The Right Call: Choosing Between an On-Premises or Cloud-based HRIS


Are you ready for the cloud, or is custom-built what you need? We help you decipher this common quandary.

This is an interesting question. When considering the selection of a human resource information systemOpens a new window or HRIS solution, a major factor worth pondering over, is whether it should be on-premise on in the cloud, which is known as Software-as-a-Service or SaaS. As always, the most pragmatic, efficient, and cost-effective answer to the above is in assessing the pros and cons of both and earmarking the same to your individual IT requirements.

Also read: What Employees Expect from Their Human Resource Information SystemsOpens a new window

With HR needs rapidly becoming more complex and layered, the HRIS system should be both budget-friendly while also offering all the functionalities required. It should also come with stringent data security and end-to-end accessibility, given the criticality of data stored in your HR database. Other considerations include tax impact, integration, control, and mobile support. Here are then the key factors one should pause to contemplate and understand clearly, before adopting an HRIS system, of any kind.

Also read: 36% of SMEs want to invest in HRIS & Namely releases APIs that can helpOpens a new window

The cloud and its import

Recently, IDC reported that public IT cloud services are scheduled to hit an all-new high by the end of 2018, rising to around $160 billion, a 23.2% uptick from 2017. The HR world is truly witnessing a transformation regarding cloud utilization, consistently surpassing legacy on-premise applications. The question now isn’t an ‘if,’ and veers towards ‘how’ and a ‘when,’ with regards to core functionalities like an HR database.

There are several cloud-based providers catering specifically to small to medium enterprises, like Bamboo HR which claims to be the first HR suite for SMEs. It offers a cloud-based HRIS system covering areas related to application tracking, e-onboarding, time-tracking, data management, performance management, and HR workflows. A flexi pricing model makes it affordable to the SME sector. Learn more about Bamboo HR and some of its possible alternatives hereOpens a new window .

On-premise and the case for it

Having said that, an on-premise HRIS system is a viable alternative, even as you prepare your IT division to take the leap. Often, IT teams consider all its requirements and finally select an alternative calibrated to its unique needs. Remember, customization is a massive plus for an HR database framework that’s configured and operated on-premise.

Electronic Arts Inc, a global provider of interactive entertainment software, EA, re-envisioned their outdated HRIS by combining Workday’s new HR management system with VisierOpens a new window , a cloud-based analytics tool. This helped the company save 24 weeks of labor per year, delivering high value. A hybrid alternative such as this may also be viable if you have the requisite skill sets.

Taking a decision

An easy way to get to the bottom of your choice is to answer a couple of questions. These will help ascertain how to articulate and place yourself on the road, from an on-premise HRIS system to a cloud-based platform.

  1. Can the system chosen operating in the cloud, offer sufficient cybersecurity for all the employee PII (Personal Identity Information) that’s likely to be stored in your HR database?

Also read: How a Central Employee Database Can Transform Your HRIS Opens a new window

  1. Will the cloud provides you with the storage facilities you need?
  2. Can storage volumes be reduced or increased, given changing necessities?
  3. Can the cloud ensure flexibility while maintaining a certain control and consolidation of the content on your HRIS system?
  4. Where exactly is the storage located? Based on geographies, HR database privacy and its compliance ramifications could alter.


A final word

On-premise HRIS’ biggest advantage is its ability to integrate with your existing software systems. Access to the HR database is also simpler and more secure, operating via a company intranet, moving easily onto approved mobile devices. However, 5000+ companies Opens a new window have moved to the cloud in the past five years. Yes, some companies are still using legacy on-premise HR software, but the trend is slowly dying, and the pace of adoption is only set to increase.

Also read: SAP launches the program to help transition on-premise systems to the cloudOpens a new window

There you have it, then. These are the most common considerations while making a choice.

A quick tip: if you’re under 100 employees, opt for a cloud-based HRIS system which is cost-effective and streamlined for your limited needs. However, if you’re bigger and have a vast array of requirements, it’s best to have something on-premise that’s bespoke, specific, and personalized.