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Three Steps To Make Cloud HR Transformation a Success

Cloud computing has revolutionized the way companies and employees work; for HR teams to make a success of it, they need to work more closely with IT and follow three steps

Most people have become accustomed to the idea of storing personal information on the cloud, as the continuing popularity of things like Facebook, iCloud and OneDrive all show. And as the amount of information we all create and store continues to expand, the cloud is expanding along with it.

But the cloud is also revolutionizing the way employees work and businesses are run. The capability for traditional IT infrastructure to become far more flexible and affordable has had a significant impact on how employees use data and technology over the past decade. This is just as true for HR software as for systems used anywhere else in a big company.

The reason for this is twofold. First, managers want HR– especially HR business partners – to provide more advice on how the workforce can help hit big business goals and, second, cloud technology gives HR managers better tools with which to respond. In short, using more data can help HR teams implement more successful talent strategies and support revenue growth.

Where HR Cloud Technology isn’t Working

While investments in cloud computing are rising, the pressure to get the implementation right is mounting too. However companies that invest in HR information systems (HRIS) expect an average return of 15% on what they spend, but are regularly confronted with a loss of up to 26% at the end of the project cycle, according to CEB research.

One reason for this is that the HR and IT functions don’t collaborate as well as they should, and are still seen as separate departments. It is often the IT team that introduces cloud-based HR software which tends to result in a greater focus on the more technical aspects of the implementation.

As a consequence, the needs of HR teams or those in the business are not adequately reflected in how the new system is configured, the hoped-for improvements to HR processes are not realized, and there is not enough emphasis on making the experience for end users a positive one.

This last point critical, given one of the main reasons investments in HRIS technology are not producing the returns they should is because people are simply not using the systems as they are intended to be used. In fact, insufficient adoption by users accounts for 80% of business value that goes unrealized in an average HRIS implementation.

Engaging employees in using a new system is crucial because, unlike traditional on-premise software, cloud-based HR systems address significantly higher number of users with a larger scale of requirements. Companies must create a compelling, user-friendly experience, so that employees are more likely to adopt the new software.

Three Steps

Successful HRIS implementation starts with treating IT and HR as equal partners. This makes it possible to address three important points that are typically not the focus of IT, but make a crucial contribution to improving the user experience, increasing the user adoption and so increasing the chances of success.

  1. Optimize and simplify HR processes: Complex, intricate and paperwork-heavy HR processes are not automatically being simplified, becoming more user-friendly, or efficient just by implementing a cloud-based solution. For instance, an organization we recently worked with had to keep duplicating HR administration work, even after installing an HRIS solution, due to a mismatch between the way the HR system was implemented, and the organizational requirements for certain HR processes.

    This caused routine processes such as the approval of a change in working hours for an employee to be recorded in paper form first and, after getting the green light offline, it was then transferred into the system.

    To avoid such situations, HR and IT teams have to collaborate so that the new solution configuration reflects the company’s HR processes as closely as possible, within the standardized possibilities offered by such cloud systems.

  2. Determine functional requirements: While companies may be eager to use talent analytics features of the new systems, they must first determine exactly what they want from the new HRIS solution.

    If the new system offers far more functions than required, it increases the complexity of the system and the cost of implementation. On the other hand, if it does not provide critical functions, then employees will question the point of implementing a new system.

  3. Offer a greater role to HR from the outset: Transitioning to a cloud environment brings a lot of changes for all employees in a short period of time. HR should be brought on board as early as possible so that effective and timely change management processes are put in place to ensure acceptance of the new technology, and turn it into a true “system of engagement”, instead of a “system of record”.

 

More On…

  • HR Strategy Roadmap

    Learn how CEB's HR strategy roadmaps can help you implement critical changes and initiatives.

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