9 technical challenges of cloud-based HR systems

1. New security burdens

Like virtually all of the software that's used to manage the employee lifecycle, cloud-based HR systems use sensitive employee data as part of the service. Many believe the use of public cloud services creates compliance liabilities and security vulnerabilities. "Dealing with SaaS-based HR platforms is really challenging," said Hila Bazar, vice president of global HR at Glassbox, a customer experience service. Glassbox has found it more difficult to control the security level and use of employee data with the same granularity of access control as it could when the data is stored on local servers. Moreover, the new GDPR regulations are tightening the compliance requirements, which adds additional burdens to keep track of.

Because of these issues, it's critical to research and choose vendors that comply with all your regulation needs and that will protect your sensitive data. Ensure that they are thorough in cybersecurity before stepping into the implementation phase. Then, work closely with your CTO, DevOps and IT functions to secure and maintain the systems. "Do not take anything for granted," Bazar cautioned.

2. Balancing security and ease of use

Another aspect of the security issue relates to the consumerization of HR. Consumer-grade interfaces may not have the appropriate level of security, which means IT may need to add that. However, this can undermine the ease of use since additional security layers add complexity with the attendant levels of approvals and workflows. Raghavan Menon, CTO of Espresa, an employee benefits program automation platform, recommended looking for vendors that address this challenge. Applications that integrate authorization into the UI as part of the workflow can improve security and user experience, he said.

3. Large number of vendors

HR typically deals with many cloud-based HR vendors to provide various employee services. Each one can bring its own data model. IT, working with HR managers, must also ensure that each service is granted fine-grained access to the appropriate data required for a given program. Conversely, the HR department should work with IT to determine a permissioning system that uses employee roles to make it easier to manage access to cloud-based HR services and data. There needs to be explicit support for vendor roles in the platform with data models to tie them all together with company and employee roles, Menon said.

4. Dramatically changing usage patterns

Scaling can be a major challenge. There is a wide variation in compute loads that cloud-based HR systems must support. For example, the average system load for a 2,000-person company might be 100 page views per hour. But the peak can be as high as 8,000 page views per minute at times like the end of the month, Menon said.

One good strategy is adopting a cloud-based HR system that can scale up and down dynamically to meet these changing workloads. IT and HR managers need to think about scaling not only the service, but data management, authentication and permissioning infrastructure connected to the service as well.

5. Keeping up with integrations

The cloud makes it easy to add various HR services on demand. Each new service also dramatically drives the need for integrating it into all the other services required for a particular workflow. The number of separate HR systems that need to be maintained can range anywhere from 10 to 100, and managing all the integrations and permissions consistently across all those systems can be quite difficult, said Anup Yanamandra, chief product officer at Betterworks Systems, an employee engagement and development service.

Where possible, try and centralize these integrations in a common platform. This dramatically reduces the number of new integrations required when adding new services.

6. Customizing cloud services

"There is no one-size-fits-all cloud HR solution," said Chris Schaaf, managing director of the HR portfolio at Accenture. Accenture's IT organization is deploying capabilities that focus on user need, experience and engagement, and capabilities that are integrated and seamless, enabling users to do their best work wherever they are and on whatever device they use.

Any kind of HR platform a company seeks out shouldn't be so complicated as to require extensive end-user training, Schaaf said. A sleek, visual design, mobile capabilities and real-time features also encourage higher adoption rates.

7. Scalability and flexibility testing

A key best practice is to outline to vendors how your organization operates, identify potential risk points and then work together to prevent and fix.

IT and HR should work with vendors to test out the scalability and flexibility of HR cloud services in their own organizations, rather than taking vendor claims at face value. There are a lot of factors that can interfere with scalability. Also, it's important to ensure that a particular service can be adapted to meet different HR processes.

"A key best practice is to outline to vendors how your organization operates, identify potential risk points and then work together to prevent and fix," Schaaf said. For instance, Accenture uses ServiceNow to provide a guided leave of absence service to its employees. He said that ServiceNow provides an open client framework to easily tailor the experience with standard templates and workflows providing flexibility.

8. New tech support burdens

Cloud-based HR systems can make it easy to add a new service. But the next step lies in providing the technical support that enables employees to use these seamlessly. In order for things to go smoothly in the long run, IT needs to work with HR teams to ensure that internal support is considered when adopting new cloud services, which is often taken for granted, said Egan Cheung, vice president of product at Achievers, an employee rewards service. Otherwise, HR runs the risk of being the tech facilitator for the cloud services it provides to employees. This can cause major technical challenges and be very overwhelming to IT departments that have to figure out whether a problem is caused by a cloud service or another IT service. One thing that can help is a SaaS product providing customer support during and after deployment that includes a process of working with internal IT support staff to resolve problems that span services.

HR professionals are extremely busy, so they need a platform that seamlessly integrates with other programs, is easy to use and requires little maintenance. To this end, HR departments with little IT support should seek a cloud-based system that includes full, end-to-end support for implementation of the program, all the way through to help with data management.

9. Be prepared for data inundation

When companies begin implementing a cloud-based HR tool, they'll typically notice a huge spike in the amount of data they're able to access. This is a good thing, since the data will ideally be used to inform the company's HR strategy. But it can be overwhelming, especially if HR professionals aren't analytically inclined. "They'll first need to set up a system to make sure the data is structured, informative and actionable, or else they'll feel swamped and the data will be underutilized," Cheung said.

The cloud can make it easier to access raw data in ways that follow the natural path promoted by a particular cloud service. However, more work is required to access, understand and share this data in a way that benefits HR managers' unique challenges. A big part of the problem is that meaningful data science often depends on orchestrating data from multiple cloud services and internal data sources. Look for a tool that can be set up to calculate information on ROI and metrics that are meaningful to the individual business. HR professionals shouldn't have to number-crunch on their own.