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HCM app modernization heads toward cloud

The refresh cycle, or application modernization boom, in human capital management (HCM) started a few years ago, but purchases and deployments took off last year, thanks to new capabilities in data and application consolidation, reporting and more, says Gartner Inc. analyst Chris Pane.

“Organizations are looking to go beyond the basics in HCM information systems,” says Pane. “They’re trying to consolidate the applications they have into a single data model, one single reporting view.”  The one-view-for-all approach is easier to manage, secure and scale across international borders.

Pane is one of several experts in human capital management (HCM) systems my colleagues and I have interviewed lately for articles on deploying human resource applications in the cloud.

While most Fortune 1000 HCM upgrades have been designed for on-premise systems in recent years, cloud services’ scalability and consolidation opportunities are attractive, too. A good bit of the consolidation effort is taken out of the business’s hands in the cloud. In addition, adoption is growing due to greater sophistication in cloud feature functionality and increasing agility in delivering new functionality for geographically-dispersed organizations.

Pane projects growth in cloud HCM deployments because cloud technologies have matured. Also, wider corporate usage of cloud has quashed some businesses’ fears. “Don’t forget also that businesses have outsourced payroll for years already,” he says. “So, moving more of HCM to a third party and not sort of doing the process on-premise (sic) is culturally acceptable.”

HCM directors are becoming less concerned about cloud security, too. These days, most of the tried-and-trusted HCM providers have their own very secure data center facilities or use mega-cloud providers like AWS. “Just in terms of physical security there, cloud is arguably a lot stronger than what you would get in a conventional data center,” Pane says.

More stability is needed, however, before government and financial organizations, among others, put HCM in the cloud. Even mainstream businesses should take precautions, such as spreading their cloud instances across data centers in several geographies.

Pane offers three more tips on choosing new HCM apps:

• Make sure that you have a clean set of data to move to the new system for reporting purposes.
• Ask yourself if all the functions in the current system are still appropriate for today, a must considering the cost of feature deployment. It is not necessary to replicate everything in the old system within the new system, and doing so can complicate the migration.
• On the other hand, make sure that no functionality is lost when buying a new HCM system.

Get more tips on HCM and cloud adoption in the cloud in my article, Six Things to do before Deploying Cloud Apps. Then, get involved in the conversation, and tell us your best practices for cloud app deployment.

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