HR tech’s future (and present) in the cloud

The IT industry has experienced a transformational shift over the past few years with the rapid growth and adoption of cloud computing and software-as-a-service as the preferred delivery model for new technology expenditures.

It’s expected organizations will spend in excess of US$112 billion on cloud computing and related technologies in the next four years, according to Gartner, a technology research firm.

Cloud computing is defined as an IT delivery model in which computing resources can scale dynamically to provide services on demand to consumers, predominately over the Internet. There are three main segments that define cloud computer services:

• Software-as-a-service (SaaS) is the most mature and widely used component. It can be defined as a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet.

• Platform-as-a-service (PaaS) provides infrastructure on which software developers can build new applications or extend existing applications without having to purchase development or server infrastructure such as databases or middleware.

• Infrastructure-as-a-service (IaaS) provides data centre, infrastructure hardware and software resources over the Internet. IaaS has also introduced other usage and billing models around the concept of “elastic cloud” — using and paying for what you need at any given time with the available resources automatically scaled as required.

The HR industry has, in a number of ways, been an early adopter of cloud computing services. It has outsourced software and IT services for decades starting with the outsourcing of payroll. In the last 10 years, organizations and providers of HR and talent management applications have been at the forefront of the shift towards cloud computing.

Early cloud solutions have included recruitment and applicant tracking, performance management, elearning, human resources management systems (HRMS) and integrated talent management suites.

For early adopters of cloud computing technologies for HR solutions, the benefits have proved substantial:

No hardware, middleware or software: The cloud vendor takes responsibility for providing the necessary software and hardware, installing it, maintaining it and ensuring it is always available and scalable.

Subscription-based billing: Most cloud computing vendors support subscription-based billing that includes the full license to use an application for a defined number of users as well as support. Instead of having to pay a large upfront capital investment for software, customers can subscribe to the software on a monthly or annual basis. This forces vendors to maintain close, positive relationships with customers as employers can choose to part ways at any time.

Multi-tenancy: If the cloud-computing vendor supports multi-tenancy — where all customers are maintained on the same software and release level — this ensures an employer is always on the latest release of the software, with no concerns about costly and lengthy upgrades to take advantage of new features and functionality.

Accelerated time to value: By not having to worry about maintaining software, HR can instead focus on business process design, change management and user adoption — ensuring a successful project from the start. This translates into a quick return on investment (ROI) for cloud-based deployments.

Freed up IT budgets and resources: A lower budget allows HR to work on more strategic or mission-critical projects with software that supports key initiatives, without any concern about IT capacity.

Consumer-driven user experience: The consumerization of IT refers to the growing trend to deliver business-related IT services with a user experience and accessibility that is similar to that of consumer applications, such as Facebook and Linked-
In, or devices such as the iPad. Cloud computing vendors are starting to deliver more consumer-friendly user experiences, which translates to increased user adoption and acceptance.

However, cloud-based solutions do not remove the responsibility and due diligence required in selecting a vendor. Key considerations include the vendor’s technology, architecture, support for multi-tenancy, financials, company history, customer references and a future road map.

The adoption of cloud computing continues to grow at a rapid pace, with HR software vendors focused on releasing software available in the cloud. There are a number of mobile-based applications for HR, from simple employee lookup and contact information to complete payroll processing, time-card entry, collaboration and workforce analytics.

Virtually all investment in software, including HR software, is moving to the cloud. If you follow the money, the future has already been defined — the cloud is the future of HR.