrem in order to capitalize on new technology as well as leveraging prior investments.
The next years are pivotal for your HR systems roadmap. Traditional HR models offered the choice between On-Premise, On-Demand and Business Process Outsourcing (BPO). Hybrid HR combines every available delivery option to provide HR services in real-time and to allow for maximum flexibility – HR services can be delivered to anyone, anywhere, via any device at any time.
For more information download our whitepaper ‘Crossing Boundaries to Create Hybrid HR’, to learn how a company needs to be shaped to be ready for the future HR and business challenges.
For part 1 of this post please visit: HR Focus 2015 #1: What will 2015 bring for HR Technology?