Looking to the clouds in Human Capital Management

While the idea of cloud computing has been around since the early 1990s, it was not popularised until almost a decade ago in 2006 when Amazon.com released its cloud-computing platform which was to evolve into the now-ubiquitous AWS. The advent of mainstream cloud computing was followed by its robust adoption at companies all over the world that were looking to tap into the increases in efficiency and agility that it promised to bring. As various functions within the organisation began to migrate to the cloud, the HR function viewed it as a way to reduce its profile as a key cost centre, but to instead transform itself into a significant contributor to growth.

In the early days, HR departments used disparate and niche HR technology services primarily in performance management and sales to automate these functions with the hope of better performance. Many of the early forays into this type of business technology were also spurred by the attractiveness of the increasingly popular software-as-a-service business model that allowed HR departments to minimise the risk of technology procurement by adopting a usage model instead of an ownership model.

As HR tech became more and more ubiquitous, the ad-hoc approach to adopting disparate software systems had led to a fragmented HR tech landscape within many organisations, in terms of data silos, overlapping access, and conflicting processes. As the industry matured, the shift we are now seeing is the adoption of fully integrated HR tech systems, that live fully in the cloud. The powerful nexus created here, by integrating HR technology with cloud-first technology allows HR executives to tap on functionality and solutions within a single platform and be able to deliver it all across the organisation, all over the world.

One of the most obvious benefits of integrated HR solutions that are delivered via the cloud has to do with cost reduction as vendors of these systems changed their legacy pricing models to match the disruptive models of the HR tech startups that first brought about the automation of HR functions. However, the real benefit unlocked here is in helping companies become more agile to face a future that has become vastly more uncertain. Global pandemics, climate change, political upheaval, demographic shifts, cultural integration, financial market volatility, and a rapid acceleration of technological progress, makes this the most uncertain future that the world has ever had.

The most powerful weapon companies can use to face this future is a workforce that has the right aptitude, attitude, and skills to adapt to a changing environment. In an environment where speed and agility matter, HR becomes about looking for values like resourcefulness and resilience, while employees need to have access to the right information at the right time, as well as be empowered by having the right skills. Delivering this fluidity across all HR functions is greatly enhanced by using cloud-powered HR technology that brings HR closer to the employee in a positive way and on a mobile-first platform.

However, transforming HR is not without its challenges. The tendency to just deploy technology with an IT mindset is usually what happens and is far from what is needed. Companies and HR departments need to see this exercise as change engineering that requires the co-integration of people and processes together with the technology rollout.

Creating a HR department that delivers its strategic and operational value through systems living on the cloud can be a game-changer for an organisation. Imagine thousands of employees simultaneously acquiring new skills and learning, from bespoke 10-minute micro lessons delivered to their mobiles daily. Or organisations that use technology powered by the cloud to listen to valuable on-the-ground feedback from every employee globally.

The potential for transformational value creation by the HR function is greatly augmented by HR in the cloud, be it deployed through homegrown solutions provider such as Ramssol Group (whose upcoming listing on Bursa speaks volumes about the growth of HR Tech and our local tech ecosystem), or solutions by the likes of Oracle, SAP, etc.

What is clear is that the time for HR to reimagine its own future and consequently the future of the business/enterprise/SMEs – paving the way for it to thrive again in the post COVID-19 era, is all but certain.  

Contributed by: Sherman SS, Consultant – Economics & Finance

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