How The Cloud Is Making HR Tech Available For All
HR technology used to be a very exclusive tool. It was only used by giant corporations with bottomless budgets and armies of IT technicians. Yes, HR technology was an expensive investment – both to buy and maintain. But it gave these companies a significant competitive edge. In recent years, we’ve seen a huge rise in cloud computing and web-based applications. In other words, software that is maintained by the provider, hosted on remote servers, and delivered to the end user via their internet browser. This has opened up the HR tech market to small, ambitious organisations. Today, companies of any size (and any budget) can take advantage of tools like workforce data analytics, and HR process automation – at a fraction of the historical cost.
Why traditional HR software forced smaller companies out of the market
HR systems of years gone by were expensive for a reason. They had to be installed on a company’s local servers – meaning straight away, companies needed the infrastructure to handle it. But further to this, they carried hefty up-front licence fees, and required a lot of attention from internal IT teams.
A lot of small companies do not have dedicated server rooms. They do not have the capital to pay for up-front licence fees. And they certainly do not have an in-house IT team with enough time to maintain a complex network of locally installed systems.
How cloud applications are carving a more level playing field
A recent survey by Gartner tells us exactly why cloud applications are becoming so popular. Global buyers cited cost, innovation and agility as their main reason for adoption. But beyond this, a key driver for SaaS adoption is the “hands off” implication for IT.
With SaaS, the product is maintained by the provider, not the buyer. Straight away, this gives smaller companies the chance to compete – because the biggest worry beyond initial cost is the need to hire an IT team. But now, companies with fewer resources can access powerful HR data analysis tools, and HR process automation tools, directly from their internet browser. In fact, SaaS and cloud applications are becoming so popular, that the Gartner survey revealed that traditional deployment of on-premise software is expected to shrink from 34 percent, to 18 percent by the end of this year (2017).
Even big corporations now see the value of web-based HR systems
When I say that the HR tech market is becoming a level playing field for companies of all size, I really mean it. It isn’t that small companies get a half-baked web-based alternative, while big companies still enjoy traditional on-premise solutions. Even some of the world’s biggest brands are recognising the superior value of cloud software, and abandoning their traditional HR systems in exchange for a more modern solution.
Take Centrica, for example. Centrica is a huge British organisation, with international reach. It owns big household brands like British Gas. Recently, Centrica sacked their tradidional SAP HR systems, and replaced them with cloud-based alternative Workday. The switch is thought to have eliminated the need for more than 20 different IT systems they were using to manage their workforce.
Cloud HR tech has traditional solutions running scared
Interestingly, when Workday first started introducing cloud-based HR technology to the market, they were laughed at by the owners of bigger, more traditional solutions. It was an eerie reflection of the way Blockbuster first laughed at the founder of Netflix.
Yet today, it’s a different story. These big, on-premise solution providers, are being forced to take more desperate measures to acquire and retain customers in the face of the rising popularity of cloud applications. Business Insider even published a story about how Oracle was undercutting Workday with discounts so steep that the deals were not profitable.
Why you should consider cloud HR software for your organisation
Here’s the bottom line. Whether you use Workday, People HR, or any other modern cloud-based HR solution for your organisation, chances are you’ll be saving a stack of cash compared to the costs of running an on-premise system. But it isn’t just cash savings. And it isn’t just less pressure on your IT team. Cloud HR technology gives you the flexibility to take your work with you anywhere – you can tap into your network with nothing more than a mobile phone and an internet connection.
Cloud applications are indeed opening up the HR tech market to companies of every size and budget. And traditional, on-premise solutions, are struggling to stay afloat.