Economic efficiency and data security – digitization with or without cloud?

Profitability, efficiency, data protection. There are a few things to keep in mind when it comes to digitization.

¹ Profitability and efficiency are two important factors that an economic company must consider when driving its digitalization. At the same time – at least for a digital personnel file – it is often difficult to shed light on the economic perspective through a dedicated ROI calculation. However, simplifying some parameters and HR processes leads to a potential cost reduction of 30%², resulting from shorter distances, faster storage and access, as well as savings in space, cabinets, and paper costs.

With the digital personnel file, piles of paper files have been brought into the digital age. But in many HR departments, paper is still used in day-to-day work and only scanned and digitized at the end of the process. Another HR process that costs a lot of money and time is the document exchange with employees. HR documents are still manually sent to employees by mail. The cost savings with secure digital provision would be enormous. Think of the potential cost savings for monthly payroll, which are printed, enveloped, and sent out every month.

When considering the overall cost-effectiveness of digital HR processes, the question of on-premises or cloud cannot be avoided. This refers to purchasing software and running it in-house in the IT department or using the software as a service, with the software installation located in a data center. The advantages of a cloud solution are that the entire software administration – including operation, daily backup runs, update installations, etc. – is outsourced, allowing administration costs to be saved within the company. With software purchases, on the other hand, you secure the investment in your own company, but you need to provide a one-time larger investment volume at the beginning.

But is a cloud solution also secure?

Yes, if you pay attention to certain parameters. It should be a so-called ‘controlled cloud’ that can only be accessed via secure, encrypted, or tunneled access. Furthermore, this controlled cloud should be in a GDPR compliant data center. Now that the cloud can be operated securely, what about the legal security of digital documents?
Legal Security: Are Digitized Documents Legally Compliant?

Yes, if certain conditions are met. This includes the correct storage of data in a long-term format, such as PDF in an archive, which ensures the immutability of the data. Similar to a CD that can be read repeatedly but the data cannot be changed there anymore. This also includes that the entire procedure – that means the software and the organizational process of usage – is described in a so-called procedure documentation. This shows that the entire process chain is coherent and does not have any data protection gaps.

The Seven Principles Of Data Protection

  • Detailed Authorization Concept
  • Encryption of Documents
  • Logging
  • Multiple Interlocking Security Mechanisms
  • Legally and Audit-Proof Archiving
  • Separation of Database and Archive Area
  • Process Documentation

¹ This article is based on the contribution “Key Processes of Future HR Management” by Dr. Martin Grentzer in the book: Key Factor Strategic Personnel Management, edited by Arne Prieß, 2016.

² Tauscher, Personnel Management, p.70-74

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