HR Management Software: The Future is Cloudy
The cloud is the model for the future of HR management software. This is the conclusion of the “HCM Industry Monitor 2016.” More than 75 percent of those surveyed assume that HR software solutions will be “comprehensively migrated to the cloud” by 2020. The disadvantages that many decision-makers saw just two years ago hardly matter today, but classic operating models (e.g. so-called Application Service Providing solutions, ASP) are also a common alternative. However, cloud solutions are increasingly gaining ground.
Advantages and Disadvantages of HR Cloud Solutions: Why the Cloud is on the Rise
A look back shows why the cloud has been able to make such a career in the HR software sector. In 2014, just 16 percent of companies were planning to use HR solutions from the “cloud,” as reported by “Computerwoche” in the February 2014 issue.
The decision-makers already saw the advantages at this point, which still speak for the cloud today:
- Costs are reduced compared to conventional software solutions
- Mobile access is enabled
- Branches and more employees can be integrated more easily
- The HR department can also work together over long distances
- The training of the responsible employees on the different interfaces of the cloud solutions is easier because the software is already optimized “ex works” for use on different devices.
But for many decision-makers, the disadvantages outweighed the advantages. Major security and data protection concerns are at the top of the list, followed by performance problems that the cloud solution brings with it. All these disadvantages are the known and favored amenities of an ASP solution.
About the growing importance of mobile solutions in the HR area
Especially in companies with several branches, the IT infrastructure has changed in recent years. It has become more mobile. This change has also not stopped at the HR departments, especially since their tasks have become increasingly complex. For example, an Austrian HR software study for 2015 shows that talent management is becoming increasingly important. The determination of needs and expectations on site is therefore becoming increasingly important. HR specialists have to travel, and department heads and managers also need access to the software in order to enter feedback or, for example, update the digital personnel file of their employees. Mobile devices with cloud connectivity have proven their worth in this regard. The “cloud” offers direct and easy access for all decision-makers via mobile solutions.
The problems with the alternatives to the HR cloud
The ASP model, in which existing software is provided, operated and also supported in a data center, is still a common alternative today. Such models can offer cost advantages, as the provider, for example, ensures the necessary security and can continuously monitor the systems. A location within Germany is also important for many companies. In addition, it was assumed that one would also benefit from almost all the advantages that the cloud offers via ASP.
In fact, it turned out that the cost advantage was not as great as hoped for with many providers, as a pure ASP solution goes far beyond the simple provision of software. Working with cloud solutions on a daily basis is often described as easier, but the company is more or less responsible for customizing and consulting or optimization. It is therefore necessary to weigh up how much personal responsibility should be invested in the accounting system. Companies that want to tie up enough of their own resources can be well served with a cloud solution.
HR outsourcing seems to be an alternative
Another conceivable alternative to the cloud is the so-called Business Process Outsourcing (BPO) of HR activities to external service providers. Here, not only the system is outsourced, but also administrative processes, such as payroll accounting or travel expense accounting. This can achieve further synergy effects.
According to the “HCM Industry Monitor 2016,” HR software developers expect large sales gains: 42 percent of the corresponding companies expect their growth in 2016 to be more than ten percent, while another 36 percent expect an increase of between five and ten percent.
A powerful software, whether as a cloud or ASP solution, can bring advantages for many HR departments. Each solution in itself has both advantages and disadvantages. The path to the optimal solution is not easy. Knowing the exact requirements or strategic goals of your own company is therefore an important factor in the question: cloud or not cloud.
What experiences have you had with HR management software from the cloud? How do you see the future development in human resources? We look forward to your comment.
Image source: Fotolia.com, photographer: Sergey Nivens
