Core HR, Provider Engagement, Provider Selection
How HR Tech Providers Can Help Clear Up the Storm in the Cloud
We’re not meteorologists here at Voice of HR, but we’re going to be spending a lot of time over the next few weeks thinking about the cloud. In an ongoing series, IA’s Mark Stelzner and I will address the problems with the status quo of cloud technology. Mark will look at the cloud from the perspective of HR tech buyers, while my focus will be on what HR tech providers need to consider when they sell, deliver and support their solutions.
Unfortunately, the promises of cloud-based tech just haven’t come true. While there are quite a few reasons for this — on both sides of the equation — providers need to recognize something important: Even though they’re offering a revolutionary technology, they haven’t even begun to revolutionize how they sell and implement it. We’ve moved past the days of on-premise technology, but providers’ methods for guidance and implementation are still stuck in the past.
Help Buyers Understand the Difference Between On-Premise and Cloud
If you’ve worked for technology companies for many years, you remember the days when every company used all on-premise software. But your buyers probably don’t know the intricate details about technology implementations, and they definitely can’t quickly tick off all the ways that using on-premise software is different than working in the cloud. And, another twist: If your customers were born in the 1990s (!), they have pretty much always lived in a world of cloud technology.
But here’s the thing. Providers are not guiding their clients through understanding the differences between on-premise and cloud. If you aren’t sure what’s so different (and why it matters), here’s a primer:
- For years, companies bought software and managed it on-premise. Every time they needed to make a change to the code, manage the system and servers, make an upgrade or customizations, or tweak the security settings, they relied on their in-house IT team. They also relied on their software provider to release compliance packages to keep the system up-to-date. This process is challenging due to the amount of regression testing that needs to take place, to ensure that the customizations are not impacted by the new release.
- Now, when companies use cloud-based software, those armies of in-house IT people are a thing of the past. Instead, the provider manages the data center where the application is hosted, provides standard features, rolls out upgrades, and makes sure data is secured. On the client side, HR or Shared Services and IT will manage the governance of the system, but most of the technical work is done by the provider.
I really feel like providers have really failed their clients in this area. Providers really need to be guides, consulting with their clients to help them understand the changes that will be necessary to move to the cloud. It isn’t about just putting in the pretty new system, but transforming the client’s processes and methodologies to manage the cloud. All too often, my team at IA is called in because the client didn’t have that kind of guidance or insight.
Cloud-based technology offers a variety of conveniences that are a marked improvement over the on-premise tech of the past. But there’s a misconception around cloud-based tech — that it’s as easy to use as snapping a finger.
This misconception is largely the fault of providers. I’ve seen people say that some providers are just trying to make the sale, but I don’t think it’s that; I just think we haven’t yet begun to appreciate the challenges of implementation for the cloud.
Cloud or not, implementing an HR system is always going to be difficult. But cloud-based systems work in a fundamentally different manner from on-premise systems. Clients are using a system with fundamentally less customization, and their IT departments will service cloud-based software very differently than they would with an on-premise system. Clients will have to lean on providers for support much more than they have in the past.
So providers need to take responsibility. Give clients information on best practices for workflows and data conversion. Help organizations look at their foundation data and determine whether they’re efficiently built and able to withstand the workflows in a cloud-based system.
Maybe one day we’ll be able to flip a switch and move everything to the cloud without much thought. But I doubt it. Like it or not, change management isn’t going anywhere. But if you help your client navigate that change management in a transparent manner, you’ll have a much more positive relationship with them.
Remember That It’s Software as a ‘Service’
Just as providers need to change their sales process, they also need to radically alter how they approach their fee structure when it comes to basic training and implementation. There’s no way to sugarcoat this, so I’ll just say it: Too many providers are nickel-and-diming their clients. It’s called “software as a service” for a reason.
For example, many providers charge for change management and basic training. Is there any reason why that shouldn’t be included in an implementation fee? Perhaps you’ll have to raise your prices, but change management (and, hello, training!) should be part of any standard implementation. After all, cloud-based technology puts more responsibility in the provider’s hands. Clients don’t have to rely on their IT department to code new processes. This is the provider’s job.
A few providers have differentiated themselves with free training, something I believe other tech companies should emulate. When any employee of a client needs help with the product, the provider is a phone call or click away.
Providers would be better off building their service models in a tiered fashion instead of offering a la carte services. Detail all the services you’ll provide for each level in the model. Clients need to understand what they’re getting and what the tradeoffs are if they choose the lowest level. Regardless of the level, change management and training should be included. That way they’ll be able to successfully navigate the difficult transition to the cloud — and perhaps give you the referral business you need to continue to grow.