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The Cloud's Business Impact on Human Resources
- 1. The Cloud’s Business Impact on HR
- 2. 2 • Define the Cloud • Explore Cloud Models • How the Cloud Works • Why the Cloud Matters to HR • Benefits of the Cloud • Evaluating Cloud Vendors • Overview • Q&A Session – 15 mins Agenda
- 3. What is the Cloud? Webster’s Definition – A distribution of network based environments that share services delivered from external systems which can be stored, accessed, and managed from various devices. My Definition – “The Internet” 3
- 4. Cloud Service Models Infrastructure-as-a-Service (IaaS) Platform-as-a-Service (PaaS) Software-as-a-Service (SaaS) Reference: http://blog.appcore.com/blog/bid/168247/3-Types-of-Cloud-Service-Models 4
- 5. 5 What can the Cloud do for you? • 360 Degree Feedback • Attendance Management • Benefits Management • Compensation Management • Competency Management • Development Tracking • Discipline History • Email Notifications • Employee Database • Employee Self Service • Payroll Management • Performance Appraisal • Personnel Management • Recruiting Management • Vacation / Leave Tracking
- 6. 5 How does the Cloud work? Image credit: Strickland, How Cloud Computing Works
- 7. 5 Why Does the Cloud Matter to You? • Value • Financial • Risk mitigation
- 8. 5 Value • Automation • Brand support • Ability to measure
- 9. 5 Financial • Delivers value to the top line • Saves money which lands on the bottom line • Cheaper in volatile times
- 10. 5 Risk Mitigation • Will not break • It will not become out of date • Organizations need a foot in the future
- 11. Key Questions Value? Launch Time? Return On Investment? Service? Reference: http://www.deloitte.com/assets/Dcom-Australia/Local %20Assets/Documents/Services/Consulting/Human %20Capital/Deloitte_HR_in_the_Cloud_Deloitte_16Apr2012.pdf 9
- 12. The Right Timing ERP upgrade with legacy HR platforms SaaS Technology Already in Use Company Growth Paper/Manual Processes Reference: http://www.deloitte.com/assets/Dcom-Australia/Local %20Assets/Documents/Services/Consulting/Human %20Capital/Deloitte_HR_in_the_Cloud_Deloitte_16Apr2012.pdf 10
- 13. Key Questions Security Service Levels Integration Reference: http://www.deloitte.com/assets/Dcom-Australia/Local %20Assets/Documents/Services/Consulting/Human %20Capital/Deloitte_HR_in_the_Cloud_Deloitte_16Apr2012.pdf 11
- 14. Security • Ask for security benchmarks that the cloud service provider has met. • Ask about how data centers are secured and how vendors segregate data in multi-tenant systems. • Explain the importance of educating employees and using various network monitoring and Web filtering technologies. • Verify the data's location in order to meet regulatory requirements. Reference: http://www.networkworld.com/news/2010/092710-software-as-service-security. html?page=4 15
- 15. Security • Class A data center • Proper certifications • Redundancy • Offsite backup • Owns and operates infrastructure Reference: http://www.networkworld.com/news/2010/092710-software-as-service-security. html?page=4 15
- 16. Service Levels • Non-disclosure and confidentiality agreements? • Screening policies and procedures satisfactory? • Reviewed periodically for appropriate access? • Outsourcing job functions? Reference: http://www.weber.edu/ITDivision/policy_pages/saassecurityguidelines.html 11
- 17. Service Levels • Multiple support avenues • Support during normal business hours • Professional support team • Info to help address common issues • Ability to submit unlimited support requests Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 11
- 18. Integration • Process • Price • Short and long term goals • Partners Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 14
- 19. Integration • Multiple integration points • Flexible formats • Open as possible Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 14
- 20. Data Ownership • What is the vendor’s policy? • Can the data be moved? Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 15
- 21. Data Ownership • Data never shared • Only accessed by authorized staff • Full access • Downloadable Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 15
- 22. Performance • Uptime statistics • Disaster protection • Meet service level expectations Reference: http://www.weber.edu/ITDivision/policy_pages/saassecurityguidelines.html 11
- 23. Performance • Uptime of 99.5% • Back up servers • Performance monitoring • Service credits if SLAs are unmet Reference: http://www.weber.edu/ITDivision/policy_pages/saassecurityguidelines.html 11
- 24. Enhancements • New features? • When/how often? • What is the role of customer feedback? • Associated fees? Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 14
- 25. Enhancements • Frequent upgrades • No disruption • Little effort • Incorporation of feedback Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 14
- 26. Usability • Can you and your staff use it easily? Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 15
- 27. Usability • Data never shared • Only accessed by authorized staff • Full access • Downloadable Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 15
- 28. Contract • Meets needs and requirements? • Flexibility? • Terms? Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 11
- 29. Contract • Flexible • Available discounts Reference: http://www.samanage.com/sites/samanage.com/content/Smart-Questions-for-your-SaaS-vendor.pdf 11
- 30. 1. Drop in Jobless Rates. 2. Hike in College Grad Hires. 3. Focus on Millenials. 4. Better Data Utilization 5. Recruiting like a Marketer. 6. Paperless Processes. 7. Maximizing People Potential. 18 Overview Trends
- 31. • Define the Cloud • Explore Cloud Models • How the Cloud Works • Why the Cloud Matters to HR • Benefits of the Cloud • Evaluating Cloud Vendors • Overview • Q&A Session – 15 mins 18 Overview
- 32. Questions? KYLE TUDOR HR TECHNOLOGY CONSULTANT AND PUBLIC SPEAKER ktudor@hrcloud.com www.hrcloud.com
Editor's Notes
- Thank you for the kind introduction. Today I'll be speaking with you about the Cloud and its business impact on HR.
- In this presentation, we’ll be talking about the Cloud’s business impact on human resources. We’ll be going over what the Cloud is, why it matters to you as HR professionals, and what the Cloud has to do with your job.
- So what is the Cloud? Here is the super nerdy techy definition “the cloud is a distribution of network based environments that share services delivered from external systems which can be stored, accessed, and managed from various devices. All that is just a bunch of words to say “the Internet.”
- Within the Cloud, there a few different models. There’s infrastructure-as-a-service, platform as a service, and software as a service or SaaS. Infrastructure-as-a-Service is the initial layer and base of cloud computing. IaaS users are usually those who need additional processing power and data space from time to time. Under this model resources are only paid for when they are used. Some of the names you'll recognize in this model include Amazon, Microsoft, and Redhat. Then there’s the Platform-as-a-Service model. This is often considered a secondary layer. In this model, users are in control of their applications and data but the cloud vendor handles all other components. Businesses benefit because staff is not needed to maintain such systems. Another perk of the Platform-as-a-Service model is that it’s upgradable. An example of the Platform-as-a-Service model that I'm sure you are all familiar with is the Google app engine. Most relevant to our discussion today is the software as a service model. Saas is the last level of the cloud services model and the model that we'll be most focused on for the purpose of this discussion. Software as a service is basically renting online software instead of buying it. In this model the processing and files takes place on the Internet, with users accessing their tools and documents using a web browser. SaaS gives businesses the advantage of running programs in the cloud where everything is managed by the cloud vendor. Also, with SaaS, users have no compatibility issues since the same software is used throughout the company. Examples that you use every day include Gmail, Salesforce and SaaS Human Resource Management Systems or HRMS systems. So within the Cloud, there are 3 models. SaaS, or software as a service, is what we’ll be talking about today.
- What kind of Cloud based SaaS systems exist in the world of human resources? Within the cloud, human resources professionals can perform a vast majority of their day-to-day functions, through Human Resource Management Systems. These systems are available for virtually every area of human resources. In the Cloud HR professionals can manage: 360 Degree Feedback Attendance Management Benefits Management Compensation Management Competency Management Development Tracking Discipline History Email Notifications Employee Database Employee Self Service Payroll Management Performance Appraisal Personnel Management Recruiting Management Vacation / Leave Tracking There are countless systems provided by a variety of Cloud based vendors that specialize in HR related systems.
- That seems like a lot of stuff. How can a Cloud possibly do all that? In order to understand the Cloud it helps to break It down into 2 parts—a front end and a back end. These two parts connect, typically, through the Internet. On the front end is a computer user and on the back is the the cloud part of the system. On the front end, the user has his or her computer and the application needed to gain access to the cloud computing system. On the back end are the various computers, servers and data storage systems that make up the cloud. A cloud computing system can include any program you can imagine, including programs to aid you in the functions we mentioned in the previous slide.
- The bottom line is that the cloud is here and that is a good thing for HR professionals. The difficulty is that it forces HR to wade into a new technology—and that takes time. The move to the cloud is part of a broader trend to bring technology to most HR processes. What matters most is good processes. Technology enables such processes and the cloud is a substantial advance in technology. The cloud matters to you as an HR professional because of value-added reasons, financial reasons, and risk mitigation reasons.
- While cost and risk are important, the best thing about HR processes in the cloud is that it will make HR work better. In terms of value for HR professionals, moving HR processes to the cloud might be the only way a process will be automated. In the real world of limited time and constrained budgets the choice might be between a cloud-based solution and no solution at all. Cloud-based solutions can be implemented quickly with little IT support. Beyond that, cloud based HR systems can help support the employment brand. Cloud-based solutions offer the look, functionality and mobile-accessibility that employees and their managers have come to expect. People are impressed when an organization has the latest tools and disappointed if tools feel out-of-date. Cloud based HR systems also provide an improved ability to measure. In the past organizations would launch a process and hope it improved outcomes, now there are constant demands to measure those outcomes. Any move from a manual to an automated system should improve reporting and in this realm cloud-based software usually has good measurement, analytics and reporting baked-in. Another reason the cloud matters to HR professionals is that it offers universal access. We are in an era where employees expect to be able to access tools from home and mobile devices; cloud solutions typically have this capability. This is illustrated, for example, in cloud-based onboarding solutions where new employees can begin the onboarding process before they ever set foot in the office.
- There are also financial reasons why HR professionals should care about the Cloud. Cloud based systems delivers value to the top line. For example, if the process is performance management, the value may be freeing up managers’ time so they have a better chance of hitting their targets. If the process is onboarding then it may be reducing turnover that is affecting customer satisfaction. Where a cloud-based HR process can support outcomes the business cares about, such as manager’s targets and customer satisfaction, then that reason is important. Cloud based systems can also save money which lands on the bottom line. Cloud-based computing has some inherent efficiencies over in-house computing and those often translate to less expensive solutions. The main efficiency comes from that fact that many different companies are in effect sharing the software vendor’s infrastructure and those savings are passed back to the customer. Cloud solutions can be cheaper, especially for small and mid-sized companies. Lastly, Cloud based systems are cheaper in volatile times. While we often focus on the total cost for serving the current employee population, what often has the biggest impact on costs is volatility. For example, at one time people promoted the value of recruitment process outsourcing on the basis of lower cost per hire. However organizations eventually learned that the big cost savings came in times of volatility: in busy times they would have too few recruiters, in slow times far too many. Outsourcing solved that problem. Similarly, cloud-based solutions are often “pay by use” so a company can scale up and down as needed. Particularly for areas like onboarding and recruitment this can be the telling factor.
- Let’s talk about risk mitigation reasons. A cloud-based solution can reduce risk because it won’t break. It is common to hear the term “scalability” when people mention cloud solutions, it means the same solution will work even if the number of employees being served increases dramatically. However, rather than lean on the technical term, think of the benefit of cloud-computing being that it will not break if demands increases. It is embarrassing and expensive to implement a solution and find that by the time it is in place the company has outgrown it. Cloud solutions mitigate that risk. Cloud based solutions won’t become out of date. After the excitement of implementing new software comes the tedious effort to keep it up-to-date. In fact, the vast majority of IT resources are devoted to simply maintaining existing systems. The risk for any in-house system is that IT will not have the resources to apply updates, and the system will fall behind. Cloud-based solutions are updated centrally and do not require in-house IT resources. This is especially important for any solutions that need to be kept up-to-date on regulations. Lastly, organizations need a foot in the future. Organizations take a risk if they lag too far behind in new technologies. Given how fast the world is moving to cloud-based technologies, it makes sense to ‘put a foot in the future’ and get HR process up to the cloud.
- How do you know if a Cloud based HRMS is right for your organization? Let's go over some key areas and questions you should ask. First, you'll want to know about the value of the system. Value. Will the system make your department more or less dependent on IT? Can the system be configured by the HR team or will it have to be customized by the manufacturer? How will it impact service levels? And to what degree? Launch Time. Can the system be used right away? If not, how long does it take to get up and running? How fast after implementation can users begin using the system? Is training required? How extensive is the training? Is the system updated automatically? If not, how time-consuming are updates? Return on Investment. How much does it cost to implement the system? Can initial costs be recouped through decreased operational costs? What impact does the purchase have on cash flow? Service. Is the system easy to learn? Is it intuitive? Is there a lot of training required? What kind of training does the vendor offer?
- You'll also want to consider timing. If you’re involved in any of these activities, a SaaS solution could be an effective strategy to consider: Upgrade from legacy HR platforms If you’re using old, outdated technology, SaaS would be a strong solution as a replacement for your HR platform. SaaS Technology Already in Use If your IT dept understands the benefits of the SaaS model, it makes adopting SaaS for HR an easy next step. Company Growth Companies that are growing through M&A or internationally will experience benefits from implementing a SaaS solution. Paper Process If you have a filing cabinet, or still spend hours thumbing through resumes and searching through excel and word documents you may benefit from a SaaS solution.
- SaaS technology is now well developed and trusted; however some people within an organization may still have concerns about the following: • Security: While SaaS has demonstrated security and can be trusted to protect data, some companies have difficulty trusting anything outside their in-house data centers. • Service levels: Some vendors lack formal service agreements. • Integration: Incorporating SaaS with other applications is an issue for some companies. For example, payroll, benefits carriers, CRM tools, Salesforce, etc.
- Let’s talk about security. Some statements you may encounter from your IT dept in terms of security may include comments such as • Cloud standards aren’t strong enough • They’ll say things like “service providers are too secretive” and • Access everywhere increases convenience, but also risk • You might also hear, “You don't always know where your data is” In order to prepare to respond to security-related questions, do the following • Ask for security benchmarks that the cloud service provider has met. • Ask for details about how data centers are secured. • Explain the importance of educating employees and using various network monitoring and Web filtering technologies. • Verify the data's location in order to meet regulatory requirements. • Ask what protection mechanisms and techniques are utilized in the vendor’s data center. http://www.networkworld.com/news/2010/092710-software-as-service-security.html?page=4
- It’s always a good idea to thoroughly examine security when evaluating a Cloud vendor. When you bring up the points in the previous slide with a SaaS vendor, you’ll want to make sure they verify that they have proper security certifications in place such as SaS70. You’ll also be looking for a vendor with a Class A data center. Make sure they don’t co-locate, meaning that they own and operate their own infrastructure. Also, be sure they have redundancy and that they have offsite back up in place. These elements will help you ensure that the SaaS vendor is secure. Overall, the main thing to find out is what protection mechanisms are utilized in their data center. http://www.networkworld.com/news/2010/092710-software-as-service-security.html?page=4
- In exploring Cloud based software you will likely come across questions about service level agreements or (SLAs). In order to best prepare to address concerns about SLAs, when evaluating SaaS offerings make sure the following areas are addressed in the SLA. You'll want to make sure the SLA explores functionality, reliability, integration, change management, data access, data security, physical security and business continuity and disaster recovery. Key questions HR professionals should consider include: • Are all employees of the SaaS offering’s company required to sign non-disclosure and confidentiality agreements? • Are the employee screening policies and procedures satisfactory? (Do they conduct background or credit checks?) • Are employee accounts reviewed periodically for appropriate access? • If the SaaS offering’s company outsources any job functions, what are the non-disclosure and confidentiality agreements, and employee screening requirements of the out-sourced agencies? • Does the vendor outsource any job functions outside of the USA? Do the countries where job functions are outsourced provide sufficient legal protections to ensure the confidentiality of our information? • What are the available support channels and hours of support operations?
- When evaluating support and service be sure that the vendor you are considering has multiple support avenues. Can you email them? Can you call? When? How long is the wait, etc? When finding out what hours support staff are available to discuss technical issues you’ll obviously want people to be available during the same work hours as your staff. You want a vendor that has a well trained and skilled support staff. For simple or common issues you’ll want a vendor that supplies a knowledge base of information that can help you problem-solve and trouble-shoot on your own, without the need for additional support. Look for vendors with tiered support levels. This way, if you have an urgent problem, they can address it quickly. Finally, be sure that you can submit an unlimited amount of support requests without being charged additional fees.
- When purchasing a cloud based HR system, questions often arise about integration. Incorporating SaaS with other applications can be an issue for some companies. Companies that have heavily invested in other applications want to make sure that any new software integrates with their current systems. If integration is required: Ask how the integration will be achieved. Find out about price. If you require ongoing synchronization vs a one time data transfer, ask about pricing for each. Make sure the integration is going to meet both your short term and long term goals. Find out what systems integrator partner resources the vendor offers. Look for a SaaS solution that uses open, standard based APIs to link to your current systems. This will make integrations straight-forward, quick, and low cost.
- Integration is not typically easy; it’s an, at times, complex process. The main thing for an HR professional considering a SaaS solution is to find out if integration is even necessary. If so, a good vendor will have multiple integration points, flexibility with formats and be as open as possible.
- As a company that is going to be potentially using a SaaS vendor the data you possess and produce will be stored in the Cloud by the SaaS vendor. Because of this you’ll want to make sure your data is well protected and that you maintain the rights and ownership of the data. If you decide to leave the vendor or if the vendor goes out of business for some reason, you need to be able to access you data and keep it somewhere. http://www.networkworld.com/news/2010/092710-software-as-service-security.html?page=4
- A good SaaS vendor will never sell or share, for any reason, your data. Make sure that the vendor does not allow anyone to access your data other than the professionals that you appoint within your organization. Be sure the vendor allows you complete access to all of your data so that you can access it, view it, or move it to another place at any time. A good SaaS vendor will also allow you to download the data in common formats that are used today. http://www.networkworld.com/news/2010/092710-software-as-service-security.html?page=4
- Beside data ownership, there’s another are you need to evaluate when considering a SaaS vendor. That area is performance. When moving to the Cloud you are giving up portion of control that you have over the environment. You want a SaaS vendor that is equally concerned about performance as you are. Because you want good performance ask the vendor about uptime and availability. Can they provide statistics? Also, ask how the service is protected in the case of an unforeseen circumstance such as a natural disaster. Finally, ask about consequences if service level agreements are not met.
- A SaaS vendor with quality performance will good uptime close to or above 99.5%. They will have backup servers so there are no disruptions to performance. Performance will be monitored 24/7 so if anything is impacts performance it can be addressed right away. Lastly, you should look for a vendor that offers service credits if service level agreements are not met.
- When moving to a SaaS vendor you are doing so in order to take advantage of new technologies. Therefore you want to have the most up-to-date features and functionality. In order to ensure that you do indeed have the latest and greatest offered by a SaaS vendor, ask how frequently updates are made and what role customer feedback plays in those updates. You’ll also want to find out if there are changes and fees associated with enhancements.
- Look for vendors that offer new enhancements several times a year and that have upgrades that don’t disturb your service. You’ll also want to seek out vendors that offer enhancements that take very little effort—or no effort at all—on your part. In terms of incorporating feedback, make sure the vendor has a set method for gathering and evaluating feedback such as a user forum.
- Usability is an obvious factor you want to consider when looking a a cloud vendor so we won’t spend too much time in this area. However, it is worth mentioning since it’s important. Given the needs of your staff and their capabilities, basically, the main thing you want to know is can you and your staff use the service? http://www.networkworld.com/news/2010/092710-software-as-service-security.html?page=4
- You want something that you and your staff can and want to use. Make sure the system is intuitive and that it’s suitable to your staff and their capabilities. http://www.networkworld.com/news/2010/092710-software-as-service-security.html?page=4
- The last area I want to mention is contracts. You’ll want to find out, obviously, if the contractual agreements meet your needs and requirements. Is there flexibility? And what are the terms?
- Look for vendors with flexible term commitments and potential discounts.
- By asking the right questions, you can thoroughly evaluate vendors and help meet the needs of your HR dept in 2014. This year is shaping up to be a busy year in human resources. Some of the trends we’re looking at this year include: 1. Drop in Jobless Rates. The average jobless rate in 2014 is projected to be between 6.2% and 6.9%. 2. Hike in College Grad Hires. Employers are expected to hire 8% more new college grads in 2014 than in 2013. 3. Focus on Millenials. Young workers will continue to expect interesting and stimulating work environments. 4. Better Data Utilization. Recruiters will make better use of data to target talent markets. 5. Recruiting like a Marketer. In 2014, HR professionals are predicted to move from recruitment to attraction. 6. Paperless Processes. Agencies focusing on saving money and accessible data will turn to software-as-a-service solutions. 7. Maximizing People Potential. Real time performance feedback will result in higher quality employees and lower turnover. Cloud based solutions can help you as a human resource professional address all of these areas. HR SaaS solutions can help automate recruitment, they meet the technological expectations of millenials. SaaS solutions can give you as an HR professional access to data and reports that can help you keep employees motivated and that can assist you in making smart hiring decisions. You can finally go paperless with a SaaS-based solutions and you can provide real-time performance feedback that will result in higher quality employees and lower turnover.
- Cloud systems can help you do your job better as an HR professional. Preparing to respond to questions about security, service levels, and integration are important components of preparing to integrate a Cloud based HR system. Evaluating vendors data protection, performance, support, enhancement cycles and usability will help you conduct a sufficient evaluation of SaaS vendors enabling you to make smart choices for HR and your company as a whole. Even more important is understanding the benefits and advantages of having such a system in place. In this presentation we’ve defined the cloud, explored it’s benefits and discussed how the cloud is changing HR. Cloud based systems offer countless benefits and can help you meet your HR needs in 2014. I hope I’ve helped you better understand the cloud its capabilities and how to evaluate vendors. Thank you.
- Thank you for your attention. Please contact me if you want more information or have additional questions.