At the Softworld HR & Payroll Exhibition at Olympia last October there were a surprising number of delegates interested in Cloud Computing. The seminars on the subject were packed and the exhibitors with online applications were inundated with enquiries1.
So it looks as though the initial techie-hype has now progressed into consumer interest. It’s no longer a risky decision for early adopters; there are many well established suppliers of online applications who have reference sites with several years of experience. Salesforce.com and NetSuite have established large satisfied user-bases.
What is Cloud Computing?
To explain a little about the concept of online applications, of which various types are bundled together in the term Cloud Computing. The basic difference between online applications and on-premise applications (installed on your local server) is the location of the application. It is often said that bureau applications and outsourcing also fall into this category. The other big difference is cost; online applications are charged on a per-seat per-month basis whereas on-premise applications have an up-front capital charge plus installation, maintenance and upgrade charges.
It’s a bit like power for our homes. A century ago we had to provide our own power from paraffin lamps, coal fires etc. Today we use the national grid to provide gas and electricity. Is there a need to have an HR application resident on our own computer? Especially as you have to undertake your own back-ups, maintenance and upgrades. Online applications have ‘upgrade fairies’ as an MD of a popular online provider called them, they appear during the night and back-up our files and upgrade the applications; all free of charge.
Available applications
So what Cloud Computing applications are now available for the HR department? Virtually anything. The complete range of traditional HR and payroll applications are now available on-line from an increasing number of suppliers. There are also a wide variety of unusual HR applications that have been specifically written to take advantage of on-line technology. These include:
- Direct links to recruitment agencies, data-banks, insurance and pension’s data.
- Post code look-ups that integrate with home addresses.
- Employee expenses that can be completed directly by the employee from any internet connection.
- For diverse organisations, the ability to enter employee data from a range of manual or electronic devises from multiple points of entry – using the internet as the network infrastructure.
Data storage and security
The traditional on-premise application suppliers will of course raise the old chestnuts; security of remote data, back-ups, renewal of the contract and integration with on-premise applications. These have all been successfully handled by the responsible online providers. There are international standards for the storing of data remotely, covering security and fail-safe data recovery. Few providers store their own customer’s data; this is usually outsourced to professional storage sites with all the necessary accreditations.
Many off-line suppliers have an on-premise version that will allow the data to be brought in-house at the end of a contract. Some provide a downloadable file that can be used for on-premise back-ups or to populate a replacement system. Many online providers have the ability to import and export data from their systems for integration with external systems. The online market would not be growing by the predicted 20% year-on-year had it not addressed these obvious issues.
The software market is usually the first out of a recession as companies take steps to re-engineer their systems and eliminate unnecessary labour intensive tasks that could be easily accomplished by a computer. Duplication of data is the big problem for most HR departments – trying to keep payroll in line with salary planning and personnel systems can be a nightmare without an integrated system. Online applications can enable advanced systems to be implemented without the knock-on effect to the existing computer infrastructure. Since online applications are stand-alone and hosted on separate remote servers they are outside the internal legacy IT problems – usually only requiring a web-browser interface from any type of desktop computer. For HR and payroll this has many strategic advantages as, other than a monthly update to the general ledger, there is little internal integration required to back-office systems.
So if you are thinking about changing your existing HR and Payroll systems or looking to extend your present system it’s worth also considering online applications. The low initial set-up costs will be a surprise and the monthly charges are quite realistic if you take into account all the hidden charges associated with on-premise applications.
At the Softworld HR & Payroll Exhibition at Olympia last October there were a surprising number of delegates interested in Cloud Computing. The seminars on the subject were packed and the exhibitors with online applications were inundated with enquiries1.
So it looks as though the initial techie-hype has now progressed into consumer interest. It’s no longer a risky decision for early adopters; there are many well established suppliers of online applications who have reference sites with several years of experience. Salesforce.com and NetSuite have established large satisfied user-bases.
What is Cloud Computing?
To explain a little about the concept of online applications, of which various types are bundled together in the term Cloud Computing. The basic difference between online applications and on-premise applications (installed on your local server) is the location of the application. It is often said that bureau applications and outsourcing also fall into this category. The other big difference is cost; online applications are charged on a per-seat per-month basis whereas on-premise applications have an up-front capital charge plus installation, maintenance and upgrade charges.
It’s a bit like power for our homes. A century ago we had to provide our own power from paraffin lamps, coal fires etc. Today we use the national grid to provide gas and electricity. Is there a need to have an HR application resident on our own computer? Especially as you have to undertake your own back-ups, maintenance and upgrades. Online applications have ‘upgrade fairies’ as an MD of a popular online provider called them, they appear during the night and back-up our files and upgrade the applications; all free of charge.
Available applications
So what Cloud Computing applications are now available for the HR department? Virtually anything. The complete range of traditional HR and payroll applications are now available on-line from an increasing number of suppliers. There are also a wide variety of unusual HR applications that have been specifically written to take advantage of on-line technology. These include:
- Direct links to recruitment agencies, data-banks, insurance and pension’s data.
- Post code look-ups that integrate with home addresses.
- Employee expenses that can be completed directly by the employee from any internet connection.
- For diverse organisations, the ability to enter employee data from a range of manual or electronic devises from multiple points of entry – using the internet as the network infrastructure.
Data storage and security
The traditional on-premise application suppliers will of course raise the old chestnuts; security of remote data, back-ups, renewal of the contract and integration with on-premise applications. These have all been successfully handled by the responsible online providers. There are international standards for the storing of data remotely, covering security and fail-safe data recovery. Few providers store their own customer’s data; this is usually outsourced to professional storage sites with all the necessary accreditations.
Many off-line suppliers have an on-premise version that will allow the data to be brought in-house at the end of a contract. Some provide a downloadable file that can be used for on-premise back-ups or to populate a replacement system. Many online providers have the ability to import and export data from their systems for integration with external systems. The online market would not be growing by the predicted 20% year-on-year had it not addressed these obvious issues.
The software market is usually the first out of a recession as companies take steps to re-engineer their systems and eliminate unnecessary labour intensive tasks that could be easily accomplished by a computer. Duplication of data is the big problem for most HR departments – trying to keep payroll in line with salary planning and personnel systems can be a nightmare without an integrated system. Online applications can enable advanced systems to be implemented without the knock-on effect to the existing computer infrastructure. Since online applications are stand-alone and hosted on separate remote servers they are outside the internal legacy IT problems – usually only requiring a web-browser interface from any type of desktop computer. For HR and payroll this has many strategic advantages as, other than a monthly update to the general ledger, there is little internal integration required to back-office systems.
So if you are thinking about changing your existing HR and Payroll systems or looking to extend your present system it’s worth also considering online applications. The low initial set-up costs will be a surprise and the monthly charges are quite realistic if you take into account all the hidden charges associated with on-premise applications.
[1] See also my previous article: ‘ From mainframes to clouds’, published in The People Bulletin published on 24 September 2009.