10 Things | Cloud HR Technology Myths

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With the emergence of cloud based HR solutions, HR, traditionally not the main buyer or project leaders, now find themselves thrust into a new position of responsibility, one that is exciting and promising, but also dogged by stories offering false hope for HR transformation.

10 Things | Cloud HR Technology Myths will shine a light on some common misconceptions surrounding cloud based HR technology solutions and reveal some home truths about these new SaaS tools.

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10 Things | Cloud HR Technology Myths

  1. 1. Revealing the truth behind the stories 10 Things | Cloud HR Technology Myths Human Capital Services: Thought leadership series © 2013 Presence of IT
  2. 2. 10 Things | Cloud HR Technology Myths With the emergence of cloud based HR solutions, HR, traditionally not the main buyer or project leaders, now find themselves thrust into a new position of responsibility, one that is exciting and promising, but also dogged by stories offering false hope for HR transformation. 10 Things | Cloud HR Technology Myths will shine a light on some common misconceptions surrounding cloud based HR technology solutions and reveal some home truths about these new SaaS tools. A traditional or legendary story, usually concerning some being, hero, event or object with or without a determinable basis of fact or a natural explanation ” “
  3. 3. The difference is fundamental 10 Things | Cloud HR Technology Myths Cloud based HR solutions demand a different mind set. They may collect similar data to traditional HR systems, but they are fundamentally different in how they operate and how users interact with them. HR has a new window of opportunity called collaboration. ” “
  4. 4. Only buy cloud HR software for things you are good at already, or if it forms part of a credible and approved roadmap. 10 Things | Cloud HR Technology Myths Many HR people think that technology will be their saving grace, magically providing them with credibility, organisational respect, new- found competencies and business influence – well that’s just not true.  HR technology is a mirror, if you’re bad at HR, your technology is going to reflect it.  To become a good HR practitioner takes discipline and like any discipline it requires learning, practice, feedback and time. Putting the best and sharpest sword in the hands of an amateur only leads to injury.  While there is a lot of traditional ERP HR software that is less than user friendly, blaming the software is a cover up for poor HR practices. MYTH No. 1 Myth Our Point of view Something to think about
  5. 5. Consider only buying cloud HR software for things you are good at already, or where you are certain the business will derive value 10 Things | Cloud HR Technology Myths Many HR people think that technology will be their saving grace, magically providing them with credibility, organisational respect, new- found competencies and business influence – well that’s just not true.  HR technology is a mirror, if you’re bad at HR, your technology is going to reflect it.  To become a good HR practitioner takes discipline and like any discipline it requires learning, practice, feedback and time. Putting the best and sharpest sword in the hands of an amateur only leads to injury.  While there is a lot of traditional ERP HR software that is less than user friendly, blaming the software is a cover up for poor HR practices. MYTH No. 1
  6. 6. While initial capital outlay is generally lower with cloud HR purchases, monthly operational costs soon add up. Buying into cloud is more manageable, but not necessarily cheaper.  There’s truth to the idiom “you get what you pay for”. Good cloud HR technologies cost money.  Be wary of statements like “using 4 of our HR modules will give you a market capitalisation improvement of 23%”. You are unlikely to get proof of such a causal relationship or any guarantees of such statements.  Existing hardware and IT support costs don’t just disappear - especially if the rest of the business is still on an ERP.  Business value derived from cloud HR technology is directly linked to the level of organisational maturity, yet this is seldom a sales consideration as it is likely to reduce the software licence value. Adjust business case or ROI outputs by an HR maturity index factor to increase the credibility of results. 10 Things | Cloud HR Technology Myths MYTH No. 2
  7. 7. Moving to cloud HR is a fundamental shift to the way HR operates. No cloud HR system can automate your spectrum of HR business processes. It may automate logical system steps, but that’s only half of what you need.  Understand your cloud HR tool intent and design principles – they are different from ERP – then be prepared to completely rethink your HR processes.  Cloud technology does not take away the need to thoroughly consider process innovation in the organisation, especially in the context of the people that support and follow that process.  Performance management is a good example where technology does not eliminate the human behaviours that effectively manage people – nor would you want it to do that.  Social tools embedded in your cloud HR system will require process change beyond the realm of HR e.g. The role of marketing in the recruitment process. If you end up with the same HR process as you had before you implemented a cloud HR solution - start again. 10 Things | Cloud HR Technology Myths MYTH No. 3
  8. 8. Unless you regard HR as mainly an administrative function, HR management doesn't get easier with cloud HR. It may make some things faster through automation, mobile access and end-user services, but system efficiency does not negate human complexity.  Effective HR management delivery still requires HR professionals to apply reasoning, negotiation, innovation, judgement and evidence to successfully achieve measureable organisational goals. A technology layer will not do that for you.  Efficiency can offer increased capacity in HR, and assuming the right capabilities exist, greater focus can be given to improving non-transactional HR management outputs.  Cloud HR technology can provide easy access to raw and consolidated data, but the tool only gives you the problem or opportunity, not the solution – you still need to apply your HR mind. 10 Things | Cloud HR Technology Myths MYTH No. 4 Conduct “current state of HR” and “cloud readiness” assessments to improve and align your HR offerings.
  9. 9. Vendors say their product is built around HR best practices – there’s no such thing. Your organisation is as unique as you are, and your needs will be different.  A cloud HR system “best practice” simply describes how that particular product works – nothing more.  Using the standard product solution approach will make implementation easier and there is a good chance it will be “decent practice”, but not “best”, and it may not match your environment.  Your preferred practices require synergy between your people, process, environment, culture, style and technology, as well as having to align to unique business goals and objectives.  Look beyond the user interface and understand the system’s limitations. Get advice from independent specialists who will help you ask the right questions to assess the cloud HR system’s suitability. If your staff are a competitive advantage, then build your HR requirements from your business’ view, not a generic practice. 10 Things | Cloud HR Technology Myths MYTH No. 5
  10. 10. Mobile and social layers in Cloud HR technology need a clear strategy that is aligned to the organisational maturity level and culture. Engagement tools don’t just get taken up - users need to immediately experience real and personal benefits.  Mobile is certainly a major door opener for better access to HR data and collaboration, but mobile and social tools without explicit and clear intent are likely to fail.  A social work mode assumes your organisation has tech savvy employees. The reality is that many people are not avid social tool users and don’t get the value that social offers.  Organisational collaboration is broader than posting a status update on an enterprise social platform. It’s about becoming a learning organisation that shares knowledge and is free of hierarchical boundaries. Having a supporting culture and leadership style are key success factors. Cloud vendors are embedding social design principles into their HR modules. If you fail in social, you impact your HR system. 10 Things | Cloud HR Technology Myths MYTH No. 6
  11. 11. It’s a common misnomer, but using talent focussed cloud HR tools such as performance management, LMS and career planning does not equate to HR being strategic.  Talent tools give back far more value when your organisation is truly a strategic player, i.e. HR creates, is accountable for, and influences organisational goal achievement through people.  Many HR processes such as performance management are done because “HR says we should”. If this is you, then your cloud HR solution will not return real value to your business and you’ll be wasting money and resources.  The value that HR can provide is correlated to your level of HR Maturity. Performing strategic HR activities whilst at the wrong Maturity level can destroy your HR system and functions credibility. HR maturity is a measure that ensures you offer HR services that match your maturity level. Get assessed. 10 Things | Cloud HR Technology Myths MYTH No. 7
  12. 12. In comparison to ERP solutions, cloud HR systems are easier to navigate and have an appealing user interface, but new complexity comes into play when you expect users to apply reasoning – that’s not intuitive for users whose HR system experience has been mostly transactional in nature.  Employee behaviour issues rank very highly in client case studies, even though new cloud HR systems are touted as “easy” to use.  Don’t expect vendors to offer customised learning and behavioural change services unless you ask for it. It’s not because you don’t need it, but rather so vendors can compete better on price.  The way cloud HR systems are designed require behaviour changes at leadership, manager and employee levels in order to derive the most value. People don’t like change and cloud HR systems are driving far more complex change than you may imagine. Get help! 10 Things | Cloud HR Technology Myths MYTH No. 8
  13. 13. “You can easily swap a cloud HR system if you don’t like it” Of course, you can change your cloud HR system and vendor, just like your ERP system could be changed. However, the reality is that your HR cloud solution is probably part of a broader environment that includes complex technical integrations and embedded people collaboration and processes.  Changing a key part of an engine has ramifications for other components, so don’t bank on switching your cloud HR systems easily.  Vendors know that switching products will be more complex than you think, which is why there is a mad rush to get as many clients onto their solution as possible, using price as the primary motivator.  Once you are on a cloud HR solution, the probability of changing products is less than 20% in the first five years Build your HR system requirements against a future focussed HR roadmap that is aligned to business objectives. 10 Things | Cloud HR Technology Myths MYTH No. 9
  14. 14. A manager’s job will be different not easier. A well-implemented cloud HR solution will increase and encourage manager-employee interaction through new and diverse channels. HR will need to focus on building new manager competencies and knowledge to support a cloud HR solution.  The success of cloud HR systems will rest heavily with managers, not HR, particularly in those areas of people performance and development.  Managers may perceive the new behavioural expectations of them as working against traditional hierarchical management “rights”, and are likely to resist.  Managers will be exposed to more and diverse employee data types. This can be overwhelming unless it forms part of a broader management expectations framework. Just as IT departments need to adjust to a new corporate role because of cloud products, the line manager’s role will need to be reassessed. 10 Things | Cloud HR Technology Myths MYTH No. 10
  15. 15. About us About Presence of IT Presence of IT is a leading consultancy and provider of the world’s foremost Human Capital Management and WFM solutions. We provide thought leadership, strategy, process improvement, software selection advice, implementation, hosting and operational support services in Human Capital Management (HCM) and Workforce Management (WFM) to many of the world’s largest private and public sector organisations. Our strength is in the excellence of our people and our focus is on our clients. This focus has seen us evolve into a global organisation to better support our clients in their respective markets, the world over. Excellence in People The term Excellence in People reflects what we value as a company. Our focus has always been on employing the very best people and developing close partnerships with our clients, to provide the best possible solutions. Put simply, we have excellent people who help our clients achieve excellence in the management of their people. About the author Rob Scott is the Managing Partner for the Human Capital Services division of Presence of IT. The division is product agnostic and focus on strategy, process, change & risk management as well as learning services. Over the last 25 years, Rob has developed expert knowledge and experience in the areas of Human Resources management, Strategy, Transformation and the leveraging of Technology in people environments. He has played leading consulting roles in people system implementations, large-scale project management, business and system requirements, strategic development, strategic workforce planning, talent and learning strategies as well as transformation initiatives. He has successfully integrated his business, psychology, technical, and HR background into a broad value adding service to clients. Rob is a challenging consulting professional and is recognised as a thought leader within Presence of IT. Prior to joining Presence of IT Human Capital Services, Rob was an associate director at a global consultancy where he led the HR Transformation division. Rob is also a founding member and director of the Institute of HR Maturity (IHRM). rob.scott@presenceofit.com.au robscottinsyd
  16. 16. Thought leadership series Views expressed in this document are those of Presence of IT. They are based on our broad experience with local and global clients who use HR, talent and workforce management solutions as well as information in the public domain. The contents of this document are not meant to replace professional advice for your organisation and particular situation. We recommend that you use the information to build your understanding of cloud based HR software, but that you get professional assistance to further evaluate your environment and establish your unique requirements. For further information on our company and services, visit www.presenceofit.com.au +61 1300 665 503 +65 6809 2118 +1 214 890 4048 +1 905 441 6343

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