The demand for fast innovation from an increasingly digital workforce is fueling a significant move to cloud-based human capital management, according to industry experts.
“It’s clearly where the HCM market is going,” says Keith Burr, a principal at Deloitte who spoke at a general session on the future of HCM at Oracle OpenWorld 2015. Burr says that cloud-based HCM offers organizations the ability to take advantage of innovations such as industry-specific clouds, rapid upgrades, and modern, consumerized applications.
Gretchen Alarcon, Oracle’s group vice president of HCM, said three main tenets underpin Oracle’s HCM development strategy:
To get an in-the-trenches take on what makes cloud-based HCM work, Alarcon asked Lois Collins, vice president of human resources at restaurant chain Ruby Tuesday and Larry Freed, chief information officer of Overhead Door, a manufacturer of garage doors, to share their perspective on topics ranging from up-front cultural analysis to successful change management. The group came up with some important questions for any organizations evaluating a move to HCM cloud:
1. What is your cultural appetite for change?
The upgrade cycle for cloud-based HCM is much faster than that of traditional on-premises software, so companies must be able to embrace change in order to take full advantage of the new features. If your company’s culture is more risk averse than full speed ahead, you’ll need to instill more organizational flexibility. Otherwise, you won’t get the most from an HCM cloud investment. “The worst thing you can do is to move to the cloud and not update,” Burr says. “You might as well stay on the platform you have.”
2. How well does IT work with the lines of business?
There’s been a lot of talk about how software as a service will render IT obsolete, but many companies have found that it actually increases the need for alignment between IT and the lines of business. Freed, whose company implemented Oracle HCM Cloud in 2014, says that HR and IT now collaborate closely to get the most from the system’s frequent upgrades. “IT is critical, but HR leads from the business perspective,” he says. One method to strengthen the collaborative process is to establish what Burr calls SaaS Centers of Excellence, where cross-functional teams analyze and test new system features to extract maximum business value.
3. Does your company have strong change management processes?
Moving to the cloud is far simpler than rolling out a big on-premises system, but there are still a lot of moving parts. Collins says that constant communication helped smooth the restaurant company’s move to Oracle HCM cloud, as did involving frontline employees early on.
It’s also important to frame the changes in concrete terms, Freed says. For example, telling field workers that the new system will eliminate manual paychecks presents only the general concept. “You want to give them details—what does it mean to get a pay card rather than a paycheck? How will it be different?”
4. Does your current HCM solution fit how your company works?
“We did a survey that found that applicants weren’t even making it through the application process,” Collins says. Further research found that most restaurant workers lived on their phones, so the company switched to cloud-based HCM that supported mobile applications. “Having the mobility piece was major for us,” Collins says. “It was a huge opportunity to improve our existing processes.”