On-premises HR users risk being left behind, Oracle says

Customers will either have to move to the cloud or miss out on many new features

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Oracle is telling customers that the future of its HR platform will be in the cloud. It's trying to do this without alarming users who host its applications internally.

Users of on-premises PeopleSoft and E-Business Suite HR system users won't be abandoned as cloud use grows, Oracle promises. These systems will get regular updates and new features. There's no end-of-life risk, said Mark Hurd, Oracle's CEO. "No worries about that," he said.

Even with that, however, Oracle's cloud-basedHuman Capital Management (HCM) system will see many more new features and will pull ahead in capability over on-premises systems, said Hurd.

"The trajectory of new features coming into the cloud product is going not linear, but it's going like this," said Hurd, gesturing sharply upward. This was at a meeting with analysts and press at an Oracle conference this week in Boston. Hurd believes a "majority" of its customers will be on the cloud platform within five years.

Some of the new cloud-specific features include chatbot capabilities. "It's one way to interact with a core HR system without having to go into anything -- you're already in your phone, in chat," said Bertrand Dussert, vice president of HCM transformation and thought leadership at Oracle. Cloud-based machine learning will provide, for instance, targeted training recommendations to employees, he said.

One problem users face with HR upgrades is they are not necessarily an easy sell to C-level executives. Hurd acknowledges as much. ERP and CRM upgrades may deliver "hard benefits," or revenue improvements, while HR systems tend to yield "softer benefits," he said.

Even though Oracle argues that a move to its HR cloud will give users more features at less cost, the shift isn't simple.

Users at Oracle's HCM Cloud Conference said they had to hire system integrators, such as Grant Thornton and PricewaterhouseCoopers, to help with the cloud migration. They cited ROI of three or four years.

In some cases, IT triggers were behind these cloud migrations. Users had fallen behind in on-premises HR releases and/or needed a hardware refresh.

Growth and acquisitions put Emerson in a position of supporting two Oracle HR platforms -- PeopleSoft and the E-Business Suite -- said James Rhodes, vice president of HR information systems at Emerson, an electric equipment maker.

The company wanted a single HR view of its 74,000 employees, said Rhodes, but there was another motivation to go the cloud platform.

While PeopleSoft and E-Business Suite "are great products, they are kind of coming to the end of their useful life," said Rhodes. He believes the next-generation systems are cloud-based.

Millennial-aged employees also want the ability to interact on any device and with as little human involvement as possible, said Rhodes. In contrast to Baby Boomers, "the millennials expect everything to be electronic; they don't want to talk to people," he said.

"As a company, we had to change as well to better effectively manage this new and upcoming workforce," said Rhodes. They have been gradually migrating pieces of its HR functions to the cloud.

Rhodes said Emerson didn't run custom code and was able to get all the functionality it needed through application configurations. But that was not the case for ClubCorp., which owns and operates some 200 golf and country clubs and other facilities.

ClubCorp's Oracle HR platform was behind on upgrades and its hardware "had aged out," said Patrick Benson, its CIO.

In moving to the HCM Cloud, ClubCorp used a relatively new feature for HCM, Oracle's platform as a service. It allowed ClubCorp to keep business customizations that work with the HCM cloud. "The platform as a service provides a very orderly way to exit the cloud core and do your own thing and come back in," he said.

Jason Ringgenberg, the CIO of trucking giant YRC Worldwide, which recently migrated to the HCM cloud, believes the ROI of the migration will prove itself out, and sees it as important as risk reduction and modernization.

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