Australia's HR function is shifting to the Cloud

by External21 Dec 2011

Australian businesses are increasingly turning to the cloud to outsource their HR systems, according to a presentation made in Sydney last month by a leading technology provider.

Visiting the Asia Pacific region in November was NorthgateArinso's CEO Mike Ettling. He said, "Globally the GFC and subsequent economic uncertainty has prompted businesses big and small in every market to look for efficiencies, and innovative and scalable deployment options for HR technology. There's growing interest in cloud-based HR solutions: especially as this option becomes more accessible, reliable and secure year on year."

NorthgateArinso's Australia/NZ MD David Page added, "While Australia is also subject to this global business climate, locally our two speed economy presents additional challenges for HR functions. Australia is facing an increasing talent acquisition and retention problem. Cloud-based (HR SaaS) solutions can help address that by allowing workforce management solutions to be deployed rapidly around the globe, providing organisations with the tools for every talent task.

"Cloud-based services such as Software as a Service (SaaS) like NorthgateArinso's Preceda and euHReka applications provide managers, especially HR executives, with online intelligence and analytics to manage all HR functions, from recruitment to termination," Page said.

More than cost driven
Page added: "Some suggest that the cloud shift is simply cost driven. Clearly cost is a factor: that is a feature of business. However it's clearly not the prime mover. Globally there is increased interest in working virtually across business functions and across geographies. There is greater trust in online technology and, more importantly, its usability. This 'virtuality' is finding growing support across the HR world because its implications for the HR function specifically, and business generally, is simply massive.

"This online shift is being prompted by globalisation. In turn, this is spurring businesses to standardise and align processes world-wide while also improving self service and the automation of what were previously manual tasks."

Globalisation does not equate to centralisation
Page added, "NorthgateArinso notes those companies that are successfully integrating this shift understand the importance of their local business environments. The old saying 'think global - act local' still holds: nowadays it's called thinking 'glocally'.

"The drawback to globalisation, especially in the people management space, has always been a 'one size fits all' approach.

"'Glocal' thinking means being wary of SaaS solutions which cannot be tailored to account for local differences. Within the context of a global approach to HRO, this flexibility is vital. This is where NorthgateArinso's Preceda and euHReka applications excel. They provide HR executives, with online intelligence and analytics which can be managed, within a coordinated framework, to reflect national or local differences."

HR 3.0
This new way, or wave, of thinking about HRO has been called HR 3.0.

A brief view of earlier models taken from NorthgateArinso's website blog notes:

  • HR 1.0 was "..large scale outsourcing deals that predominantly consisted of 'lift and shift' approaches to existing technology and people."
  • HR 2.0 was "... a move to achieving transformation prior to shifting responsibility for delivering the services to the provider. The challenge the customer faced was the large number of internal resources that were required to help redesign and align to standardised, best practice processes. Trying to get many countries across all regions aligned to standard processes required extensive engagement to gain agreement to move forward."
  • "HR 3.0, or hybrid HR as it's also called, is best defined by the benefits to the business and to the customer which are now more effectively delivered via online technology. It introduces greater choice in the right service delivery model, at the right total cost of ownership, while constantly taking advantage of new innovations in software and online technology," Page said.

"For NorthgateArinso the real online heart of HR 3.0 is our world class ERP backbone. euHReka provides customers with a multi-tenant solution with the option of a shared or dedicated client architecture - all powered by SAP HCM."

Page concluded by noting, "At the end of the day what our customers want to know is: can NorthgateArinso continually provide them with innovative technologies, effective outsourcing solutions, and strategic consulting practices?  And our reply is: 'Yes we can'."


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