Benefits of Cloud over On-Premise HCM Software

August 19, 2021


You would not think that in 2021 we get asked to build a business case for purchasing a Cloud based HCM application, but we often do.   HCM systems have been in the Cloud since 2003, with the first cloud release of UltiPro and they went mainstream in 2007 with the marketing power of Workday.

Today, “The Cloud”… is everywhere (literally!) An important decision when selecting HCM technology is: Do we want our software in the Cloud or On-premise?

Let’s start with a basic, generally accepted definition of each:

  • Cloud software is hosted on the provider’s server, accessible from your web browser
  • On-premise software is installed on your company’s server

What are the primary benefits of a Cloud HCM vs On-premise HCM?

  • Connectivity – If you have an internet connection and a web browser (and credentials), you can access your Cloud HCM from anywhere, on any device, at any time.
  • Cost – A huge benefit is the elimination of capital expenses necessary for an On-premise solution. No equipment to purchase, install and maintain. Upfront costs are low, and they are predictable; generally, Per Employee/Per Month (PEPM). An often-overlooked cost savings is not having increased energy bills to support your equipment.
  • Deployment – Get your HCM up and running faster. Without installing and configuring the HCM software, server(s), networks, database(s) and more, you will be using your new HCM in less time.
  • Headcount – A Cloud HCM requires fewer people-resources to manage. No more Database Administrators, Network or Security Administrators. High-priced consultants to assist with implementation or upgrades are a thing of the past.
  • Maintenance – There are no HCM software upgrades or tax and regulatory updates to install. In addition, no server or database backups/upgrades/patches. All you need to do is keep your browser updated across devices.
  • Scalability – Quickly adapt to your company’s needs. Merger or acquisition? Expanding globally? No problem; just let your Cloud HCM provider know and they will take care of any additional technological resources necessary.
  • Security – We live in a world of hacking, ransomware and more, regardless of where the software resides. Implementing the necessary security measures is costly. Your Cloud HCM provider handles everything, and in many cases, providing security measures that would be out of your price range.

Of course, there are some drawbacks to a Cloud HCM. Most notably, if there is a mass internet outage (or your ISP is down), your HCM could be inaccessible for a period of time. And there are limited customization options. Configurability is provided, but complex and unique requirements may be difficult to meet.

These are just some of the benefits of a Cloud HCM. A thorough evaluation is always encouraged for a purchase of this magnitude. If you are considering moving your HCM to the Cloud, HRchitect is widely considered one of the best strategic technology consulting firms and is your best insurance policy for a successful HCM evaluation/selectionReach out to us today!