Build the Case for HCM Cloud, and make that Case Stick Over Time
As strategic consultants implementing Oracle’s HCM Cloud platform, we at Baker Tilly certainly understand cloud software as a catalyst for change—the opportunity to completely rethink the way HR supports the organization. Clearly, the effectiveness of the implementation will dictate the degree to which expected business outcomes are met. But how are these business outcomes determined, and how are they measured going forward to ensure the organization is realizing value?
Remember the “hamburger paragraph” from elementary school? Well, it turns out many things in life are the same way—a convincing beginning, a meaty middle and a memorable foundational finish. The implementation of HCM cloud is certainly “the meat” in a client’s HCM cloud hamburger. It’s where the rubber hits the road, where the solution is tailored for the client, where change management begins and ultimately drives successful metrics and business outcomes. But a successful transformation also requires a compelling business case to justify the first steps and an enduring governance model to continuously measure and sustain that business case for the organization.
The art of combining a financial return (hard data) with HR effectiveness (soft data) can be difficult to quantify, and frankly, sometimes difficult to swallow
So, let’s hypothesize a situation where an organization has selected Baker Tilly as its consulting partner, with the expectation that their implementation of HCM cloud will be a transformative journey and a true catalyst for change in their organization. We begin with how best to start their journey with a business justification, and then sustain the application and innovation model through governance.
While the legacy of decades of on premise technology often leaves the client with an aging, unsustainable infrastructure, building the business case to move to the cloud can feel a bit scary. The art of combining a financial return (hard data) with HR effectiveness (soft data) can be difficult to quantify, and frankly, sometimes difficult to swallow. Executive stakeholders may not understand or immediately comprehend the HR benefits of moving to the cloud. However, effective HR programs have been shown to deliver far more ROI over time, and actually can be the most significant driver in the business case for moving to the cloud.
On the quantitative side of things, key stakeholders will analyze the hard dollar savings of moving from on premise to the cloud, such as:
• Eliminating HCM servers and maintenance
• HCM server upgrade cost avoidance
• Eliminating HCM application/ software support, maintenance and upgrades
• Reducing third party consulting fees for development, customizations, integrations
• Reducing overhead support costs (patches, , IT overhead, IT chargebacks)
On the qualitative side, organizations will look for a return on leveraging technology for more efficient and effective HR programs. While these savings may seem softer, they are no less valuable. In addition to being a key input to the rationale for investing in HCM cloud, these criteria also establish the method by which they will measure their success—getting the return they expected as they govern and sustain themselves post implementation. The criterion might include:
• Reduction in onboarding time / improving time to productivity
• Reduction in voluntary turnover
• Improvement in strategic workforce planning
• Improved goal-alignment and competitive pay for performance
• Elimination of manual, email, spreadsheet based processes
Established in the business case, these measures form the structure for value realization going forward. For example, if reduction in voluntary turnover is critical to the organization, where does it stand now and what is the target for the future? How does it impact the organization’s profitability? Capturing this now, designing the processes to improve it and building the tools and capabilities to measure it during implementation will enhance the governance framework and drive the organization toward successful outcomes.
After the winning business case has driven the selection of HCM cloud and the implementation is underway, the change management methodology begins to focus on governance. This is where an organization builds the new muscles required to sustain themselves in the cloud environment and realize the benefits and value that they are banking on. As a part of our overall change management methodology, Baker Tilly takes an approach to governance that drives successful outcomes from organizational alignment, ongoing solution support, maintenance and enhancement. We strongly emphasize this because we often see it as a common misstep in the marketplace—where organizations have moved to the cloud but were not properly equipped to sustain themselves post implementation. Often times in these cases, we are called in to get them back on track through optimization and the design of a strong governance model.
There are several factors that dictate how the post go-live support organization should be structured. Our approach focuses on defining four key dimensions of governance with the organization and the interplay between them.
• Structure: Create a framework for continuous assessment of the solution to the organization’s needs
• Solution support: Build end to end support processes to get the most out of the investment and the continuous R&D reflected in multiple updates per year
• Maintenance: Provide tools and templates to support continued maintenance and upgrades
• Enhancement: Help to build the ongoing relationship with the client’s technology vendor (Oracle) to play an active role in the HCM cloud ecosystem and ensure innovation for the future
In summary, we’ve seen organizations succeed in the HCM cloud because we’ve built a business case that establishes success measures and alignment to business outcomes. This leads to a tailored implementation, supported by a foundational governance model that ensures continued support and innovation.