HR and the cloud – seeking the right balance

Even though the trend is toward the cloud, on-premise systems continue to play an important role for many companies. Especially in the case of time recording and payroll accounting – and even though leading providers are working hard to rectify this – numerous HR cloud solutions are missing certain functions and resort to dividing tasks in a hybrid system landscape.

The established on-premise solution that is geared to company-specific features provides a firm foundation for the core processes that can’t (as yet) be mapped in the cloud, while innovations forge ahead in the agile cloud environment. As a result, it’s above all strategically important tasks such as talent management, recruitment and performance management that are migrating to the cloud, together with cutting-edge master data storage and globally standardized organizational management.

Company-wide standardization of systems not only ensures end-to-end transparency, but also creates the basis for real-time data analyses. It has the added advantage of making systems more user friendly and directly involving staff.

Transferring processes to the cloud changes the roles of HR and IT. For example, it’s normally HR departments that initiate cloud projects. They are also increasingly assuming tasks involving the provision of cloud services – including support and the evaluation/adaptation of new features – which means they require IT know-how in addition to conventional HR expertise. 

Corporate IT, on the other hand, is moving away from blueprint-based technical implementation and instead focusing more on the integration of cloud solutions that ensure reliable and cost-effective operation of digitalized HR processes. At the same time, IT is taking on an advisory role when it comes to the further development of the HR product portfolio. Release management is just one example of this.

Data silos that may have formed between HR and IT are thus eliminated and, ideally, multidisciplinary teams are created. The prerequisite here is for the specialist role (HR) to have an equivalent IT counterpart at every level of the HR IT organization. At managerial level, for example, there is one global HR product management representative and one HR IT platform management counterpart. This principle remains the same for every HR functional area, such as talent management and talent acquisition, so that there is always one process manager from HR and one functional manager from HR IT operating and developing the processes and systems in tandem.

How to link the newly established global functional environment in the cloud to individual sites is a particular issue for decentralized companies with sites in different countries. Too much local independence has a negative impact on the newly acquired transparency and process efficiency, while too little makes the solution less likely to be properly accepted.

Combining bottom-up and top-down approaches is advisable to find the right balance. Regional representatives incorporate consolidated technical and regulatory requirements relating, for instance, to the Asia-Pacific region. In parallel to this, global functions provide information about planned initiatives and changes – in the context of regular cloud releases, for example. This dialog takes place in change governance communities. Stakeholders use these forums to regularly meet and discuss issues such as the areas where adjustments are needed, how to further develop specific functional areas, what is going well and where improvements are required.

Including sites and regional stakeholders means they not only have a say in the new global process model, but also become actively involved and act as a driving force. Consequently, they are additionally responsible for helping HR communicate and, above all, implement the transformation.

Companies in the midst of a digital HR transformation should view HR and IT holistically. When it comes to placing these departments on a new footing and, on this basis, defining global requirements and associated processes, the following questions need to be considered jointly: What is feasible? Where does the cloud deliver concrete added value? And where should things be left as they are? However, one thing is certain – HR and IT will work together more closely in the future. When rolling out an HR cloud solution, it’s vital to lay a firm foundation.