Enabling Technology

Cloud Considerations

If you haven’t move to the cloud yet, here are four reasons to make the investment

By Tom Hammond

As HR leaders look to replace their technology, many will consider updating their legacy systems with a cloud- based platform, accessed via the Internet rather than a local server. When deciding between on-premise and cloud-based technologies, there are key differences that business owners should explore. Here’s a closer look at four areas and why some companies are choosing cloud- based technologies for their core HR system.

  1. Cost. According to the 2014 KPMG’s Cloud Survey Report, the main reason executives leverage cloud technology is to drive cost efficiencies. Servers can be expensive to purchase and maintain, requiring dedicated, climate-controlled space and experienced IT staff to troubleshoot problems. Locally hosted platforms may require extended system downtime and staff hours to deploy a new version, software patches, or server updates. Cloud-based applications can help businesses control costs by minimizing hardware purchases, IT staff time, and large, upfront software investments.
  1. Scalability. Cloud services have been considered one of the top 10 strategic technology trends for 2015 that will have a significant impact on organizations over the next three years. Gartner also says, “cloud is the new style of elastically scalable, self-service computing, and both internal applications and external applications will be built on this new style.” As businesses see greater success or change over the years that can come with M&A activity, scalability becomes increasingly important.

Hosting systems locally can be difficult to scale up or down if the need for individual licenses changes, whereas data storage and user access is easily scalable in the cloud. Changes can be made by migrating to a new tier or adding on a specific module for increased functionality.

  1. Mobility. Many legacy systems don’t offer the same flexibility as cloud technology for mobile access, and it can be harder for these systems to adapt to new hardware innovations. Users of cloud-based systems have the advantage of completing tasks or accessing information from any device connected to the Internet. Many of the challenges of administering software -from handling upgrades to dealing with user permissions -can be managed anywhere, which isn’t the case for some on- premise systems.
  1. Security. Physical access to servers could potentially give strangers access to proprietary, sensitive, personal, and financial data. Depending on an organization’s geographic location, companies could also be at risk of fires, floods, or other natural disasters that can damage and interrupt business as usual. With cloud technology, system backups occur automatically, and everything is stored off-site on servers maintained by a data service center with a strong set of controls in place to protect the computer software and data. According to the Small and Midsize Business Cloud Trust Study, 94 percent of small business owners have experienced security benefits in the cloud that they didn’t previously have with their on- premises service, such as up-to-date systems and antivirus protection, and spam email management.

For business leaders who are considering updating their HR systems, now may be the right time to consider moving to the cloud. From cost savings to increased flexibility, cloud technologies offer advantages to more easily achieve HR goals and positively impact the bottom line.


Tom Hammond is Paychex’s senior director of product and program management.

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