By Kai Petzelt, vice president of product marketing for Oracle HCM
Technology that supports compensation, payroll, benefits, performance, and time management in one platform, while also adhering to the latest compliance and regulatory requirements, can't be limited to the boundaries of the on-premises world.
To benefit from all the capabilities with the lowest maintenance and effort to control and update the systems, a small-to-medium business (SMB) should take its human capital management (HCM)practices to the cloud. According to Deloitte, "using the cloud, organizations can see structural benefits that lie beyond technology advantages and makes it possible to connect various HR initiatives and technology across the enterprise, so that design, portals, and the nature of service delivery itself is consistent and appropriate."
Need further convincing? Here are ten benefits for focusing HCM in the cloud:
1. Security for HR and Financial Data
Reliable technology enables IT departments to focus on business impacts and support the lines of business. By choosing the right vendor in the cloud, an SMB can ensure sensitive HR and financial data always stays secure and safe.
2. A Unified Application Environment
Integration shouldn't be a boundary for HCM. Having payroll, compensation, and performance as parts of one unified system ensures HR data format is consistent with compensation and payroll formats, so system administrators aren't dealing with every single entity and managing information in small portions.
3. A Scalable Solution
An SMB can use the database and data warehouses that are precisely the correct size for their current needs and expand them in future as the business requirements change, such as in an expansion of their geographical presence, an increase in hiring, or when acquiring new companies.
4. Centralized Data Sources with One Source of Truth
Cloud technologies empower a high-growth business to both load and store all data from disparate sources in one single place, data warehouse, or data lake. Because of this, organizations can track the changes, provide access to richer data for analytics across the board, and extract more impactful insights. Having a single source of truth helps all managers generate trustworthy and credible reports in real-time with the best available information.
5. A Focus on Performance
A unified compensation and performance management solution helps to focus on performance improvement, recognize the high performers and reward them based on their achievements on the spot. In this way, companies can reduce attrition and increase employee satisfaction as well as access to better business performance across the board. This can't be achieved with fragmented technologies and multiple pieces of applications that don't talk to each other.
Moreover, AI and machine learning can take this factor to the next level by predicting high-performing employees, salary trends, potential risk of attrition and flight risk to help businesses to stay on top of the competition by focusing on their most valuable resource, talents.
6. Transformation of Business Practices
Moving to the cloud can potentially transform business processes if it's seen as a holistic move that covers all aspects of the business and focuses on the way of working more efficiently.
7. Regulatory Compliance
Monitoring processes to ensure compliance requires intelligent solutions able to detect any anomaly and also enable all workers to perform in the right direction, aligned with business objectives. The goals should be defined concerning all regulations, and proper risk management practices should also be acknowledged and rewarded.
8. Consistent Experience
Users need to be able to learn how to use a system intuitively, and once they learn a process, they should be able to apply the same knowledge across all applications and tools. This is where consistency plays a vital role. To keep systems usable — with simplified interfaces and streamlines processes—an SMB needs to continuously improve the experience while also upgrading the solutions with the latest and greatest trends and technologies.
9. Simplified Maintenance
Tying compensation with performance requires solutions that track, analyze, and manage team compensation, salary, and benefits in the most effective way without adding a huge load of work to the busy schedule of business managers or human resources professionals—the cloud can do that.
In addition, HR staff reduce their dependency on IT departments. Lower dependency frees time for IT to focus on critical problems and helps HR to deliver their services without interruption.
10. Overall Cost of Ownership
Any investment should have a positive return on investment. Based on research by PwC, 44% of organizations believe the lower cost of ownership as the top motivation to utilize the cloud for HR needs. Reducing the total cost of ownership by removing both hardware costs and labor costs in an on-premises situation can be a significant step to achieve a higher ROI.
Businesses thrive if—and only if—they get the most out of their HR data and leverage that to attract, recruit and develop talents. Maybe even more important than all, cloud-based human capital management helps a small-to-medium business retain and motivate their talents to be high performers.
Find out how Oracle HCM Cloud can help your business grow and thrive.
Kai Petzelt is vice president of product marketing for Oracle HCM.