Making HR Simpler. A Guide to HR Software in the Cloud

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1 Making HR Simpler A Guide to HR Software in the Cloud

2 Index Introduction 3 Everyone Wins 4 What is the Cloud and where does SaaS fit in? 4 What are the benefits? 5 Food For Thought 7 Questions to Ask 8 About Cezanne HR 9 HR In the Cloud 2

3 Introduction Businesses today rely heavily on information technology to increase efficiency and drive performance. For HR, an effective, up to date software system is essential if they are to keep pace with the demands of today s workforce and their own organisations. In the past, adopting new HR software was often a costly, slow and painstaking process. Upgrading existing systems to meet new business requirements was equally painful. But thanks to the growing use of software that is delivered from the Cloud, organisations now have the ability to be much more agile when it comes to implementing new solutions to meet the latest business challenges. With Cloud-based solutions (sometimes known as Software as a Service, or SaaS) you simply subscribe to software and the system it is hosted on, rather than having to buy and maintain the software and everything that s required to run it. There are enormous benefits in terms of cost, flexibility, speed of implementation, simplicity and scaleability all of which are described later. Beware of Imitations US analysts, Forrester, recently reported that too many vendors today are seeing an opportunity to make big profits in software-as-a-service by taking advantage of customer naiveté and simply rebranding older deployment models as SaaS, on-demand, or cloud. The company then goes on to warn that these solutions can cost more, inevitably fail to live up to customer expectations for agility, standardisation and efficiency, and lock companies into poor sourcing decisions. Since almost invariably it s these older, less agile systems that offer the most features, this presents a significant challenge for any organisation looking to invest in new software. How do you choose between systems that have such very different value propositions? This paper aims to highlight the benefits of investing in solutions based on the new multi-tenanted approach to software delivery. HR In the Cloud 3

4 Forrester predicts: Nearly 6 fold growth in SaaS between 2011 and 2020 Everyone Wins For HR departments, the Cloud offers an opportunity to acquire up -to- date HR software solutions that meet their specific requirements without having to negotiate with IT for the resources to implement and maintain the HR software, or the technical infrastructure that s required to run it. With Cloud-based solutions, the HR function is more able to drive their own agenda within their own time line. For the IT team, it s a chance to liberate IT resources as the overheads associated with ongoing software and hardware maintenance and upgrades go away. IT costs are more transparent, because nearly all of the services are provided by the supplier and invoiced on a subscription basis, while service level agreements ensure that those using the system receive timely support without internal IT staff needing to intervene. For employees and their managers, it means 24/7 access to the information they need from anywhere. All that s needed is access to the internet via a standard web browser or mobile app. It s a real bonus for employees that are frequently on the move or managers that need to split their time between different offices. Companies of all sizes can benefit from Cloud-based solutions and indeed they are already being used in a wide variety of settings, not just for HR, but also in areas such as finance and customer relationship management. In fact, estimates suggest that spending on Cloud solutions could increase by as much as 500 % over the next 4 years. Leading US analyst Forrester has predicted a nearly 6 fold growth in SaaS between 2011 and What is the Cloud and where does SaaS fit in? Put simply, the Cloud is a term that s used to describe the internet, and Software as a Service (SaaS) or Cloud-based solutions, describe the software that s delivered from within this Cloud. SaaS: Describes the software that s delivered across the internet or In the Cloud Instead of your data and programs sitting on your company PC or servers, they are hosted in specialist data centres; usually managed by internationally recognised providers such as Amazon Web Services. Businesses simply pay a monthly subscription to cover the specific aspects of the software they require and the software provider is responsible for everything that is needed to run the service, including the hardware, software infrastructure, security features and support. Users easily log on and access the software solution via the internet. Importantly, true Cloud solution vendors provide updates and enhancements to the system, which are automatically added at regular intervals. This ensures that customers always have the very latest functionality without the overheads associated with updating traditional in house or hosted applications. HR In the Cloud 4

5 Benefits: Hosted and managed externally Operating costs rather than capital expenditure Easier to implement Updated seamlessly What are the benefits? Lower Up front Investment With Cloud solutions, there is no need for companies to invest in building IT infrastructures with multiple servers and all the associated operating systems, databases, firewalls and back up facilities needed to keep systems up and running and sensitive HR information safe. Everything that is required to run the system is hosted and managed externally by the vendor from a central location and users simply pay a monthly fee to use the service. This subscription based approach means that in accounting terms, costs are regarded as operating costs rather than capital expenditure. This can make it easier to get budgets signed off, as you are not asking for huge lumps of cash up front or tying up precious capital in assets, such as IT hardware, that may rapidly become obsolete. Instead, the investment is transformed into smoother operational expenditure. Speedier Setup Procurement processes are usually much simpler and faster for a Cloud-based product. There s no software or hardware to install, so you are not reliant on other vendors or your IT department to scope and purchase the supporting software and IT infrastructure. True Cloud solutions are usually easier to implement too, as the vendor normally designed the product from the very start to get you up and running quickly. They should be able to offer you advice on how to best set up your system, and perhaps help with data migration too. Reduced Pressure on IT Teams IT departments, in common with HR, are often hard pressed to keep up with the constant changes going on in the organisation. They are, of course, not just supporting HR but providing a service to the whole business with the conflicting demands that brings. With Cloud solutions, there is a limited requirement for the internal IT team to be involved on a day to day basis as virtually all of the activities associated with managing and maintaining the system are the responsibility of the vendor. That also means that new Cloud HR systems can usually be implemented more quickly because projects are not reliant on changes being made to the internal IT infrastructure, and don t get pushed to the bottom of the pile by other priorities. For smaller companies with limited IT resources, or businesses with high IT staff turnover, Cloud solutions provide another advantage too. You don t need to worry about how to manage the day to day availability of your HR system if key people leave, as the knowledge and responsibility is with the vendor. HR In the Cloud 5

6 Continuous Improvements One of the biggest frustrations with traditional in house or externally hosted HR software systems is the amount of time it can take to upgrade them as needs change or new features become available. It s often a costly exercise, both in terms of money and resources, and sometimes calls for a complete re install. The beauty of true Cloud solutions is that systems are updated seamlessly. Vendors simply add enhancements to the system on a regular basis, ensuring clients always have the latest features and the best functionality. Updates are usually made during scheduled maintenance windows, so there is minimum disruption to clients and the new features are simply there waiting for them the next time they log on. Clients also benefit from much more frequent product enhancements than with the older style applications. That s because these solutions have been built from the ground up around new product architecture, sometimes known as multi -tenant. In this environment, clients have their own instance of the software, but share a single code base. This means that, rather than juggle the conflicting demands of maintaining different releases, as traditional software suppliers have to do, Cloud solution vendors can concentrate on adding new features to just a single code base. Innovation is easier and everyone benefits from always being the latest release of the software. It s a much more productive approach for everyone. Scaleability Companies are not static. Needs change as organisations grow, restructure, merge, acquire new businesses or simply change focus. Updating an internally hosted IT system to reflect these changes can be an unwieldy process. Increasing the scope of an in house HR system may, for example, involve having to invest in extra computer hardware. With Cloud solutions, the vendor will be operating in a large scale environment where there is plenty of spare capacity and these kinds of changes can usually be accommodated very quickly. Return on Investment Research from Knowledge Infusion, a leading Human Resources consulting organisation, suggests that Cloud solutions are often half the cost of an internal hosted solution. Another report, by Forrester, puts return on investment at 26%, with payback within months. On the surface, if a straight comparison is done between Cloud solution fees and an on premise license, the Cloud option may appear to be more expensive. But the picture can change significantly when all the factors, such as internal IT resource, maintenance costs and the cost of updates, are taken into account. The financial benefits will, of course, vary from company to company and all organisations will need to conduct their own cost analysis and weigh up the pros and cons. HR In the Cloud 6

7 HR information is highly sensitive. The reality is that good Cloud solution vendors offer an extremely high level of security Food For Thought A proposed move to the Cloud can lead to healthy debate within organisations. As well as having to make a strong business case, HR teams often find themselves having to respond to concerns about how aspects of the service will work in practice. These are the issues that are most commonly raised: Security Data security is, quite understandably, a big concern for organisations. HR information is highly sensitive. Companies don t want details about their employees getting out into the public domain and of course they have a legal responsibility to keep it safe. The reality is that good Cloud solution vendors offer an extremely high level of security often better than can be achieved by an internal system because their business depends on keeping everyone s data safe. Their systems are tried and tested and of course there are plenty of other precedents for the safe out sourcing of organisational data. Payroll systems, for example, have been handled successfully by third parties for many years. The key is to ensure that any potential vendor s system can provide the following: Secure Product Architecture: In other words, a system that is built in several layers, so that each users permission to access or change information is carefully controlled. Roles -based Access: A secure system will give you control over exactly who can access what information while at the same time ensuring people can see the information they need to see. Embedded Reporting: The Reporting tools need to be fully integrated in the security of the system, so users cannot pull reports directly off the database and bypass system security. Secure Data Centre: A good SaaS vendor will use a recognised, established data centre that has proved itself to be best in class. Cezanne OnDemand for example, is hosted by Amazon Web Services, from the company s state of the art data centre in Ireland. AWS is one the world s leading specialist suppliers of hosting services and provide both stringent security controls as well as exceptional connectivity. You can read more about their services here: (http://cezannehr.com/services/data-security/). Creating the Right Internal Culture HR departments may find themselves having to negotiate their way through some internal politics when a move to HR in the Cloud is first introduced. In most cases, IT and HR departments both see the benefits of this alternative method of delivery and are able to work happily together towards successful implementation. In some cases, however, there may be some in the business that see these solutions as a threat, or don t trust that their data will be kept safe. It is important to be aware of these possible sensitivities and be prepared to work closely with the IT team to demonstrate a strong business case for the change if this is required. It makes sense to get others who can act as champions on board at an early stage too. Senior management and finance department can help you win over key gate keepers especially if you can combine a strong business imperative with the Cloud financial proposition. HR In the Cloud 7

8 Questions to Ask Security Are they using an established, reputable and independentlycertified data centre (ISO27001 and SOC I + SOC2 are the ones to look out for)? If not, you may want to spend some time benchmarking their data centre against those with an established track record. What security processes are in place to protect your organisation s data? How do they match up against your own internal processes? Service How are updates managed and what input is needed from you? For example, is the process seamless, or might you have to re implement configurations that you have made? What kind of support is available on an on going basis? Is training provided to get you up and running? What service level agreements are in place? You may want to look at the guaranteed availability of the system and check this against actual performance over the last 3, 6, 12 months. Vendors should have these reports as standard. T and Cs How are subscription fees managed? Can you decrease as well as increase your commitment during the subscription period? What is the notice period if you decide to cancel? How do you get your data back? Is there a charge for storing document attachments? Some vendors charge if you exceed a certain amount. That can build up fast if you are storing scanned documents Do they charge more if you want to add other languages? Where is the data centre based? What are the implications for local data protection legislations? HR In the Cloud 8

9 About Cezanne HR Cezanne HR is headquartered in the UK with offices and partners in key world wide countries. Our focus is to provide online HR software that helps you to lower costs, raise productivity and manage your people better. We do that by offering fast-to-implement, easy-to-manage and cost-effective HR solutions that go well beyond simple HR databases; providing you with all the features you need to manage your people smarter, faster and more effectively. We re led by a team of HR industry experts with many years experience of supplying HR software to companies of every size, and in every industry sector. That s why, from the very start, we decided to build an exceptionally robust and scalable SaaS platform for Human Resources Management which, like our customer community, is growing all the time. UK & International Cezanne HR Ltd. 46 Loman Street London SE1 0EH Tel: +44 (0) USA Phone: Italy Tel: Spain Tel: Brazil Tel : HR In the Cloud 9

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