Hudson shrinks IT department with move to cloud

Project to move core payroll and billing system to the cloud is the latest initiative to improve efficiency and rationalise IT function

Large recruitment firm Hudson has reduced its IT staff numbers from 50 to 15 across Australia and New Zealand over the past three years partly due to a gradual move towards cloud computing.

Since 2009, Hudson’s Australia and New Zealand operations has moved its payroll and billing system, Microsoft Office Communicator software and storage services, into the cloud by engaging specialist outsourcing providers.

Hudson’s Asia Pacific CFO Mark Leigh told CIO that Hudson “had gone through a pretty significant [business] transformation over the last three years.”

He said moving these core applications and systems to the cloud was a “significant driver” to reduce its IT staff numbers.

Hudson announced yesterday that it had replaced its legacy payroll and billing systems with cloud-based software provided by Infosys. The platform has automated these functions for more than 2000 temporary staff and contractors and 600 full-time employees.

Hudson and Infosys also created a portal that makes it easier for contractors to get paid quickly and accurately and subscribe to SMS alerts.

“[Hudson’s legacy payroll and billing systems] were costly from a business perspective; we had to retain in-house business analysts and developers,” he said.

According to Leigh, cloud computing enables Hudson to access ERP and infrastructure expertise that it does not have in-house or “we don’t have those levels of specialisation.”

The cloud computing model also provides Hudson with a variable or “pay-as-you-go” cost structure, which eased pressure on its operational budget.

“That very much matches our revenue stream as well so it’s good to have costs and revenue in alignment,” he said. “For contracting there are seasonal increases and decreases [in revenue] and the economic cycle that goes with that.”

Leigh said it was difficult to put a figure on total cost savings resulting from its move to cloud computing and other outsourcing agreements undertaken by the company in recent years.

“Because of this and other work Hudson has done in either outsourcing or cloud services across finance and IT, we were able to lose a whole 1000 square metre floor in the Sydney CBD, and [floorspace is] expensive,” Leigh said.

Remaining staff on a growth path

According to Leigh, the roles of Hudson’s remaining 15 staff across Australia and New Zealand have changed from “delivering outcomes to actually managing outcomes.”

“That’s a big mindset shift I think for many people to go through,” he said. “Once they have made [that shift they] find that their job is more challenging and rewarding and probably more difficult than it was before. Our [IT] people are focused on managing those core outcomes.”

Hudson’s core database for managing candidates and its customer relationship management (CRM) system are still managed locally. However, Leigh expected to move these systems to the cloud over the next few years.

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