Rise of the Cloud

The rise of cloud-based computing is widely predicted to have a significant impact on organisations of all sizes in the next few years; it's something that those responsible for people management and HR strategies need to be aware of and plan for.

Cloud-based services are already beginning to have an impact on HR (even if they may not recognise the term). A 2009 survey of large enterprises found that 44% were using cloud services in some part of their HR processes, most commonly in recruitment management.

The term 'cloud-based computing', (sometimes referred to as ‘Software-as-a-Service' or ‘on-demand') refers to the use of computing resources (i.e. software, storage, hardware) that are based out in the internet (‘the cloud') and accessed by users on a subscription or ‘pay-as-you-go' basis. This is a change from the traditional computing model where companies pay big upfront sums to buy all of the hardware, software and networks themselves and then have all the associated costs and hassle of owning, managing and supporting that infrastructure.

The cloud model will make the deployment of new technology-based services far easier and will also enable valuable information to be shared far more easily within and between organisations. As a result, cloud-based computing is likely to bring changes in five main areas; each of these trends has implications for HR strategy, policies and processes:

• Improved knowledge sharing and collaboration within the organisation
• Greater use of outsourcing and a rise in the number of virtual organisations
• Increased collaboration between businesses to address joint opportunities
• Accelerated timescales to launch new products and enter new markets
• An increase in flexible/ remote working patterns

Cloud-based services present significant opportunities but also some challenges that HR teams need to be considering.

It may now be easier to give managers and employees direct access to information that was previously only accessible to the HR team - whether that's employee data or guidance on relevant legislation. This has many potential benefits: empowering those managers and employees, enabling time-consuming processes to be automated and reducing the admin burden on the HR team.

However it also presents new questions that need to be considered:

• What is the appropriate split of responsibilities between HR and business managers if access to knowledge isn't an issue?
• Who should be allowed access to what information? 
• How does the organisation ensure that it's meeting its data protection responsibilities?

Cloud-based services make it easier to share information not only within organisations but also externally - with partners, suppliers and customers. This is likely to lead to more partnering, more outsourcing and faster times to market with new ventures. All of which have important implications for HR strategy.

More flexible resourcing strategies and organisational structures will be required in order to respond to the changing environment. Cross-company teams organised around specific projects will be more common. On occasion employees may be working into a manager in a different company. How do you effectively manage employee performance and development in this situation? How should reward schemes be organised? What are the contractual implications? How do you ensure company IP is protected?

We can't yet predict all of the ways that the cloud-based model will impact organisations, but it's safe to say that the changes will be significant. This will present all sorts of new challenges for HR and the sooner that they start considering the questions, the more likely it is that they'll find the appropriate answers.

Source: Phil Brown, Managing Director of Youmanage, written on 29th January, 2010

If you have any concerns about the ability of your current HR system to help you plan for and cope with the shift to cloud-based services, then maybe you should consider Youmanage?

View the free online demo of Youmanage for more details, or call us on 0844 335 8486 now to discuss your requirements further.

Best regards,

The activHR Consulting team

activHR Consulting's Online HR Toolkit provides line managers and HR users with all of the tools, information, processes and up-to-date guidance that they need to manage effectively from anywhere- in one easy-to-use solution.