Can I trust the cloud with my Payroll?

It has become the buzzword of the last 18 months. Cloud solutions, Cloud Services, Software as a Service, Infrastructure as a Service, and the list goes on. And, not unlike previous buzz-words in the short history of Information Technology, Cloud Computing has the ability to be a game changer for future product offerings. It promises lower capital investments, simpler pay-per-use licensing options, lower barriers to entry, and very importantly, lower barriers to exit too.

These last two points will – in my opinion – spell the end to fly-by-night companies hoping to bring a simple, limited, and poorly supported product into the market. Granted, potential customers can easily swap out one product for another, but because of the low investment in adopting a cloud offering to start with, the inertia embedded in huge capital expenditure has been removed, resulting in clients being able to – at a whim – move to another solution provider should they find the service and offering to be non- satisfactory.

Building a kitchen vs. calling Dial-A-Meal

Let us use food as a metaphor. Traditionally, payroll solutions were the equivalent of fitting a new kitchen. You build the kitchen around your requirements, fit it with the appliances that you prefer to use, and design the layout according to what you believe to be the most efficient setup.

Should another interior designer knock on your door and try to convince you to change your kitchen, there will be a number of reasons why you would be reluctant to even consider it. Even if not all your appliances are working according to the pamphlets you were given initially, you would have to consider the cost invested in building your kitchen, financially and resource wise, and more often than not, it would simply be cheaper to live with your kitchen’s shortcomings.

And then there is Dial-a-Meal.

You no longer need a kitchen. If you feel like eating, look at the menus, and order what you want. If you like what you get, you’ll use that service provider again. If not, you simply order from another.

Cloud computing offerings still require time to set up your payroll to your specific requirements, and you would still need to move your employees with their year-to-date data from one solution to the other. But this can be done at a fraction of the cost of ripping out one on-site software package for another, as the infrastructure costs are not there. Add to this the fact that there is no more vendor-lock-in with annual contracts and you end up with a win-win situation for the customer.

What’s the catch?

It is clear that running your payroll in the cloud can be hugely advantageous. Why then, aren’t we all using it?

User Experience

Depending on the size of your company and the amount of work that your payroll needs to do, the presentation layer of your payroll becomes a make-or-break factor in running your weekly wages; loading hours, punching exceptions, and generating reports. Although this is a given for ‘traditional’ software solutions, running a hosted payroll from the Cloud typically implies that the application would have been written to be run through a web browser, using HTML, Style-Sheets, Ajax, and a myriad of technologies to create a similar experience than what one would expect in a normal application.

But here is the catch: Not all browsers are created equally, meaning that very often developers will have had to settle for the lowest common denominator when it comes to using features that will be guaranteed to work on all the popular browsers. This typically results in a user experience that may – initially – be quite simple to grasp and adopt, but is soon found to be frustratingly cumbersome to perform rapid repetitive tasks on.

The User Experience – in this context – is thus the presentation and interaction that the user has with the cloud application. How simple is it to use? But more importantly, if one is in a hurry, will one be able to process your data input in a timeous manner?

Security

Whenever Cloud Computing features in any discussion, it is inevitable that security of data becomes one of the sub-topics that everyone seems to have close at heart. To consider security in the cloud, one needs to define the different layers where security needs to be addressed.

Physical Access

Physical access includes the handling of your backup tapes and other physical media where some or all of your data may reside. Make sure that, whoever your service provider is, the necessary processes are set in place that if, at any time, your data and backup media has to be handled physically, the necessary documentation, signed, date-stamped, and authorised, accompanies it. Physical access to data may seem benign in the bigger scheme of things, but numerous articles have been written stating the ease with which information could be stolen thanks to the huge capacity of modern-day USB Flash Drives.

Logical Access

One of the greatest advantages of Cloud Computing is the omnipresence of your data and accompanied processes. But this is a double-edged sword. If you can have access to your payroll from anywhere in the world, so can others.

Not only do you need to be concerned about your passwords falling into the wrong hands (for which regular compulsory password changes could mitigate the risk), but making sure the data is transmitted in a secure way between you and your solution provider suddenly jumps to the top as the most important step one should take to ensure security from a logical access perspective.

It is imperative that you get a clear, unambiguous explanation from your service provider as to how they address both of these layers.

Latency

The last point to raise, is that of latency. When the operator performs an action, how long does it take for the response to be visually confirmed? The cause of latency can be anything from an inferior network card on your pc, to an overburdened network, or even poor infrastructure of the cloud provider. The point is, if latency is problematic, no matter which solution you try, look closer to home for the solution. In any other instance, make latency a primary performance measurement before deciding on a cloud-based payroll solution

In Conclusion

Running your payroll in the cloud can be a huge cost saver for first-time users. Companies already running on a traditional configuration may have to think twice before making the move. But the good news is that most providers offer you the chance to try-before-buy. Make use of that opportunity. Consider the User Experience, the Security, and Latency when deciding on a solution.

And if all else fails, use your favourite search engine as a take-out menu, and find another meal.

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