Why are HR cloud application implementations now business transformation rather than technology transformation projects?
The way organisations and individuals interact, process transactions and deliver HR services is changing. The emergence of cloud HR solutions has moved the HR systems goalposts. The focus is no longer on technology-driven, on premise and customised solutions but on business-driven, standardised and configurable solutions.
When organisations bought software, even 5 years ago, they effectively bought software on a CD which they would install onto their IT infrastructure. As the organisations owned the software, they had access to the source code. This enabled them to completely customise the look, feel and behaviour of the system to match their existing business processes. As many companies were migrating from a paper based or very simple computerised way of transacting, the emphasis was on creating or enhancing their IT Infrastructure.
With a SaaS solution, the organisations don’t buy a CD. They rent (as a service) a system which is hosted on the software provider’s infrastructure (in the cloud) and accessed through the internet. As such, they will not get access to the systems source code and cannot customise the solution as they did with an on premise system.
This change in commercial set up and restriction on customising the solution moves the emphasis away from technical development and towards business adoption and change. As SaaS solutions have been designed to support generic leading practice processes, the challenge now is to fit the organisation’s processes within the parameters of the HR Solution. This results in the implementation effort shifting further towards business engagement, assessing how best to use the HR solution within the context of that individual business and the resulting impacts on process, ways of working and target operating model. The technology element becomes more focused on integration, security and conversion.
Through this fairly seismic shift in approach, organisations now need to look at further opportunities to transform their HR function which are driven by the technology itself. The emergence of mobile and digital solutions along with the inclusion of embedded analytics is a game changer in the delivery of HR services – these features can only be exploited through comprehensive business change and adoption, aligning people and process to the underlying technology.
The control given back to the business is the fundamental reason why SaaS solution implementations are now a key component of HR business change rather than standalone technology implementations. Organisations as a whole have recognised the need for business functions, such as HR, to drive their business landscape and with this understanding and control, are able to react quicker to regulatory change, market and customer demands. Embedded analytics, maintenance & optimisation of the application by the software provider fuels this control of their own destiny further and enables the HR users to be more independent, strategic and less reliant on IT. Furthermore, the emergence of mobile apps allows users to access the latest data wherever they are meaning a smaller need for armies of database analysts providing additional cost and efficiency benefits to the whole organisation.
All of this changes the approach we take to implement modern HR solutions; it is business driven transformation rather than technical transformation.