HR Sees Clear Skies in Cloud Computing

New research indicates that HR professionals worldwide are quickly turning to cloud computing and its variants to meet their key business challenges and as a means of closing the effectiveness gaps that currently exist between HR priorities and HR systems. Nearly 40% of executives surveyed indicate plans to implement SaaS for one or more core HR system between now and the end of 2011, and nearly 50% plan to have SaaS-based, core HR administration applications in place by the end of 2012. Additionally, results from this survey, conducted jointly by Plateau Systems, provider of enterprise-class SaaS solutions for talent management, and research and advisory firm Saugatuck Technology, reveal that executives view support and implementation costs as the most important business considerations when selecting an SaaS or cloud-based solution provider.

Conducted between January and February 2010, the survey included 226 HR and IT executives and professionals. Seventy percent of survey respondents were employed by companies with more than 5,000 employees, with 35 percent of respondents reporting that they worked for companies with more than 10,000 employees. More than 65 percent of survey respondents were based in the United States, 17 percent were from continental Europe, and the remainder were from Asia.

Support (39% percent) and implementation costs (33 percent), according to the results, are the most important business considerations in selecting an SaaS or other cloud-based solution provider. But the have concerns, as well. For instance, 48 percent say data security and privacy are concerns that give them pause in embracing SaaS and other cloud computing solutions. By a wide margin, it's the number one concern, followed by concerns over the closely related data and transaction integrity, as well as the ability of end users to adapt to new business processes and the ability to integrate cloud business solutions with existing enterprise applications.

The survey reveals HR executives' perceived business challenges, as well, over the next two years. Topping their lists are change and transformation; addressing the skills gap; reducing overall labor costs; and leveraging technology to improve business performance. HR executives believe their current HR systems are falling short of helping them meet those goals, according to the findings, resulting in a significant “effectiveness gap” between HR priorities and the abilities of existing HR systems: The largest effectiveness gaps exist among the most important HR priorities, including those related to acquiring and retaining key talent (effectiveness gap of 26 percent), managing talent (effectiveness gap of 28 percent), and performance (effectiveness gap of 29 percent).