Business Transformation

Cloud based HR System Implementation – Operating Model Considerations for Success

The role of cloud in enabling the Digital Transformation of Enterprises has been gaining significant traction and the trend is expected to grow in the future, as reflected in the multiple forecasts for cloud services. However, the realization of promised benefits from cloud to call it a successful implementation could be a long journey fraught with challenges and takes multiple things to get there. One of them being, the Operating Model to support the cloud implementation post go-live, both from business and technology support standpoint.

Here, we try to throw light on some important prescriptions for redesigning the business and technology support operations to minimize the challenges post go-live. These prescriptions have been identified based on our experience in assessing the operating model of HR support operations for a financial services company, which embarked on an HR transformation journey led by movement of HRMS from on premise to Cloud. Nevertheless, the prescriptions could be applied to any major technology implementation scenario due to underlying similarity of the nature of challenges/issues.

Challenges in implementation of cloud-based HR system:

• Stakeholder Alignment

  Truth be told - Operating model redesign could involve restructuring of teams which are driven by the organizational dynamics and politics. There is no denying that. Hence it is critical that all the stakeholders are on-boarded and fully aligned to the transformation journey and its objectives at the outset. Failure to do so could result in avoidable obstacles, sub-optimal restructuring, decisions on the placement of skills driven by vested interests rather than program objectives / business case, etc. The decision makers for cloud implementation for HR should try to get the buy-in of all the key stakeholders from existing support operations while planning for implementation to avoid stakeholder alignment issues later.

• Current State Discovery

  All variations of the existing processes and activities performed therein should be captured while doing the detailed current state discovery as part of requirements workshops. There are lot of data admin activities such as manual updates or bulk uploads which might be performed in pockets in different teams within the Business and Technology support operations. Such seemingly simple routine activities are prone to be missed and hence the redesigned operating model would also miss them in terms of the impact of the cloud implementation on an activity, who will perform it post go-live, etc. This could lead to major issues and escalations from the affected end-users post go-live. Possible causes of such misses could simply be that the support personnel executing these activities were not part of the requirements workshops or support personnel did not articulate these activities and standard operating procedures are not up-to-date. Advocates of greenfield approach towards implementation need to be mindful of such ground realities.

• Effort Baselining

  If the current support operations do not have a reliable baseline of their effort in terms of transaction volumes and actual time spent, then making a thorough grounds-up assessment of the capacity implications of cloud implementation on the support operations would be difficult. This eventually impacts the realisation of business case for cloud implementation. While achieving 100% accuracy of capacity forecast to support cloud implementation may not be practically possible, having a fairly empirical estimate of the current effort definitely helps in making realistic capacity forecast.

• Technology Changes

  Cloud-based HR systems bring host of changes in terms of its maintenance. For instance, the migration of fixes to production post-implementation as part of release management have to be done manually. This additional effort has to be absorbed somewhere in the support operations. Similarly, with cloud implementation, clients may not have complete control/leeway on planning to apply periodic product patches that are released by the product vendor. All such changes would require necessary changes in the IT controls framework and audit procedures. The effort for such activities may have to be earmarked as part capacity forecast to redesign the operating model.

Realizing the benefits of cloud systems for HR, or any major implementation for that matter, is not easy. The above pointers could reduce some of the challenges in realizing the benefits or help anticipate the challenges to develop a more realistic business case for better decision making while planning.