Companies Migrating HR Systems to the Cloud?
If the trend across the entire business landscape is the migration of previously on-premise operations to the cloud, then it should come as no surprise to hear that another department has been swept up in this migration. A department that few managed service providers (MSPs) consider for cloud-based file sharing might be experiencing an emergence they need to pay attention to. According to Mike Ettling, global head of cloud and on-premise HR at SAP, the majority of companies will move their human resources (HR) IT systems from their own datacenters to the public cloud within six years.
Ettling contends that businesses are moving their HR systems to the public cloud with increasing speed. In fact, ComputerWeekly.com recently stated that research from analysts suggested 70 percent of HR leaders are already planning to replace their technology over the next two years.
“If you look at the age of HR systems on-premise, the peak of innovation was five years ago,” says Ettling. “All the market dynamics indicate a massive move to HR in the cloud.”
These are market dynamics that MSPs need to be on top of. Should it become a trend for HR systems to move to the cloud, this could create a new offering for MSPs to bundle into service packages with their existing suite of services.
As Ettling predicts, there could be a significant amount of interest for small to mid-sized companies to make this HR systems migration. Furthermore, he notes that HR is “a market no one has touched yet.”
In several emerging global markets, suggests ComputerWeekly.com, the change is already underway. In areas like Hungary, Ukraine, and the Baltic region, “companies are leap-frogging on-premise HR technologies altogether and moving directly to cloud services.”
Though he cautions that, given their investments in legacy technology, multinational companies may inherently migrate more slowly to cloud services, Ettling agrees with such an assertion.
“We have seen emerging markets quit copper wire and go to mobile. I see the same trend [in HR technologies]—skipping on-premise and doing straight-to-cloud.”
For MSPs, this is the time to strike. Ettling has found that “HR is going through a tremendous change as a business function” and notes that his company, among others, intends “to start addressing [HR to the cloud] aggressively in 2015.”
MSPs can leverage the shift in buying decisions from a purely technological focus to one that is more business-focused. Like with all aspects of a successful business, operations must be aligned throughout an organization. In order to keep a company’s HR agenda in line with the rest of the company, migrate its systems to the cloud.
