Adoption of Software as a Service (SaaS HR software) has become one of the hottest trends in Human Capital Management. In a recent survey and reports published by industry speculators, there is a significant number of organizations that have already implemented or are currently implementing the cloud-based HR solutions.
However, there is still a notable percentage of companies, which are still pending with their decision on the application of the SaaS HR software. Hence, this article is focused on such organizations and business leaders who are underestimating the value that cloud-based platforms can add to HR.
Why is cloud-based HR needed?
Several companies use cloud computing for enhancing their sustainability as well as profitability. In the epoch of technological revolution, computing power of an enterprise is perceived as the critical element for generating the competitive advantage.
There are primarily either of the two reasons for implementing the cloud-based solution in HRM:
– Moving on-premise software online
– Bringing previously offline workflow online
The SaaS (Software as a Service), the HR software model, fosters the opportunity to store and process data of an enterprise and individuals on a remotely located platform. Cloud computing in Human Resource is a pool of extremely scalable, abstract and managed infrastructure. It is proficient in hosting customer application (Pre-hire and Post-Hire tools) as well as billed as per consumption.
Moreover, the focus of investors and entrepreneurs is mostly to move on and as a hotbeds of digital work world SaaS HR software gives you an opportunity to:
– Achieve the incremental innovation within a segment with widespread innovation.
Apart from the benefits mentioned above, cloud-based HR tools do not call for supplementary overhead on infrastructure and maintenance. Succinctly, a smart collaboration of cloud computing model and HR supports in enhancing the intellectual capital, performance and innovativeness of an organization.
Market Dynamics – Cloud Computing Projected Growth
- In 2016, costs on public cloud Infrastructure as a Service software and hardware is forecast to reach $38 billion, increasing to $173 billion in the year 2026.
- By 2018, the Worldwide Public IT Cloud Service Revenue is projected to be $127 billion.
- Technology Business Research (TBR) expected worldwide public cloud revenue would grow more than 200 percent in next four years – from $80 billion in 2015 to 167 billion in 2020.
- According to International Data Corporation (IDC), external cloud adoption will achieve 45 T growth in next 24 months.
HRM and Cloud Computing – Opportunities and Challenges
Some of the benefits of using the SaaS HR software or cloud computing model in HRM include:
– Increased effectiveness.
The cloud system is capable of optimizing and controlling the service provided. A transparent system of controlling, reporting and monitoring of resource usage assist improving the quality of service delivered.
– Pay for Use.
Cloud-based HR tools do not require substantial investment in infrastructure. Also, the subscription is as per user’s need. Hence, using cloud-computing is less expensive than using the in-house software. Such subscription-based cost plan helps in preventing the drawback of long-term contracts, which were earlier used.
– Global Accessibility.
The cloud platforms are located on a network. It implies data stored on this cloud-based HR software can be accessible from diverse platforms and different location.
– Computing Flexibility.
The in-house software restricts the capability of an individual or an organization to store data. Moreover, it is challenging to increase or reduce the storage capacity of in-house software as per user need. On the contrary, SaaS HR software helps in provisioning the storage demand at any time and as per requirement.
– Security, confidentiality and privacy issues are the key obstacles in realising the benefits of services adopted through cloud computing.
– The loss or misuse of the data is the biggest challenge for HR managers while using the cloud-based software.
– There is also a threat that client data stored in cloud platforms being leveraged for commercial objectives.
– Furthermore, the legal issue might surface when an attempt is made to import or export the data outside the particular jurisdiction.
Product Dynamics – Implementing the SaaS HR Software
There is no surprise that some HR leaders struggle with where to begin. It is imperative for organizations to have satisfactory justifications of following questions before migrating o SaaS platform:
- What business objectives and priorities are you targeting to support with SaaS HR software?
- What is the best possible way to implement cloud-based HR tool and use it to meet business needs?
- How can you maximize your investment in SaaS deployment?
- How to speed up the adoption of HR technology among employees?
Organizations which are looking for better ways to improve the alignment between business objectives and HR will find SaaS HR software a natural fit.
The cloud computing and SaaS based models in Human Resource Management are now scalable, shared platform. They help to draw together the formerly soiled zones of an organization.
As compared to the traditional ERP (Enterprise Resource Planning) solutions or outsourcing contracts SaaS HR software is a multitenant, preconfigured structure. Moreover, employees can easily access it while requiring a smaller infrastructure investment.
SaaS’s increased flexibility and shorter implementation timeframe can help accelerate ROI in HR technology. However, the following parameters must be considered beforehand:
– Whether organizations should start with the implementation of an entire HR suite or core HR functionality alone?
– What functionalities should be well-thought-out to support the short-term business goals while empowering HR to achieve its long-term objectives?
– In the case of a global enterprise, how an organization should proceed with the rollout and where the pilot test of the solution should be targeted?
Stay sharp with business priorities – Everything else will follow
HR organization’s ability to improve alignment with and drive impact for the business through the use of SaaS HR software solutions is dependent on the designated implementation strategy.
Today, it is imperative for organizations to choose the right path to SaaS carefully. They need an implementation plan that fits pre-eminently with the company’s HR goals in a reinforcement of business priorities.
The core and well thought out strategy puts basic first. It primarily uses effective strategies to deliver core HR functionalities to educated decisions.
With the rapid expansion of cloud computing with better HR tools and pricing plans – the consolidation is inevitable. Today, enterprises are not only focused on acquiring the best available talent before the competition. Nonetheless, they are using upgraded HR tools to retain the top talent.
Hence, it is necessary for organizations to sharply align their business priorities with emerging HR technology as cloud platform is very concrete and needs to be perfected in practice.
To capitalize on SaaS technology organizations are required to identify potential constraints to deployment, choose the right implementation strategy and evaluate organization’s tolerance to such change.
Statistical data is sourced from forbes.com