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Cloud-based HR management systems: why aren’t they delivering?

Thinking of investing in Cloud-based HR systems? You might want to hold fire. A new report from KPMG suggests that many organisations are struggling to realise the full potential of the technology. In todays blog, we consider Cloud-based HR management systems and why they aren’t delivering.

In its report, entitled ‘Cloud HR: the future belongs to the bold’, professional services firm KPMG interviewed 850+ executive respondents across 52 countries.
The findings indicate that many companies are struggling to realise some of the benefits they were promised when Cloud technology was sold to them.

Therefore, just a quarter (24%) of executives are finding that Cloud technology reconfigures the HR function, thereby driving greater business value. Yet, not far off half (42%) of the respondents said that they are planning to invest in the technology.

The reasons why
It’s not that the benefits don’t exist as much as businesses not being in a place to achieve them.
Without a well-structured, considered approach to selecting the right technology for your organisation, the chances are you’ll fall short on the benefits the solution was expected to deliver. And thus it ever was: in other words, this is not a new concept in the world of enterprise software selection and implementation.

Understand your strategic goals
Before you make any decisions, to make the right technology choices, you firstly need to invest in understanding your organisation’s strategic goals, values and culture, in order to drive out the high level requirements for your HR technology. Remember, technology should be the enabler for your people and processes, so at this point it’s worth taking a step back and considering your legacy software.

There’s life in the old dog yet
It’s likely there is scope to optimise or enhance your existing software to meet your high level requirements, if not fully, then at least in part. Perhaps because of the way it was originally implemented, or you didn’t take full advantage of new functionality when you last upgraded, or because there are other software organisations out there offering mature solutions that integrate with your legacy system. So it could be that by doing a comprehensive health check of your existing solution, you can identify and close some of those gaps with minimal expense and start to more fully realise the benefits of that considerable investment.

Or is the gap too wide?
After all that, you may decide your legacy system still falls short of the functionality you need to support your organisation’s goals. If so, your efforts have not been wasted. The information you have already gathered is vital for driving your business case and forming the basis of your approach to selecting the right Cloud HR software. Done properly and in order to achieve the best outcomes for your organisation and your people, this is a project in itself, before you even get to the implementation stage. However, that up-front investment means your Cloud software is much more likely to deliver on the promised benefits.

In the meantime, as an added bonus, implementing some of those tactical changes you identified as part of your legacy system health check may even help improve business processes in the short term, smoothing and simplifying the transition to your new HR technology.

So, in order to avoid KPMG’s conclusion that “Cloud technology projects can turn into an expensive exercise delivering very little value”, the message is clear: don’t just transition to Cloud-based systems without a thorough, structured evaluation of your options, including your current solution. Only then can you be sure your HR technology delivers what your organisation actually needs.

Click here to read the full report or contact us to arrange a more detailed conversation with our Head of Practice.

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