Beware these 5 disruptive changes when you go cloud HCM

In the past year, the accelerating trend towards cloud HCM has yielded a growing number of organizations who've made the move and are ready to talk from experience about what they've learned. We've written up many of those stories on diginomica, particularly those from larger, global enterprises.

Several common themes have emerged. There are the obvious benefits that everyone expects from going cloud, such as greater flexibility, ease-of-use and cost savings — for a striking example of the latter, Alcatel-Lucent achieved a massive 30 percent savings in HR costs within just two years on the back of its move to cloud.

But these benefits come at the cost of some disruption. All of these enterprises highlighted a number of less predictable consequences for organizational culture and working practices. Here are five disruptive changes that you should be ready to deal with when adopting cloud HCM.

Everything moves faster

Although everyone welcomes the greater flexibility and faster implementation cycles of cloud applications, few are prepared for the speed at which this means they have to accommodate change. Catherine Leaver, director of global HR transformation at Telefonica, describes the lessons learned from embarking on a global roll-out of cloud HCM to 130,000 employees:

Implementation will be very quick, but it can only be as quick as your organization is capable of receiving.

How ready is your organization to receive this scale of change? You have scarcity of resources to consider.

Be that the IT roadmap, be that the business readiness to receive the change, these are all factors that need to be considered. The system might be ready, but is your business?

The business has to be prepared for a more collaborative, ongoing involvement in the IT implementation than it's been used to, warns Imperial Tobacco's Mark Rotheram, global head of HR technology:

Now they’re being asked to be involved in the project right the way through. It’s a lot more intense in terms of their involvement. They’re expected to be a lot more involved in the development of the system.

The outcome will be fantastic, but getting that mindset shift is difficult.

And it never stops. The twice-yearly functional update cycle of most cloud HCM software will keep you on your toes, warns Gerard Hussey, vice president of HR transformation at pharmaceuticals giant GSK:

You have the advantage of always being up to date, but you’ve got to be watching all the time. There are some changes quite often — weekly — and then there’s the two big releases a year. Somebody has to be managing and mapping that.

It changes the way you work

Going cloud will have three major impacts on how HR operates in your organization, says Telefonica's Leaver:

• Standardized global processes
• Standardized HR roles (and access rights)
• Self-service culture and operating model

While desirable, these are big changes for most organizations. After rolling out cloud HCM to a 110,000-strong global workforce at pharmaceuticals giant Sanofi, VP HR services and Workday program director Denis Sacré warns:

Be prepared for a big change. If you’re coming from ERP, the cloud is different. It forces everybody to accept a similar type of contract, a similar way of operating and so on, so you’ve got to be prepared for some change.

At each step, you have to think carefully how to transition existing manual processes into their digital equivalent. It's often not a like-for-like translation, says Jackie Wilson, people services manager at UK telecom provider TalkTalk:

It’s not as simple as you’d think, automating a manual process. We didn’t just lift and shift ... actually getting people to think future focus — instead of, ‘I do this on a form’ or whatever, to see it in the system — was quite a challenge.

The worst thing you can do is to see this as just a technology implementation, says GSL's Hussey. You have to be fully prepared for some far-reaching change management.

All the issues we had post go-live were around the end-to-end service model. So if you only focus on the technology, you’re dead.

We find that first six to nine months after you go live is really challenging, because you now have a very different service model, where much more is online.

Leaver concurs:

This is not just an IT implementation.

You cannot separate system change from broader organizational change. You have to adapt the two, and you have to deliver the two at the same time.

As soon as you start to implement your first modules, you will immediately have changed the process, and you will immediately have made some alignment of roles and responsibilities. If you ignore that fact, you will struggle to deliver the embedding of those processes.

It puts the business in the driving seat

Greater flexibility and self-service access means that the HR team and their business colleagues aren't beholden to IT any more whenever something needs to change. This is a big change, says Jermaine Holt, director of global services for Edgewell Personal Carem which achieved a 12-week cloud HCM implementation at the beginning of last year:

Now your business users don’t have to be IT experts, but they have the control. They can request their own changes; they can help drive design. They can be an integral part in the testing. They can become the expert in understanding how the software can be used to drive business value, because now they’re in the drivers seat. That’s the biggest change.

From an HR perspective, it's a relief not to be involved in the technology infrastructure business any more, adds Alcatel-Lucent's Geoffroy:

I don’t want to redevelop an on-premise system each time a law is changing somewhere in the world. It’s not my business. I’m not in the technology HR business. My colleagues from SAP are in that business. With the cloud, I have the quarterly release, so I don’t mind any more. I choose a long-term partner and they provide to me all the relevant technology innovation.

You need in-house skills

While some aspects are easier from an IT perspective, any successful cloud HCM implementation will still rely on proper planning, the right resources, and careful governance. Sanofi's Denis Sacré advises:

Configuring Workday is a lot easier than deploying any ERP tool, but it’s still a big project and you’ve got to be prepared and be equipped to run a big project. Do not underestimate security, reporting and data migration versus the functional domain.

Similarly to any other project in HR and in the ERP world, you really need to have strong governance. You are probably going to use Workday to introduce a few new things. At some point, you’ve got to find a compromise between speed of deployment versus perfection.

Edgewell's Holt says there are three requisite skills you need on your team:

• Good IT leadership skills
• A highly skilled cloud/IT architect
• A cloud evangelist to sell the project internally

Committed, persuasive leadership is crucial, he says:

They have to be true to that vision. They cannot waiver, because there’s going to be people wanting to jump off the fence, and they’ve got to stay the course.

You'll appeal to a younger set

Implementing cloud HCM makes a statement about what kind of organization you are, says Live Leer, VP of global human resources at browser software maker Opera Software, which rolled out cloud HCM to 1500 global employees:

It’s also about what type of people do we want to work in the organization. It’s about culture change. We don’t people who expect someone to do their administration for them.

It means you can start making HR strategic, because you have time. You’re not entering an address for someone or spending three days doing headcounts. I don’t know if anyone’s ever been there – I have.

Delivering a cloud HCM application to mobile devices means people can use it like any other application in their daily lives. This is how staff at public charter schools chain Rocketship Education access HCM, says VP HR, Dynasti Hunt:

For our teachers, it’s great to be able to pull up the app on your mobile phone, do what you need to do, and then keep moving.

You pull out your phone, you may check your Facebook, you may check your Fairsail, you’re going to keep moving. That’s our population of employees.

In the competitive talent landscape, offering that kind of convenience is rapidly becoming a necessity, suggests Alcatel-Lucent's Geoffroy:

The enterprise has to adapt very quickly, because it’s a competitive advantage. I cannot go and chase for talent if I’m unable to propose to them a way to manage their daily, working live in the way that suits their needs and the way they are also managing their own home life.

We have to fulfil this digital gap as quick as possible. For me, it is not a revolution, it’s almost obvious to move the needle towards this digital world for HR.