Monday, October 15, 2012

Moving HCM To The Cloud Saves Flextronics $100 Million

My job at SAP is to make the case for talent management in the cloud and help SAP Core HR OnPremise customers make the move to the cloud for talent management applications. I point out to customers that significant investments in talent management applications are being made in the cloud not just at SAP, but by the whole industry. I also point out to them that I believe that customers are moving to the cloud because of significant cost savings among other benefits such as faster time to value and faster adoption of new innovation.

I tell the HR and HR-IT audience that their CIO and CFO are going to demand that they move to the cloud for HCM, particularly for talent management applications because of the incredible cost savings they can get. This is going to happen sooner than we think. Here is one very public data point from Flextronics. The company standardized on cloud globally for HCM and, along with other shifts, saved $100 million in three years.

Since Flextronics employee count is public, it might be possible for most organizations to get a rough idea about how much money they can save by moving HCM to the cloud. It may not be 100% accurate. But the projected savings will be compelling enough for any CIO or CFO to give it a try.

Unlike the cost savings the BPO providers promised a few years back, the cost savings promised by cloud HCM providers is real and proven by HCM cloud software providers. I met many customers and software providers this year and asked them about their plans and level of comfort with the cloud. Based on those conversations and some savings projections that i was privy to, I believe that the movement of HCM, particularly talent management, to the cloud is going to happen sooner that we think. 

1 comment:

  1. Prashanth, great blog post. But, it's important to note that Flextronics had over 40 HCM systems that they were using prior to standardizing on a cloud HR solution. I think any organization will have significant savings when standardizing on one HR platform regardless of the deployment method. While many companies have also achieved savings when moving to the cloud, as they say, "your mileage may vary".


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