Cloud technology: just when should you take the plunge?
For most HR teams, the benefits of the latest cloud HR software – whether to replace an ageing legacy system or a confusion of spreadsheets – is well established. What isn’t so clear is just how and when you should take the plunge and what sort of support you should expect during the transition period. Should you wait till the new financial, tax or calendar year? Will upcoming legislative, Brexit or ‘Trumpish’ issues play a role and what sort of support should you expect from your incumbent – and soon to be ex – supplier?
There’s something about a new year (calendar or financial) that gets people thinking about what will make a difference to their business. In fact, we always see more enquiries in the run up to the year end and just afterwards.
It’s logical for several reasons – although some are perhaps more historic than current. In the past, budget availability was a big issue. HR software was expensive, and typically most of the costs had to be paid in advance (IT infrastructure, software licences and at least some of the implementation). It made a lot of sense to make purchasing decisions at the beginning of the financial year – often January or April - when annual budget became available, and before anyone had the chance to take it away!
With cloud computing, Software as a Service (SaaS) and the move to subscription pricing, licence and implementation costs have come down and many suppliers now charge subscription fees on a monthly rather than annual basis. There’s not the same pressure on finding a big chunk of money all at once.
Create your own timeline
HR can create a timeline of their own that suits them and ensures the smooth transition of existing business processes and supports new projects. For example, changing an HR system halfway through the holiday year creates an extra level of complexity and confusion that is best avoided.
Introducing a new performance review process along with a new HR system that automates the flow of forms and consolidates the information for reporting is likely to be more effective than starting with a paper-based process and then trying to automate it halfway through the review cycle.
The same is true of payroll. Updating a payroll system in line with the tax year, or the company’s financial year should be considerably easier – and less stress-inducing - than trying to migrate part way through.
Today, the optimum time of year is when it works best for the business – and the team orchestrating the change – but what sort of support can you expect from your current supplier during the transition period as you migrate to a new vendor?
Making the transition
The short answer is that it rather depends on what’s in the contract – and how open your existing system is. We do hear reports of suppliers holding customer data “hostage”.
However, it can be difficult to export data from legacy solutions that weren’t designed with that in mind. Specific code may need to be written which you’ll be expected to pay for.
The important thing is to talk with your existing supplier as soon as possible in the process to identify what needs to be done and who is going to do it. If you have an internal IT team, involve them too. They’ll certainly be able to sense check what’s been proposed, and may even help smooth the path to your new system by writing code to consolidate and clean the data you need to carry across.
It’s also helpful to have a period when you can access both systems so you can check that data has migrated seamlessly. The feasibility of this might have to be negotiated separately if it’s not covered by your original contract. And try and keep this period flexible so that you have more time if you need it.
Moving to a new HR system from spreadsheets has its own challenges. Here it’s important to check how your new vendor will help you. Will they manage data upload for you, or are you on your own? If the latter, what level of technical expertise do you need? Can they provide an easy way to validate the data – and get it into a format the new system will accept?
It’s really common to find that different data sources hold data in different ways. For example, you may list employees as first name/last name in your company directory, but your payroll system insists on last name/first name; or dates can be recorded as dd/mm/yy, dd/mm/yyyy, or even yyyy/mm/dd.
Trying to import data that has a mix of both, will either result in your new HR system rejecting it (the preferred option), or (worst case scenario) accept nonsensical information, which will make your life a nightmare!
There’s plenty of legislation on the horizon, in consultation (like the gender pay gap reporting) or going through the courts (as is the case of whether commission should form part of holiday pay) that may, or may not, play a part in forthcoming software implementation decisions. I’d imagine that most suppliers will be looking to add appropriate functionality to support these legislative changes. However, some of the more urgent drivers we are seeing are:
- End of the contract or forced upgrade by an existing vendor; perhaps following an acquisition or to move the client on to a newer release or a cloud-based system. Given that, with older systems, there is nearly always a cost associated with this, it’s a good reason to review alternatives.
- Brexit and global uncertainty. We’re finding companies are looking to get greater insight into the makeup of their workforce; knowing when visas expire, tracking nationalities, mapping skills and competencies. That’s partly to do with legislative compliance but also about being in a better position to respond to any skills shortages that may come about because of Brexit or other global geopolitical issues.
- Changing business and HR priorities. As companies grow, or look to connect with and engage employees in different ways, many are finding that, quite simply, their current system is no longer fit for purpose.
In conclusion, whilst there may be catalysts and drivers such as the above that influence your timing, I believe that things have changed so much over the last few years that there is no longer a ‘right or, in fact, a ‘wrong’ time to take the tech plunge. Everything today can be completely tailored to match your own specific requirements so the best time is simply when it’s right for you and the business.