Change is inevitable, but it comes quicker to some parts of the business than others. The tipping point is usually when business pain points and pressure outweigh the status quo. A good example is HR which is currently under significant pressure to get its house in order.
Globalisation is just one of the pressures knocking on the door, forcing HR to standardise systems and processes, and provide a single global system of record for HR data – such as name, payroll, benefits, talent and contact information, as well as legally required documentation. Without it, companies can’t operate effectively or efficiently, and HR can’t keep pace with the business as it expands into new markets. Add to this the pressures around the massive demographic changes pending in the workforce with the retiring older generation, lack of available talent to replace them or their knowledge, coupled with on-boarding issues around the younger generation, and yet you’ll still find that many HR departments haven’t been empowered to be proactive due to headcount and budget constraints.
In the past – and still the present for a lot of organisations – core HR systems were fragmented. Many companies adopted a “best-of-breed” approach and on-premise technology came with its challenges in terms of user experience and low adoption rates. We are now in a period of transition and technology has moved on since then with cloud and hybrid based easy to use single systems of records, but not all companies have moved their HR departments from the ‘police’ and ‘polite’ role to the ‘partner’ and ‘player’ role I talked about in a previous blog.
A recent Forrester survey found that fewer than twenty seven per cent of IT and HR professionals have a single, global system of record (Click to Tweet). On average, global companies today use seven different systems and nearly one in five companies use ten or more systems! In fact, many companies don’t have full visibility of their systems at all. This is having a major impact on HR strategy and something which is far more important strategy execution, if you were to look at the strategy in many HR departments for delivering successful services and transactional excellence to the business, what you’d actually find is a list of things they can do well. 
That’s because strategy in this context is largely a commodity. When it comes to HR systems, execution that is the key and only the smarter companies have figured this out. So how do you get your HR house in order? Clearly putting better processes and technology in place are a given, but it’s important to ask yourself five key questions if you are going to be able to execute well.
- First, does the system support “glocalisation”? It’s actually not as easy as you think to find a global system of record that caters for both global and local considerations, such as translation, time zones, currencies, local accounting practices, legal requirements and compliance mandates.
- Second, does the system support end to end talent management? By this I mean not just capturing basic name, home address, and payroll details. I mean can it tell you about an individual’s knowledge, skills, expertise, performance scorecards, career and development plans, as well as information connections and social insights?
- Third, Will you be able to correlate your HR data across all your systems and use analytics to support your decision making? In other words, do you have the ability to correlate your employee and talent data with other systems, such as CRM and financials to unlock insights about your workforce?
- Fourth, is it adaptable and flexible? Things change so systems need to change with you – whether it’s new organisational structures, new employees or a new acquisition. Just make sure you’re not having to conform to someone else’s data model.
- Fifth, is it easy to use for HR as well as non-HR employees? If it’s not, it will rapidly become shelf ware. And finally, does it encourage global collaboration? Can employees set up groups to share information and content, find subject matter experts easily to answer an urgent customer query or assemble virtual teams?
As HR moves through its inevitable maturity so will its systems. I think moving forward we will see HR becoming almost akin to a risk management function, particularly with all of the major workforce changes and business scenario planning that will be required.
Over time and with the benefits of automation and technology, the HR Department will move to a leaner version of itself, focusing on strategic thinking, leveraging workforce planning and analytics, and business partnering. All the more reason to get your house in order now...
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Best regards,
Eric Brunelle, Head of the Executive Value Network for HR, SAP
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