Cloud is Good, ERP is Bad

That’s the conclusion you might arrive at if you’ve followed HR Technology publications in the last year or so. Ever since Workday came onto the market, SAP bought Successfactors, Oracle acquired Taleo and SalesForce introduced Work.com, there’s been a lot of emphasis on the fact that HR in the 21st century must be build on cloud – and HR ERP is dead.

It seems that only HR is hit by this “strictly cloud” virus. I haven’t observed it (yet) in other business areas, where ERP still has a lot of klout. So what’s going on, and why is it happening to HR?

I’m a bit old school – where I come from, when we need new functionality, we create an overview of functional requirements first, technology requirements second. And we look closely at what we already have and how to create a solution that adds value. We don’t start with: it must be cloud.

Besides, many companies, subject to complex labour agreements and local regulations, have invested heavily in systems that are tailored to their needs. They are not ready to rip and replace that investment. In parts of the world, like Europe, there are many HR factors that influence payroll on a monthly base which means your HR solution must support all of that. And of course, all those rules and regulations change frequently, so your vendor better have a good support and maintenance system in place that aids in being compliant.

So I am proposing a more balanced view: yes, HR in the cloud can be great, and yes, HR ERP has its benefits too. It all depends on what you need, and on what you already have (invested in). In fact, a hybrid might bring you the best value for money by protecting previous investments while adding new HR services.

After all, this is HR we are talking about – absolutely necessary but certainly not an area where your employees should spend most of their time in awe of the system. Let’s be reasonable: an HR solution must work, it must be reliable and flawless and that’s about it.

Over the next few weeks, I’ll be following up on this theme with several posts on cloud and ERP. If you want to be heard, or would like to add to the discussion, you’re invited to leave a comment or write a guest post – l’d welcome your thoughts!