HR Increasingly Adopting Cloud Technology

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By Genevieve Douglas

July 27 — The increased availability of cloud technology to perform HR processes has greatly benefited the bottom line for HR departments, both for costs and efficiency, according to new research released by Mercer.

HR departments are now looking at cloud-based economic models of human resources information systems (HRIS), which have vast implications for how HR can budget for technology costs, streamline HR processes and allow employees to work anytime and anywhere, Katherine Jones, a leader in Mercer's North American Talent Business, said July 27.

Mercer found that out of the 500 participants in its recent study, 45 percent had implemented a new HRIS within the past five years; of those, the majority had deployed that system in the cloud, using the increasingly popular Software-as-a-Service (SaaS) delivery model. Additionally, 34 percent of study participants planned to implement a new HRIS within the next three years. These systems were reported to provide higher quality data, better user experiences and increased analytic capabilities, Mercer found.

Mercer was particularly surprised to learn that 55 percent of study respondents stated they were redesigning their end-to-end HR processes concurrently with HRIS implementation, Jones said. Doing the two things at once shows how the cloud allows for more fluid design, she said, comparing the process to “changing the engine of an airplane while in flight.”

HR should begin this journey to new technology by first examining what processes the department uses and whether there are redundancies or a lack of efficiency, Jones said. Next, HR should decide which technology functions are required to support employee programs and procedures, and how the implementation of technology may impact workers.

Implementation Challenges

While cloud technology may improve the process of adoption, participants in the survey did cite challenges. The top five implementation obstacles include:

  •  difficulty defining the future state of the HR organization to support new roles and responsibilities stemming from implementation (cited by 49 percent of respondents);
  •  added time and expense for customization (44 percent);
  •  challenges developing and running reports and analytics (37 percent);
  •  lack of knowledge/experience with human capital management technology on the internal HR team (29 percent); and
  •  internal resource constraints (28 percent).

Overall, change management will likely be the key factor in the success of any implementation of new technology, Jones said. HR cannot overlook the value of change management teams during these processes, to understand how best to communicate with employees on how to use the new technology, she said.

The study is based on 488 responses surveyed between October 2015 and February 2016. Jones spoke during a webinar sponsored by Mercer.

To contact the reporter on this story: Genevieve Douglas in Washington, D.C. at gdouglas@bna.com

To contact the editor responsible for this story: Tony Harris at tharris@bna.com

For More Information

The study is available for download at http://www.mercer.com/our-thinking/journey-to-digital-hr.html.

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