Five years ago, industry leaders questioned whether payroll, accounting or any other business software service could be delivered in the cloud. Questions raised at the time were around security and efficacy benefits.
Based on an article by Louis Columbus on Forbes.com however, PwC is predicting that by 2016, investment in SaaS (software as a service) solutions will more than double to around the $78-billion while traditional HCM (human capital management) systems will decline over 30% to less than $15-billion. So what does a cloud based HCM solution look like versus the traditional HCM model?
Let’s first take a look at what an effective HCM business solution can do – among other things, it needs to run your monthly Payroll and Human Capital Management, including Leave Applications, Succession and Talent Planning, Training and Skills Management, Business Process Workflow and Performance Management. The resource efforts, time and financial support required to manage this function without the correct solutions in place, are often the reason a business may not run efficiently.
Delivering a HCM solution that offers all of these features and more is one thing; being able to deliver this in a real time, cloud-based, operationally efficient solution is genius and will become the status quo of the future.
|Cloud Based Solution||Web Enabled Solution|
|Design||A cloud based solution is designed with scalability and usability as a key element of its architecture||A web enabled solution is developed for limited access and requires PC installation which becomes available via a web browser for remote access|
|Installation||There is no hardware or software installation required with a cloud based solution and it is accessible through a standard web browser||A web enabled solution may require VPN (Virtual Private Network) or Remote Desktop Protocol (RDP) access which will need to be installed per client and makes access tedious and technical|
|Updates/Management||With a cloud based solution, regular updates are rolled out instantaneously via multi-tenancy configurations that can be managed at no additional cost by the vendor||Web Enabled Solutions require manual administration for each instance of the software which leads to delayed updates and upgrades|
|Flexibility||Cloud based solutions are highly configurable due to its intended purpose of serving a wide spectrum of client requirements||Web enabled solutions require customisation in order to cater for certain requirements. This is costly and makes upgrades technical and tedious|
|Accessibility||As Cloud based solutions are built on an open API platform, it allows for any 3rd party product to integrate with ease||Web enabled solutions do not lend themselves to integration options which results in complex projects to extract people related data|
|Security||Reliable SSL Connections and data encryption at rest (protecting data which is not moving through the networks) ensure security across Cloud based solutions||‘Installed’ solutions cannot easily satisfy global security best practice requirements|
|Business Continuity||Cloud based solutions ensure that disaster recovery is part of their delivered solution||Web enabled solutions do not provide disaster recovery options and need to be manually designed|
The effects these differences can have on business HCM solutions are obviously huge. Clients can work from a single instance, multi-tenant, real time platform that offers consolidated payrolls and HR data – in PaySpace’s example – across 37 countries. Support for a cloud based solution is instantaneous without the time and resource requirements which mean quicker product and feature dissemination, regular updates and solution enhancements and lower operational costs. All-in-all, cloud based solutions offer a far quicker turnaround time end-to-end without the financial burdens traditional models may incur. Features also grow organically based on the consistent client interaction, so like with the African tax example, opinions and regular updates improve tax attitudes and interpretations.
A cloud solution should be able to give you instant updates with no annual license fees (as software nor hardware needs to be purchased therefore alleviating the need for exorbitant up-front set up fees), automatic system enhancements, in this case, specifically around legislative updates, be cost effective and offer real time solutions that are accessible from any mobile device (smartphone or tablet) that is backed up. cloud based solutions can attract and improve staff retention, improving business output, encourage better resource usage by focusing on more advanced areas of business growth and of course, increase the bottom line.
PaySpace, a Frost & Sullivan 2015 South Africa award winner in Product Leadership of the Year for Enterprise Resource Planning Systems, says their cloud based application has benefited their customers by being scalable, meaning their multi-tenant infrastructure makes is easy to increase computing capacity for the entire environment. The performance or nature of the multi-tenant architecture of the PaySpace solution makes it easier to maximise the performance of different elements built into the technology that ensures optimum and reliable output at all times. PaySpace’s upgrades are simple and instantaneous as they are disseminated from a centralised location and because cloud based service providers have a vested interest in ensuring successful usage; accountability becomes an attractive product feature. These updates ensure PaySpace customers are always fully tax compliant, with all legislative checking processes stipulated by the 37 countries in which they operate.
“PaySpace has positioned itself as a leading end-to-end human capital management (HCM) software developer and provider. Owing to a pay-as-you-use model, its customers have the flexibility to readily change their payroll and HCM as the need arises,” says Frost & Sullivan best practices analyst, Fadzai Deda.
“With the increase in spending budget on HCM solutions forecasted by Frost & Sullivan to increase at a compounded rate of 11,6% between 2013 and 2017, slow adoption and understanding of cloud solutions by business entities due to information security concerns will continually be a challenge industry participants will need to face despite positive growth prediction,” says Warren van Wyk, Director of PaySpace. “It is imperative that businesses understand cloud based vs web enabled HCM solutions so business decisions today can positively influence the technology need of tomorrow,” concludes van Wyk.