In the last decade, there has been a major shift in IT operations. Starting in the late 90s, companies optimized their IT budget by shifting personnel costs to project costs via outsourcing. Furthermore, decisions of “buy vs. build” often were made in favor of building the software. During this time, standard software often did not match the companies’ demands, and hence they preferred a custom solution.
The outsourcing and custom-tailored solutions approach of the past is now becoming a legacy of many companies. Thus, IT is sitting on outdated solutions that are either expensive to maintain or are not maintained at all. Upgrade projects often fail since they do not offer additional benefits to the business.
Earlier, IT was more focused on internal systems and developing custom solutions – or managing outsourced teams. Being faced with fast-paced business environments and CEOs demanding transparency and control over business processes, CIOs mandate is becoming more strategic.
Performing this shift in responsibilities, CIOs must also balance and reorganize their financial and human resources to cater for more consultative workloads. Cloud software can facilitate this shift as the operations, maintenance, and support responsibilities move to specialists, which are rented in the sense of software-as-a-service (SaaS). This has led to a drastic increase in the sales of cloud products.
Research firm Gartner, for instance, expects the public cloud services market this year to grow 16.5% from 2016, hitting $204 billion in global worldwide revenue. Beyond that, Gartner expects the market to grow 17.3% next year, before easing in 2018.
On the contrary, seeing such a growth the adoption for cloud is still low. Let us try and understand why?
Understand the difference between “Real & Hyped/Dummy Cloud”
Firstly, no business wants to get caught up in the hype of a product and invest in something that they do not need. There have been number of different technologies that have hit the market in recent years that are making businesses try to figure out what the true value to their company before adopting. It is very well possible that the numbers in case of cloud call it as “Hype” and people who have used this know the reality of how far the output is from the truth. Many experts have touted the numerous benefits that companies will experience by implementing the technology, but a recent report shows that the actual adoption rate is below where many believe it should be.
“Cloud knowledge is minimal”
Secondly, it seems that there is still a substantial lack of awareness and understanding regarding cloud hosting services. A recent survey that was carried out by ‘blueocean’, a market intelligence firm, has revealed that consumer awareness and knowledge of cloud hosting services is still rather minimal with corporations remaining the most likely to adopt cloud computing. It’s a rat race wherein no one seems to be aware where they are heading to however they are just following the crowd WRT the benefits associated. On an individual level, cloud hosting services are still not being widely utilized despite their benefits. The adoption levels of cloud computing services, such as email, social networking and internet telephony is over 80% today, however most users do not see these as cloud computing services. There have been concerns over high upfront cost and associated risks. As per Microsoft City Net research, half of Asian cities surveyed pointing to upfront costs as the main reason for not deploying cloud more widely. More than 60% of respondents also pointed to data security as the primary reason for not being able to shift to cloud.
Laid back approach for Change Management
There’s a graveyard full of failed software systems projects, some of which failed because changes weren’t well managed. Many organizations have been replacing their expensive ERP and HRIS software with a new HR Technology solution. But too many have failed to understand the importance of change management and to invest in it adequately. HR can use change management tactics to help people understand the Software’s purpose and the value it will add to the organization. The change management plan enables HR to secure stakeholders’ buy-in, and clarify HR staff members’ roles and responsibilities throughout the change process — from the software’s implementation, to its adoption and beyond.
It’s important for companies and key stakeholders to think not only about potential value and risk, but also about opportunity costs, when considering cloud-based HR software. “When we make a decision to switch to Cloud HR, one locks itself into future costs and future capabilities, when we are not choosing something like this, we are locking out of that option”
“We have to think, what’s going to make us better five years from now, and tomorrow?” What say?