77 percent of organisations support cloud HCM and finance

77 percent of organisations support cloud HCM and finance

Over three-quarters of IT decision-makers support the idea of moving financial tasks and Human Capital Management (HCM) into the cloud. That's one of the insights from a recent Computing Research report on organisations' cloud activities and ambitions.

The survey reveals that organisations of every size and type are turning to the cloud to deliver key business processes and extend traditional activities or legacy systems. Cloud's promise of greater agility and scalability, reduced overheads, efficiency gains, and insights into customer behaviour can secure organisations a competitive advantage.

But these benefits are not just found in front-office, customer-facing operations; they are increasingly being applied to the back office too. Businesses are seeing the benefits of integrating their Finance, HCM (HR), and planning applications into a cloud-based Enterprise Resource Planning (ERP) platform.

Easy access to real-time data within a Software-as-a-Service (SaaS) solution means that IT and data managers can now plan, execute, and analyse within a single cloud-based system, promising the ability to drive insights, efficiency, and profitability across the business.

Forward-looking back office

Computing found that 77 percent of IT leaders say they support moving Finance functions, such as Payroll, Payments, or Accounts into the cloud, along with their HCM capabilities.

The poll was conducted among 150 senior IT decision-makers in enterprises across the UK economy, notably in professional sectors such as business services, property, law, and accountancy, together with technology, manufacturing, engineering, and pharmaceuticals - all markets that demand insights that are combined with trust, security, and reliability.

An integrated, cloud-based Finance or HCM platform can foster a business and workplace environment where insights happen in real time, agility is the norm, and global resources can be managed more easily - at least that's the theory.

However, Computing found that many enterprises are still very much embarking on their journeys into the cloud. While more than one-third of respondents (36 percent) already host HCM in the cloud, a further 38 percent are planning to do so in the future. More than five percent outsource this function, while just under 15 percent plan to keep it on-premises. The remaining six percent of organisations said the question was not applicable to their organisations.

Similar pictures emerged across a range of Finance functions. Just over 32 percent already host Payroll in the cloud, 26 percent plan to move it there, 22 percent outsource employee payments, and 17 percent plan to keep them on premises.

One-third of respondents host Accounting in the cloud, one third are planning the move, and 29 percent are keeping it on premises. Few outsource their accounts: just four percent.

The scenario is almost identical for Payments: just over one-third (34 percent) host this function in the cloud, 36 percent are planning to do so, and 22 percent intend to keep it within the organisation. Six percent outsource it.

Financial Planning sees an even split: 30 percent of respondents are already in the cloud, 30 percent are planning the move, and 30 percent are keeping the function on premises. Just four percent outsource the work.

Migration state-of-play

Overall, a picture emerges of one-third of leading organisations that are in the vanguard of a shift to the cloud, a significant group of followers, and a third group that remains devoted to on-premises or outsourced options. The latter seemingly prefers to strip non-mission-critical functions out of the business completely, or wants the perceived control of keeping it within the organisation.

So from IT leaders' responses, what are their top five reasons for seeing the cloud as a risk or simply not moving to a hosted platform? Security was cited by 42 percent of respondents, migration complexity by 41 percent, compliance by 40 percent, low strategic priority by 33 percent, and complications due to legacy hardware by 32 percent.

Also mentioned were risk aversion (30 percent), cost (24 percent), lack of internal skills (17 percent), and simply not seeing the need (14 percent).

Migration success rates

However, among those that have already moved operations to the cloud, 75 percent have achieved cost predictability either "extremely successfully" or "very successfully", 71 percent have achieved compliance with the same levels of success, 64 percent have established data security notably well, and 63 percent have realised cost reductions at that level.

Respondents citing poor experiences in these areas - either being completely unsuccessful or achieving disappointing results - were in single digits. So it seems that fears are not backed by strong evidence.

This may be why, when asked the question, "On a scale of 1 to 5 (with ‘1' being ‘strongly disagree' and ‘5' being ‘strongly agree') to what extent do you agree with the statement, ‘The advantages of migrating financial and HCM applications to the cloud outweigh the perceived disadvantages?' over three-quarters (76 percent) of respondents picked either ‘4' (47 percent) or ‘5' (29 percent). No respondents chose ‘1' and less than seven percent selected ‘2'.

This article is from Computing's Cloud ERP Spotlight, hosted in association with Workday.



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