Getting to a Single View of the Truth with Cloud-based HCM Technology

New research reveals that replacing multiple, on-premise human capital management systems with a unified cloud-based solution delivers serious business benefits.

If there’s anything you’d think human capital man­agement solutions would be good at, it’s counting humans. Yet for all but the smallest companies, figuring out how many employees they have is a perennial headache.

The reason why isn’t that their HCM software can’t add. It’s that the information they need to answer that seemingly straightforward question resides in separate systems, such as talent management, recruiting, and payroll applications, each of which has its own hardware and database.

“There’s just no company of any size that’s been around more than a few weeks that isn’t struggling with too many disparate [HCM] systems,” notes Naomi Bloom, managing partner of Fort Myers, Fla.-based HR technology consultancy Bloom & Wallace. “Something as simple sounding as a head­count report is nearly impossible.”

Indeed, as an exclusive new survey of IT and HR executives from IDG Research Services reveals, running multiple HCM applications on in-house infrastructure burdens companies with steep chal­lenges—all of which can be overcome by replacing those systems with a software-as-a-service (SaaS) HCM solution bearing comprehensive, unified functionality.

 An End to Legacy Nightmares

Data from the IDG Research study underscores just how many companies struggle with too many HCM systems: some 31 percent of respondents to that study said they currently use two or three solutions, while another 33 percent reported using four or more. Worse yet, many of those systems are aging legacy applications burdened with defects ranging from limited reporting capabilities (cited by 34 percent of surveyed managers) and non-intuitive interfaces (cited by 33 percent) to lagging or incomplete functionality (cited by 27 percent) and lack of compatibility with mobile devices (cited by 25 percent).

None of those numbers comes as much sur­prise to Bloom, who has heard similar complaints about traditional HCM solutions for years. “They make analysis extremely difficult because these disparate systems have different underlying data designs,” she notes. They also make rolling out productivity-boosting new features difficult, because updating a legacy HCM application typi­cally requires months of effort and millions of dollars. “It’s a nightmare,” Bloom says.

In contrast, unified software-as-a-service solu­tions eliminate such issues. In addition to provid­ing comprehensive support for multiple HCM functions on a single platform, these systems also deliver quick access to company-wide workforce data. “All of your HR-related information is in one spot,” notes Stanton Jones, an analyst at Stamford, Conn.-based market intelligence and consulting firm Information Services Group Inc. Further­more, online HCM solutions usually feature intui­tive, mobile-friendly interfaces as well. “Everyone salivates when they see that,” Jones says.

Together, that ease of use and single data reposi­tory combine to enable easier, real-time reporting. That includes big data reporting, something 47 percent of respondents to the IDG Research survey said they either do today or plan to start doing within the next 24 months. 


Cloud-based HCM suites make rolling out new features and capabilities much simpler too, notes Erica Volini, U.S. HR transformation leader at New York, N.Y.-based consulting giant Deloitte LLP. “You’re getting more regular updates and new functionality that historically in legacy systems you might have to wait years to get,” she says.

Rich Benefits

Experts like Volini are far from the only ones who are enthusiastic about cloud-based HCM suites. According to the IDG Research survey, 30 percent of organizations currently use cloud-based HCM software, and another 21 percent plan to within the next three years.

Surveyed managers see online HCM solutions as a rich source of business benefits too. In fact, 57 percent of them cited improved data management as an advantage of using SaaS HCM software and 48 percent cited a unified view of data. Another 35 percent of respondents, meanwhile, agreed that providing self-serve access to consolidated infor­mation results in faster decision-making.

Linda Gerull, IT director for Pierce County, Wash., was one of them. Deploying cloud-based HCM software from Workday Inc., of Pleasanton, Calif., has empowered county officials to produce reports without assistance from IT for the first time, she notes, and the data on those reports is more com­prehensive and accurate. “I can immediately see I have ‘X’ number of people on medical leave,” Gerull says. “I never had access to that before.”

With their simple, modern interfaces, SaaS HCM solutions equip employees to perform HR functions beyond reporting on their own swiftly and easily. “That means you can run HR more efficiently or have HR focus on more strategic priorities,” Volini says. It also means employees can get HR-related tasks done faster, increasing both their satisfaction and productivity. Indeed, 37 percent of respondents to the IDG Research poll called enhanced employee productivity an advan­tage of using cloud-based HCM software.

Poll participants liked the IT efficiencies cloud HCM enables too. In particular, 36 percent of them cited infrastructure simplification as a benefit and 45 percent named decreased expenses. Pierce County is certainly saving money thanks to its SaaS HCM solution. “Our support costs have decreased by about 10 percent from previous years,” Gerull says. And that’s just programmer time, she adds. Overall operational costs are down $100,000 a year, with further gains likely in the years ahead.

Cloud-based HCM solutions that share a common database with financial management technology enable even greater improvements by allowing companies to merge people information with financial data. For example, managers can easily identify the top performers in their sales department, or the revenue impact of hiring more customer service reps. They can also setup work­flows for tasks like approving purchase orders that automatically reflect changes in reporting relationships among their employees.

According to Bloom, however, the very best reason to replace stand-alone HCM systems with a unified cloud-based solution just may be the least appreciated of all. “It creates a rhythm of innova­tion,” she says. Companies that experience the con­tinuous improvement enabled by SaaS HCM soft­ware eventually start looking for ways to improve everything else they do continuously as well. And that, Bloom notes, is a cultural shift with competi­tive implications that extend far beyond HR.

Submitted by Workday

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