BY LARRY STEVENS
Cloud-based HR systems, in which software and hardware infrastructure are hosted by the
software provider, will soon be coming to
a company near you—probably yours.
According to Stacey Harris, vice
president of research and analytics at
Sierra-Cedar, based in Alpharetta, Ga.,
2018 could be the “tipping point” for
cloud-based HR systems.
According to the Sierra-Cedar 2017-
2018 HR Systems Survey, by the end
of this year, workforce-management
systems will grow in cloud reliance
from 47 to 54 percent, while 57 percent
of payroll applications will become
cloud-based, compared to 51 percent
currently. An already-high 74 percent
of talent-management systems are
currently cloud-based, and that number
could grow to 79 percent, according to
the report. (The Sierra-Cedar study, now
in its 20th year, is regularly presented
at the HR Technology Conference &
Exposition® held each September.)
Organizations that move
applications to the cloud find
advantages in efficiency, scalability,
customer satisfaction, ease of
upgrades, cost savings and more.
These advantages aren’t without
challenges, and there’s a lot of work to
do to move an on-premise HR system
to a cloud-based one.
glitch, support personnel are forced
to deal with multiple versions of the
application,” says Cristina Goldt, vice
president of HCM Products at Workday.
In addition, she adds, when end users
are working on different versions, they
may have trouble helping each other
with simple support issues, resulting in
more calls to the help desk.
She points out that, with
cloud-based systems, everyone is
upgraded at once. It happens almost
automatically, and there is never a need
to worry about hardware issues.
“You still might have situations
where people are not taking full
advantage of new features in the
upgrade [of a cloud-based application],
but at least you know, from a support
perspective, everyone starts from the
same basic technology,” Goldt says.
for purchasing new servers, computers
and operating systems to support the
on-premise HR-systems upgrade.
While McKee Foods started by
looking at hardware issues, it quickly
found other problems, some related
to upgrades and others integral to on-
premise applications in general. Many
of those issues could be solved using
cloud-based applications, they found.
For one thing, upgrades, which
typically occur once a year for on-
premise systems, are very extensive
projects that often require weeks of
work. Worse, end users may not be
upgraded all at once, which could lead
to support problems resulting from
different end users working on varying
versions of the application.
“You can get into a situation where
whenever there is a technology
Migrating HR data to a cloud provider
can save time and money, but companies
have some big decisions to explore
before making the move.
The most obvious and visible
benefit of moving to the cloud is the
elimination of the need to purchase,
upgrade and support increasingly
powerful hardware to run today’s
feature-rich and processor-hungry
HR systems. While few companies
ultimately move to the cloud solely to
reduce hardware requirements, that
objective may often be the fire under
HR that finally gets it to start the
process of evaluating a transition to the
cloud, which requires significant preplanning and company-wide buy-in.
Understanding the Needs
The need to beef up hardware and
bandwidth led McKee Foods to study
cloud options for HR. The end result
of the company’s comprehensive
examination was the replacement of its
on-premise solution with Workday, a
Pleasanton, Calif.-based company that
specializes in cloud-based systems.
“We were looking at the need to
increase our bandwidth to support a
new version of our on-premise legacy
systems,” says Mark Newsome, vice
president of HR at the privately held
McKee Foods, a Collegedale, Tenn.-based bakery-products company that
reports about $1.4 billion in annual sales.
In addition to bandwidth issues, the
company was looking at the potential