Cloud-based HR Systems: the forefront of HR Transformation | Mercer

HR Transformation

Cloud-based HR Systems: The Forefront of HR Transformation

Innovating and transforming through the latest HR technologies can convert the HR department from a muddled bureaucracy to a business driver. The HR function is able to develop into an acknowledged service provider and advisory partner, and employees and managers become the satisfied consumers of those HR services.

Over half of purchased core HRM systems are now cloud-based solutions. For those organizations that have not made the switch, this paper outlines some key advantages and considerations of a cloud-based HR system.   

The Great Shift to Cloud-Based HR Management Systems

HR transformation means taking advantage of the latest technology across all functions of HR and all parts of the organization. From a technology perspective, in the past this meant licensing proprietary HR software, hosted either on the company’s servers or externally, and perhaps outsourcing some functions to a third party who would look after the software and processing. But today, HR transformation increasingly means leveraging cloud-based technology to support service delivery and customer experience.

A cloud-based HR management (HRM) system is fully supported by an external provider, accessed online by employees and managers, and standardized right across the company — all divisions, all subsidiaries, all countries. Some organizations have moved part of the way and use a hybrid system, with some HR processes done in the cloud, some outsourced, and some still on proprietary software. But these mishmashes are rapidly being replaced by fully cloud-based solutions.

What Are the Benefits of a Cloud-Based HR Management System?

The tide in inevitably turning towards cloud-based HR systems. The many benefits, aside from the convenience of an HR system that is accessible online by employees and managers across divisions, subsidiaries and geographies, include:

Savings in IT support: With cloud solutions, in-house IT hardware and support costs can be reduced substantially as the burden is taken on by the provider.

Lower prices: Subscription fees are generally lower than the proprietary software fees and associated customization and maintenance costs. Total cost of ownership is significantly lower.

More value from HR: With most HR activities supported by self-service, HR professionals are able to re-allocate their focus to strategic work, helping to deliver business goals and concentrate on the strategic imperatives.

Greater productivity: Most importantly, a cloud-based HRM system can produce real productivity benefits as the adoption of innovative tools leads to workforce optimization, competitive advantage, and greater customer satisfaction.

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