Get the most from your move to the cloud: 5 key takeaways

The reality is becoming increasingly clear. For companies looking to keep moving forward and maintain their competitive edge, HR transformation is a must. With many on-premise systems set to lose maintenance support in the near future, moving HCM systems to the cloud is no longer optional, it’s a necessity.

Strada’s latest research report, The cost of standing still: Why ignoring cloud ERP could harm your business, reveals that nearly half (48%) of organizations have attempted some form of HCM transformation in the past three years. However, it also highlights a common issue: the foundational elements necessary to achieve their goals are often missing.

While the strategic intent is clear, execution is lagging behind.

What’s standing in the way?

The barriers to meaningful change are well-known. Businesses are clear about their priorities: Efficiency (36%), digital transformation (36%), and technology value realization (35%) emerge as the top three goals for organizations looking to modernize. However, the obstacles and frictions they face are both recognizable and relatable:

• Budget constraints (42%)
• Integration with existing systems (42%)
• Resistance to change (33%) 
  

While it’s easy to view HR transformation solely through the lens of technology, these challenges illustrate the need for a shift in behaviors, mindsets and priorities across the company. Strategic vision is important, but it needs to be supported by realistic goals, effective change management, and organizational alignment.

To help companies confidently move forward in their cloud transformation, here are 5 ways to maximize your move to the cloud: 

1. Secure sufficient budgets and demonstrate ROI

When budgeting for cloud transformations, many organizations focus on the upfront costs while overlooking long-term financial benefits and savings. Effective budgeting relies on a solid business case that clearly demonstrates ROI. Fortunately, the benefits of cloud-based systems are clear:

• Reduced maintenance and associated costs
• Real-time data access
• Potential for AI-driven automation
• Built-in security
• Scalability
  

Providing a cost analysis that supports your ROI claims with concrete numbers will solidify your business case. Consider the following:

• The current cost of running your existing system
• Lost opportunities for growth and advancement  from staying on your current system
• The cost of maintaining your current system vs. the cost of proposed solutions over the next 3-5 years.
• The total cost of ownership, including training and software licensing.
  

Finally, aligning strategic objectives with practical user experience ensures that HR, finance, and IT are all working towards the same ROI goals. This alignment will bring clarity, coordination, and focus to your transformation efforts.

2. Prioritize fully integrated systems

According to our research, over half (52%) of the companies we surveyed are currently operating on two or three separate HCM systems. This fragmentation can make transformation harder to deliver. Consolidating these systems into a single platform can enhance visibility, consistency, and the user experience, helping to ensure your transformation’s success.

Additionally, unifying HR, IT, Finance, and Payroll on a single cloud platform provides a holistic, reliable view of the entire organization. This not only improves reporting and decision-making but also reduces complexity and costs, simplifies compliance, and offers the flexibility to adapt to new developments and innovations.

3. Simplify complexity through phased rollouts

While many companies are understandably eager to leap into their future state by fully adopting new technologies and discarding old ways of working, this approach can also be overwhelming and problematic.

Phased rollouts divide your transformation into controlled phases, allowing your organization to adapt to changes more gradually. This has the potential to be less disruptive, making change management easier, improving adoption rates and enabling better allocation of budget and resources. 

4. Invest in training and change management

Training

With technology evolving rapidly and AI’s growing presence, it’s more important than ever to ensure that employees are well-trained and equipped with the skills needed to leverage these technologies effectively and realize your strategic vision.

New advances in AI, automation, integration and data insights can significantly improve the employee experience by alleviating many laborious and repetitive tasks. However, traditional training and workshop programs may no longer suffice. Focusing on real-world use cases, rather than just system navigation, can better prepare your team for these changes and help maximize the potential benefits.

Change management

Navigating the complexities of transformation can be challenging, and all organizations will encounter some degree of difficulty.  Investing in effective change management strategies can reduce resistance and ensure successful adoption.

Our recent report in collaboration with ISG, Unlocking Value with HCM Transformation suggests the following approaches for a smooth transition:

• Develop tailored change strategies
• Strengthen communication & engagement
• Secure executive sponsorship
• Extend post-deployment support
• Redefine training approaches 

5. Engage employees at every level 

Employee engagement is a crucial driver of successful transformation. It’s not just about delivering an engaging employee experience. It’s essential to consider employee priorities and preferences from the start, involving them in the transformation process.

Our research reveals that mismatched priorities between leadership and employees can lead to disconnects and delays in the transformation process. For example, while 92% of C-suite respondents consider their current HR systems effective, only 63% of frontline staff felt the same, with just14% rating their systems as “very effective.”

When leadership initiates transformation, but overlooks employee considerations, employees often feel excluded and powerless to raise their concerns, leading to a loss of engagement.

To avoid potential frictions and delays, we recommend:

• Involving frontline staff in choosing and testing new HR systems to ensure tools fit real-world workflows
• Using self-service portals and mobile-friendly platforms to empower employees, improve efficiency and lighten the load on HR teams
• Setting up cross-functional teams to steer system selection, gather input, and guide rollout so decisions match employees’ actual needs
• Asking for regular employee feedback to close any gap between leadership and staff expectations
• Using structured career mobility tools in HR systems to help retain talent and support global workforce strategies

The road ahead on the move to the cloud

With legacy on-premise systems losing maintenance support in coming years, the question is no longer if businesses will move to the cloud, but when. While cloud transformation is a significant undertaking, it can be achieved with minimal disruption.

The approaches outlined above can help you clarify your business priorities and purpose, maintain alignment across departments, and build the right infrastructure to bring everyone along on the journey. This will ensure that your move to the cloud is not only smooth, but also successful—positioning your company at the forefront, ready to keep moving forward.