August | 2012
As businesses embrace cloud technologies to beat costs, one area that is grabbing the attention of many is human capital management. Enterprises across markets are seeking cutting-edge HR solutions to raise their productivity levels. So, Oracle's acquisition of Taleo Corp for $1.9 billion earlier this year and SAP's buy out of Success Factors for $3.4 billion last year comes as no surprise.
The advantages of shifting to a cloud computing HR system are well known: it frees up enterprises from investing a great deal in technology infrastructure and applications, spending on maintenance and storage, and hiring dedicated staff to man those systems and training them. Instead, you can rent the services you need, access them through a simple Internet browser, and pay as you use those resources.
More importantly, such big-ticket acquisitions show how the role of HR in organizations has undergone a radical transformation in the last few years. Many companies had made massive investments in HR infrastructure. But the results were mixed, at best.
Now with the belt tightening all around, and new demands for return on investment and other tangible results, companies are balking at sinking substantial financial resources into HR applications.
So the entry of cloud-based HR software has come at an opportune time for business leaders looking for better HR delivery models to boost growth. The software as a service, or SaaS, model gives organizations flexibility and scalability while making them more agile. And unlike on-premise applications, SaaS HR is easy to migrate to, letting organizations focus on their core activities. These applications are also easier to implement and can even talk to legacy on-site HR applications that businesses are running.
For organizations that work across geographies and have to deal with variable workloads, this ability to scale up, and add or remove capacity at will is a godsend.
Cloud-based HR applications also ship with features that enable HR managers to hire and connect with the workforce through new channels such as social media. As businesses struggle to attract the best talent to weather the current economic slump, cloud-based applications allow HR departments to reach out to talent where they are, hire them, and enhance their experience inside the organization to retain them. That is one more feather in cloud computing's cap as it helps businesses pull out of the downturn and create value.
Has your organization deployed cloud-based HR applications? Share your thoughts with us.
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