The Silver Lining for CIOs in HR’s Cloud Challenges

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Guest post by Dan Staley

HR executives are flocking to the cloud as a means to better engage talent and empower employees. In many organizations, HR executives are flying solo on their cloud transitions without the support of IT—as cloud vendors sidestep the IT departments and sell directly to Chief Human Resource Officers (CHROs). Unfortunately, HR executives are finding the migration isn’t as easy and breezy as they expected, according to a recent report by PwC. More than half of our respondents to a PwC survey of 268 U.S.-based companies cited high satisfaction with their cloud offerings for core HR, payroll and recruiting. However, many are experiencing unexpected challenges along the way.

For example, 51% of the 107 companies who responded with at least one product in the cloud said they were “not fully prepared for the process transformation required”. Further, 23% of respondents said their implementation took longer and/or cost more than they anticipated. Reasons varied, but common hurdles included organizational readiness, a lack of skills and product issues:

  • 45% of the 107 companies who responded with at least one product in the cloud cited a “readiness to give up customizations and embrace a SaaS mindset” as an implementation challenge.
  • Respondents indicated 70 times that “product defects/bugs slowed our progress.” (Keep in mind that many of the process areas and modules are still fairly new in the market).
  • Respondents indicated 71 times that “a lack of internal resources to assist with the project” was an implementation challenge.

You don’t have to look far for examples of unexpected challenges. One of our clients, for instance, purchased cloud software to automate one of their paper-based processes. Simple, right? Wrong. The client believed that their existing process, even though it was manual, was world class. They were not pleased to learn that their new cloud software could not accommodate many components in exactly the same way. They considered the project a failure.

In another example, a software sales rep was told by his customer’s IT department that they were committed to the rep’s on-premise HCM software for the long term – especially given how customized it was to their unique needs. This same sales rep received a phone call three weeks later from the customer’s HR department letting him know that they were moving to a competitor’s HCM cloud product.

The silver lining in this grey cloud is that larger organizations are moving their core HR processes to the cloud at a slower pace. 57% of respondents with more than 5,000 employees enable their performance management processes by cloud software, and 61% of larger organizations use cloud software for recruiting. However, more than 70% of our survey respondents with core HR and payroll in the cloud have less than 5,000 employees.

CIOs still have time to partner with HR to prepare for the process transformation required to transition core HR to the cloud. CIOs can team with CHROs to usher in behavioral change in the following areas:

  • Develop a thorough strategy with input from the entire C-suite and other business and technology leaders at the outset of the transformation.
  • Help adapt standard business practices and the cultural mindset to be ready for delivered processes.
  • Fully consider the organizational impact of moving HR to the cloud, as many—if not all—HR business processes may need to change.
  • Do advance homework to evaluate critical business requirements to ensure that the product can deliver the required functionality.

CIOs have been cut out of the cloud equation, but it’s not too late for them to get back into the game and help HR executives shape their cloud strategies, determine how it integrates with the rest of the IT portfolio and make sure efforts are effectively resourced and scoped. The time is now for CIOs to engage CHROs in a conversation to navigate a clear path forward.

Image shared by Ferdi De Gier

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