Cloud computing is the hot topic in todays world. But what exactly is cloud computing? Instead of providing long-winded explanations which seems to be the trend today, let us give examples of cloud computing systems. The best known is Facebook. Other well known cloud computing systems in different areas are Google, Hotmail, Salesforce, Picasa, and many others. The way the internet is growing with the use of smart phones, as well as quicker telecom connections like 3G, we can expect the internet to dominate our future. Companies are rushing to make their products internet ready, but making a product available on the internet does not make it a cloud computing system. Because, cloud computing has a number of unique characteristics.
A distinct feature of cloud computing is that it gives a cost advantage to a customer by being very reasonably priced, or in many cases free, if I don’t like what you have offered me on the cloud, I can move on after paying a months money without any strings attached.
In contrast, in a traditional software licensing model from the moment you buy an application package you get stuck with expensive licensing fees, customisations, annual maintenance contracts, and other never ending costs.
Why HR and the Cloud?
In the last 20 years, HR has re-invented itself. From the mundane activity of IR (industrial relations and labour), HR has elbowed itself into the front of a company’s business radar on par with marketing, finance, administration and other departments. Twenty years ago when HR as is practiced today was in its infancy and Personnel Managers were the norm, a company’s management remembered Personnel Managers only when they had a problem with staff. Until then for management, they were part of the furniture. Today, HR Managers are involved in every stage of a company’s progress and interact with every level of a company’s workforce, from the lowest to the highest.
So, in this rosy picture, is linking the future of HR to cloud computing a huge overkill? Maybe. But we think it is not! Progress is something that has to be embraced or one faces the risk of getting left behind. As Warren Bennis said, “The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment”. HR has a lot of activity which has been e-enabled.
But, a lot of this has not been implemented in a large number of small and middle level companies (SME’s) who form 75 per cent of our country’s market. Why? Because many of the SME’s are of the opinion that HR systems are expensive. For most of them, even having an HR Manager on board is difficult, and having an added HR system to boot is an impossibility in terms of cost. A Zinnov study estimated that there are around 35 million small and medium business units in India today. However, another study indicates that many of them are reluctant to spend on HR systems because of cost.
The advantages of using a cloud computing HR system is an acknowledged fact. You don’t need any infrastructure, you don’t need maintenance, you don’t need storage space, you don’t need extensive training, you don’t need ultra fast connections and you don’t need expensive software. All you need is a simple web browser like Internet Explorer or Google Chrome and you can connect to any cloud system and use all these facilities online.
But how do cloud computing systems help HR? In a SME, the advantages will be enormous. A good cloud computing HR system will e-enable the entire recruitment process. It will give access to anyone in the company, give different levels of access to different people, allow online applications, allow automatic cost comparisons of the best way to recruit, keep a track of the entire recruitment process, give you reminders, and store any information online as well as give you detailed reports and searches. A good HR system, will take over from recruitment, provide a system of induction, employee database and history, performance appraisals, generation of any letters from leave to hiring to compensation, and in some cases, tie in with attendance and payroll. And, if you use the cloud, all this will come in at throwaway prices to free! This will also ensure that the HR Managers do no have to spend time filing out reports and excel sheets on HR activity and instead provide value to the company by ensuring that employees are looked after, motivated, advised, and interacted with.
HR and Cloud Computing
The cloud system has really taken of since 2008 when more and more businesses saw its advantages. One of the early pioneers, salesforce.com, made a large impact on the US and world market, but is considered expensive for the Indian market.
However, the number of products that are expected to be available on the cloud will mushroom. Gartner, one of the world’s largest research companies identified cloud computing as the key growth area in 2010-11.
There are systems that offer the entire enterprise, from marketing, sales, finance, on what they call the SaaS (software as a service model). Saas is a cloud computing model, where you subscribe for products on a monthly basis. We recently followed a linked-in discussion on recruitment software, and found over 100 answers from different countries. Every single one had different software to recommend, but only around 20 per cent of them were on the cloud model.
In the cloud computing models available on the internet, most of the products in recruitment and HR offer trial periods ranging from 14 days to 30 days. Though it is beyond the scope of this article to mention all products, there are a range of cloud computing products which offer HR systems. One, a little on the higher side is Talleo.com which offers the entire enterprise system from marketing to HR and costs around Rs. 5000 per user per month. Catsone.com is another recruitment system with offers recruitment software at a flat fee of around Rs. 1800 per user per month, Zoho.com offers an applicant tracking system at Rs. 500 per user per month. Weballigator.com offers a full fledged recruitment system free for any number of users. Smartrecruiters.com also offers an applicant tracking feature free. Both these systems generate revenue from other optional plug-ins or referrals. All in all, there is a lot to offer in the cloud for HR, and as an opportunity, it is a golden one for HR professionals.
Conclusion
For the SME’s, HR is in danger of becoming a poor relation to other departments. How? A business function be it HR, Finance, or Marketing gains or loses in importance on how strong their contribution to the company is. In this case, the market is the 75 - 90 per cent SME’s (small and medium enterprises) who constitute the major segment of Indian industry. If HR has to gain in importance, and make no mistake, it can, it has to incorporate in-expensive cloud computing systems in the SME’s and concentrate on ‘core’ strengths. Strengths like strategy, motivation, and employee interaction. Unless HR Managers are able to address the lack of HR systems in the SME’s, their importance will continue to decline.
The solution is easy and cost effective. It is a panacea for all parties - the companies, HR professionals and the company’s financial bottom-line. The solution is to adopt cloud computing systems. The Cloud computing systems are perfect for the price sensitive SME sector. All it needs for the HR professionals to adopt it, slowly if necessary, but steadily. The time and place to use cloud computing is now.
As Abraham Lincoln said, “ I walk slowly, but I never walk backward”. There is a future for HR in slowly walking forward with cloud computing systems, and we hope that most do so.
(The writers are co-founders of Truemen, a Six Sigma recruitment consultant firm)