Cloud is changing the face of Human Capital Management outsourcing

HCM (Human Capital Management) practices in South Africa are ever evolving, and with this a growing demand for software that’s more agile, mobile and flexible in order to support today’s dynamic working environments. By Mandisa Seleoane

The signs of cloud’s growing influence within the sector are becoming more apparent.

While uptake of cloud has been relatively restrained in South Africa in comparison to other parts of the world, but as it becomes more commonplace, a broader shift is inevitable. It may look like it’s taking a long time, however once we reach the tipping point, it will shift quickly. It’s also up to service providers to address legitimate concerns such as data protection, access, internet availability and certain regulatory aspects in a holistic manner.

Today’s outsourced HCM platforms already present an attractive option because they offer a seamless single point of information, and through integration require very little manual intervention. Cloud-based HCM platforms take the advantages one step further.

Cloud allows for the same functionality, but with a much reduced upfront capital outlay. There are huge advantages for organisations in terms of total cost of ownership, for instance the technical expertise required to maintain the system is carried out by the service provider and at Adapt IT, we have been executing this on behalf of our clients for more than 15 years.

As more organisations move to the cloud to benefit from standardisation, simplification and greater efficiency, service providers are also enhancing their offerings to meet specific business needs. One insight to emerge from South Africa’s Outsourcing & Offshoring summit in 2015 confirmed that the Business Process Outsourcing (BPO) sector has shown significant growth over the last few years.

We see a positive trend emerging in that South African businesses have become more deliberate and strategic about what functions are outsourced. Partnering with the right HCM vendor means organisations have support in managing key transactional HCM deliverables which in some instances require specialist knowledge and guidance in areas such as payroll, tax, benefits, and training requirements.

For businesses looking to make the move to cloud and/or outsource their HCM, there are a few key factors to consider. Organisations should absolutely do their homework in selecting a service provider.

The biggest advantage of outsourcing HCM is that it clears administrative blockages to allow a business to focus on its core function. If the transactional side of HCM is taken care of, a business can focus more on taking care of its most valuable asset – its employees. Due diligence must be done to ensure service providers are capable of delivering on their commitments.

The proposed service levels should make sense for your specific industry and business. Organisations should further hold service providers accountable for delivering expected improvements. This requires discipline in performance measurement; otherwise return on investment, even when delivered, goes unrecognised and unappreciated.

  • Mandisa Seleoane is a Human Capital Executive at Adapt IT – a JSE listed provider of specialised software solutions and services, amongst them the SAP HCM Outsourcing and SAP cloud solutions



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