HR Services in the Cloud: Roles Don’t Need to Change, but Competencies Do

December 10, 2014 Ray Rivera


For a lot of organizations, the deployment and integration of cloud solutions are at the heart of HR transformation efforts. One of the outcomes of a successful cloud-enabled HR transformation is a radical change in HR’s administrative role, putting HR in the position of both a consumer and provider of services.

Such a reallocation of tasks aims to make HR operations leaner and nimbler, freeing up resources that can otherwise be devoted to strategic HR planning. A familiar example is HR shared services, wherein HR services are managed and delivered using computing resources that are shared among other business functions. A successful HR shared services deployment can result in enterprise-wide efficiency gains in the HR function. Yet there is still no free lunch when it comes to the competencies that make HR departments run effectively.

For some organizations, automation of administrative tasks and improved centralization of the HR function has shifted resources around so as to enable HR to become a better strategic partner with the business. Yet necessary competencies usually do not remain latent within HR, and therefore need to be acquired.

Share and share unalike

Other experiences with HR transformation suggest that a high-level commitment to equipping HR staff with new competencies is critical for successful transformation. Yet the perception among many HR professionals is that shared services solutions actually deskill HR staff, whose tacit knowledge of the organization cannot be substituted by any amount of technology investment.

In other cases, unnecessary reductions in staff may follow a shared services deployment, resulting in a skills shortage of key HR personnel and reduced ability to achieve meaningful efficiency gains, both of which severely inhibit strategic HR activities.

Another similar risk involves allocating wrong competencies to the wrong roles. In such a case, a shared services implementation creates a small number of HR staff that facilitate the implementation, and are perceived as the insiders. They become a new set of technocratic HR elite whose primary concern is maintaining a complex information system that also happens to collect HR data.

In all these cases, skills unrelated to effective HR become elevated as attention shifts to IT systems administration, rather than the people it serves, which in turn decreases the perceived value of HR skills and those having the skills. The result: an HR implementation that falls well short of its potential, reaching only a few departments or regions, or delivering partially satisfactory services across the enterprise.

Help yourself the way you help your people

HR roles need not be supplanted by organizational change initiatives, and indeed it is often not advisable to do so. Rather, new competencies ought to be added to already proven ones. Instead of segregating, and in some cases relegating HR staff according to inflexible roles, new HR forms should emerge that integrate competencies of other functions, such as finance and operations.

Streamlined or transformed service delivery represents an opportunity for adapting the roles for HR staff to facilitate even greater involvement in lines of business, bringing HR closer to the value that is created on the floor, and envisioned in the boardroom.

An earlier version of this blog entry appeared in SAP Business Trends



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