Increasingly dominated by cloud solutions, the global payroll and HR software market is forecast to top $61-billion by 2030.
Mathew Payne, CIO of CRS Technologies
This growth reflects the shift towards cloud-based payroll and HR systems in businesses of all sizes and across industry sectors. The adoption of cloud-based systems has had a disruptive influence on the way businesses manage their payroll and HR functions.
One of the areas where cloud computing has made a significant difference is in its ability to manage large, dynamic sets of data with ease. The cloud facilitates real-time updates, enables remote accessibility, and allows for seamless integration with other systems and platforms.
This agility and interconnectedness mean that HR departments can respond quicker to changes, manage workforce data more effectively, and integrate new tools and technologies into their existing infrastructure with minimal disruption.
Getting IT on board
However, when it comes to transitioning to this more agile digital environment, many IT managers find themselves under pressure. They have to balance existing legacy systems with more modern, cloud-based ones. While existing on-premises solutions provide a sense of comfort, the cloud represents the ‘great unknown.’
However, by empowering IT managers with the right information and support, they will be more open to migrating to the agility, scalability and efficiency that cloud-based systems provide.
Another concern from IT managers can be the fear of becoming redundant. A key selling point of adopting cloud-based solutions is the promise of automation. In the context of payroll and HR systems, the move to cloud computing does not necessarily mean the elimination of IT roles. Instead, it marks a shift towards more strategic, value-added functions where IT professionals can leverage their expertise in overseeing and managing more sophisticated cloud-based systems.
Of course, moving to a cloud-based platform is not without its challenges. Data migration, system downtimes, potential data losses and the training required for staff are substantial undertakings. Some IT managers might believe that the cons of the transition process outweigh the pros, especially if their legacy systems are still deemed functional.
Gartner believes that one of the most significant challenges any business must overcome when embarking on a cloud migration process is to ensure the initiatives are aligned with business goals.
Business and technology leaders must also understand that migrating to the cloud does not have to be an all-or-nothing decision. Many companies opt for a hybrid approach, maintaining a balance between cloud-based solutions and on-premise systems.
Cost concerns
Even though the cloud is not a new platform, many companies still believe that making the move will always result in cost savings. While cloud solutions can be cost-effective in the long run, the initial investment can be significant. If not adequately researched, IT managers might perceive cloud migration as a financial strain, especially if they are not looking at the long-term ROI.
A 2020 Deloitte survey found that, on average, IT departments allocate more than 55% of their budgets to maintaining business operations. It also highlighted the gap between business expectations of IT and providing the necessary financial support.
It therefore becomes difficult to motivate the funding required to migrate to the cloud within this complex dynamic. And yet, the cloud does pave the way for business innovation, as Deloitte reports.
While the upfront costs of moving to the cloud can be significant, decision-makers must also consider the long-term financial impacts and operational limitations of maintaining legacy systems. The transition to cloud computing opens pathways for business innovation, agility and long-term cost efficiency that can significantly outweigh the costs associated with legacy environments.
Moving forward
Regular training, workshops and clear channels of communication between IT departments and business leaders can bridge many of these concerns when it comes to cloud migration. While it is vital to question and investigate the reasons behind any resistance to technological advancement, it is equally crucial to approach the subject with empathy and understanding.
By fostering a culture of continuous learning and open communication, companies can better equip their IT teams to make informed decisions about cloud adoption and integration while giving their payroll and HR teams access to more modern, agile solutions.