Andy Campbell
HCM strategy director at Oracle

Companies realise that cloud-based HR systems are the way of the future, but some believe that such systems are impossible to install because of security and data protection issues.

Research by Oracle and IBM showed that of over 100 senior HR executives from across the globe, 70 per cent saw the benefits of cloud-based HR systems. The number one reason was ease and speed of implementation, followed by the capacity to add new features and the ability to align with best practices.

They appreciated that cloud-based systems are quicker to implement, because the basic software to allow processes such as performance reviews are already built in, and only need tweaking to suit the customer's requirements, rather than specific software having to be written for each customer.

However, most of those surveyed has significant concerns, mainly about data security (61 per cent) confidentiality (60 per cent) and data protection regulation (54 per cent) which varies significantly between countries.

But the big surprise was that these concerns actually rose amongst those with experience of cloud-based systems. Of these, 74 per cent had data security concerns, 63 per cent were concerned about confidentiality and 57 per cent were worried about data protection legislation.

"This was a total surprise, says Andy Campbell, HCM strategy director at Oracle. But further questioning revealed that users took the concerns more seriously because they had had to tackle them during the implementation of the systems. "They had addressed the issues, but generally wished that they had carried out more work to deal with them earlier on in the project." says Campbell. "Nevertheless they carried on and found that the system worked."

Luci Love, head of shared services in the HR department at natural gas and production company BG Group, who oversaw transition to a cloud-based system driven by Oracle Fusion software, says: "Security is a big driver for me. The data is now stored on a cloud but it is more secure there. We have more security options and we can control exactly who has access to the data."

BG found that data protection regulations were an issue - in Norway for instance, some data is not allowed to leave the country, while some is, so part of BG's Norway data is stored in the cloud, while some remains in Norway. "This was something that we had to work around but it did not interfere with the final implementation. It shows there are ways of addressing these concerns," says Love.

In the end, BG found the new HR platform easier and more intuitive for HR staff to use than the previous SAP-based technology, and the project will pay for itself.

It seems that early preparation is vital. "Get the legal team involved so the data protection rules are understood across different jurisdictions, consider who has access and issues of data security from the beginning," says Campbell.

It seems that moving to cloud-based systems can work - but organisations must tackle potential problems early on.