The recent launch of two multinational data centres in South Africa has placed renewed focus on the benefits that the cloud can provide businesses. Ian McAlister, General Manager of HR (human resources) and payroll specialists CRS Technologies South Africa, believes that when it comes to sensitive payroll data, there are caveats to be aware of when migrating to the cloud.

"Availability and security were the two biggest stumbling blocks to enterprise adoption of the cloud in 2007. Fast forward to 2019 and decision-makers still face these concerns. Even though both elements have improved significantly, addressing data availability and security will always be a priority for organisations, especially given the evolving regulatory environment."

Because data in a cloud environment is accessed through the web, it is inherently less secure than a dedicated hosted solution (where companies have a dedicated server at a secure location with applications that can be customised to their unique requirements).

For example, the Microsoft Remote Desktop Protocol (RDP) provides companies with a significantly more secure method of connecting to hosted servers, as opposed to the ‘public' access to the cloud.

Not understanding the implications when moving important data (such as those stored in payroll and HR systems) could have significant financial and reputational repercussions," McAlister warns.

"Data has become fundamental to business growth in the digital business landscape. Companies rely on data analytics to draw insights and customise offerings for customers, while end-users share personal information to ensure a tailored experience that reflects their likes and dislikes.

Now imagine a world where that data has a bullseye painted on it. Nobody is safe, and no organisation is too small or too large to be compromised. According to the 2018 Cost of a Data Breach Study, the average cost of a data breach globally in 2018 is $3.86 million."

"Clearly, there is significant risk for HR and payroll departments," McAlister continues.

"The potential for compromise when using the public cloud (computing services offered by third-party providers over the public internet) is simply too great. Instead, companies must investigate the opportunities that private (a secure cloud-based environment in which only a specific client can operate) and hybrid cloud (a combination of both public and private cloud approaches) solutions provide, while still ensuring sensitive data is kept safe."

McAlister says that these more secure cloud offerings provide a range of benefits for HR and payroll departments, given the real-time environment of business today.

"These offerings typically deliver automated, real-time and exception-based options for departments to carefully manage sensitive data. They also provide decision-makers with the ability to validate transactional and input data at the source (depending on the provider and solution used). This enables departments to not only improve their speed to market, but also reduce the strain on administrative staff."

While it does bring immense value, the cloud should not be viewed as a silver bullet to address all organisational challenges when it comes to HR and payroll. Instead, McAlister says companies need to focus on the strategic value that private and hybrid cloud offerings can provide, while remaining focused on security and data compliance fundamentals.

To read more about this topic, click here to download our free White Paper ‘Enhancing Payroll with the Cloud'.