That’s the conclusion you might arrive at if you’ve followed HR Technology publications in the last year or so. Ever since Workday came onto the market, SAP bought SuccessFactors, Oracle acquired Taleo and SalesForce introduced Work.com, there’s been a lot of emphasis on the fact that HR in the 21st century must be build on cloud – and HR ERP is dead.
It seems that only HR is hit by this “strictly cloud” virus. I haven’t observed it (yet) in other business areas, where ERP still has a lot of klout. So what’s going on, and why is it happening to HR?
I’m a bit old school – where I come from, when we need new functionality, we create an overview of functional requirements first, technology requirements second. And we look closely at what we already have and how to create a solution that adds value. We don’t start with: it must be cloud.
Besides, many companies, subject to complex labour agreements and local regulations, have invested heavily in systems that are tailored to their needs. They are not ready to rip and replace that investment. In parts of the world, like Europe, there are many HR factors that influence payroll on a monthly base which means your HR solution must support all of that. And of course, all those rules and regulations change frequently, so your vendor better have a good support and maintenance system in place that aids in being compliant.
So I am proposing a more balanced view: yes, HR in the cloud can be great, and yes, HR ERP has its benefits too. It all depends on what you need, and on what you already have (invested in). In fact, a hybrid might bring you the best value for money by protecting previous investments while adding new HR services.
After all, this is HR we are talking about – absolutely necessary but certainly not an area where your employees should spend most of their time in awe of the system. Let’s be reasonable: an HR solution must work, it must be reliable and flawless and that’s about it.
Cloud or ERP for HR: The Fundamentals
The first post in this summer series on the state of HR Cloud and HR ERP looks at the basics.
When I talk to clients about choosing between Cloud and ERP for HR, there are many questions that need to be answered, but the fundamental choice follows from the answers to these three questions:
1. How standard do you want to be/can you be?
2. Can you do without legacy processes & data?
3. Single or multi-vendor policy?
The most important difference in moving from ERP to Cloud is that you must decide how you feel about giving up the control that you currently have on your processes and systems. In return, you will benefit from the standardization that a cloud vendor can provide. Look at this picture:
As you can see, I’ve included 2 more solutions for sake of completeness: Cloud ERP and BPAAS. These are not strictly technical solutions as they include processes and services, but when you start evaluating your move to the cloud, it’s always good to know that there are options.
Of course Standardizaton and Control are not the only topics that must be discussed when you choose your new HR System. I’ve created a list of other topics and they will be the subject of my next post.
Anita Lettink, 2013
Anita will be delivering an exclusive keynote presentation – “The State of HR Technology Today”, explaining current and upcoming tools and trends for HR and business, at the HR Change & Transformation 2013 international summit in London on 25 September.