Your business gains massive advantages when you adopt a cloud-powered payroll platform. But beware: many payroll systems claim to be cloud-native yet do not qualify—and the difference can ultimately burden your business. Fortunately, distinguishing real from fake cloud services is not difficult when you ask the right questions.
If your payroll system seems a little long in the tooth, you are not alone. At least a third of companies use a payroll system that’s over a decade old. Many want to implement a cloud-first strategy to gain all the benefits of modern software.
Some vendors exploit this. They host their desktop software on cloud servers, then claim they provide a cloud-native service. The result is paying for software that is inflexible, more expensive, and lacks the major benefits that only cloud-native software can deliver.
Payroll software has evolved considerably, and companies can future-proof their office by making sure they understand the benefits that cloud-native applications deliver, says PaySpace’s Managing Director, Sandra Crous:
“Born in the cloud payroll software is helping companies save money and modernise payroll. Many of our customers have moved from desktop applications to the cloud, cutting down their payroll processing time by a third. The processing time of a cloud-native application is much faster, and it doesn’t take anyone’s job. Instead, payroll and HR professionals that use cloud-native software get more done and spend less time on routine tasks.”
Cloud-native payroll services have many advantages, including built-in scaling that makes it affordably and flexibly available to all organisations, from small businesses to enterprises. If you have decided that the cloud is what your payroll and HR departments need, you are taking a big step into the future.
Defining Real Cloud
Unfortunately, not all cloud payroll platforms are the same. Some are faking it through a practice called ‘cloud washing’, making an older product seem like it was designed for the cloud. Knowing the difference will save you a lot of trouble in the future.
There is a simple way to distinguish real cloud (cloud-native) software and fake (cloud-washed) software, says Crous:
“Ask the software provider if their product is single-instance and multi-tenant. Traditional software means each business has a copy of the software they bought, while true cloud-native software is one platform all customers access. Though both types of software can be hosted on cloud servers, cloud-native software adopts all the natural advantages of cloud technology, making it extremely scalable, flexible and affordable. And scaling is one thing you cannot fake, not for long, before the inefficiencies and costs catch up. Software that is single-tenant and multi-instance is cloud-native.”
Real Cloud vs Fake Cloud
Cloud-washed software tries to mimic such features, but at significant cost and effort that eventually passes to customers. Unfortunately, some payroll software providers do precisely this, faking their cloud features and making it seem like their traditional service is cloud-native. However, they do not make payroll processing more efficient.
“Fake cloud services often have to create new databases for each client, which means more complexity, more things to manage, and eventually, more cost,” says Crous. “Since true cloud is singular, the software vendor only has to update something once, and it will reflect for all the customers. When we update Discovery medical aid, it automatically applies to all our customers who use Discovery without the customers doing anything. They don’t have to download or update anything. When we update our tax tables, which we do for free, all our customers can use it immediately.”
Another sign of fake cloud is paying for a fixed monthly licence that is the same, regardless of whether you increase or reduce your workforce. Cloud-native software will only charge you per payslip for what you consume.
How to Spot Fake Cloud Software
To spot fake cloud software, ask a provider the following questions:
- Is their software a single, scalable platform that serves multiple customers?
- When they update their software, are these updates automatically rolled out to all their customers with no disruption or extra charge?
- Can they dynamically add and remove large numbers of employees, leveraging the cloud’s natural scaling?
- Was their software designed as a cloud-native product (born in the cloud) instead of a desktop application repurposed to the cloud?
- Can you pay per payslip and scale up or down, dynamically changing your monthly costs (as opposed to fixed licence fees)?
If any of the answers are “no”, there is reason to be suspicious because those are all features of genuine cloud-native software. Cloud-washed software can do some of these things, but not that well. It requires significant amounts of work in the background. In the long run, those costs pass to customers trapped on old software pretending to be new.
“Once you’ve experienced real cloud-native software, you’ll quickly spot the benefits. It’s like using your banking app as opposed to standing in a queue at a branch,” says Crous. “Don’t be fooled by old software cloud-washed to look like something new. The world is becoming cloud-native, and that’s where all smart businesses want to be.”