About 8 years ago I presented a paper on what HR technology would have to support over the following 10 years ~ with great excitement I developed 5 critical areas that would be critical to HR’s survival, and to a large extent most of those did materialise (The only one that did’nt was my view that smart-card technology would play a bigger part in HR systems), nevertheless the point I am making is that the HR technology future was pretty clear back then because 10 years ago it was about optimising the operational side on HR technology. Back then Peoplesoft was the ERP system and was a leader in the field, with SAP and Oracle trailing in the dust. They eventually all caught up and are pretty much on an equal footing now. These systems as well as other great standalone HR/Payroll tools did help reposition HR to become excellent administrators (granted many system implementation were flops ~ but that’s a people issue).But with the current hype to improve HR’s value contribution to the business and reposition itself as a strategic player, I find myself contemplating the role that HR software will play in achieving this.
What will HR systems need to support over the next 8-10 years.Of course the short term (2 years) improvement areas are pretty obvious, things such as more robust Talent Management tools, improved and integrated Strategic Workforce Planning tools, integration of Enterprise 2.0 tools to facilitate networking and more sophisticated Outsourcing components off the back of your own HR software (eg. plugging your SAP system onto a payroll outsourcer payroll engine.To a large extent though, these short term improvements are really more of the same ~ all of the reputable HR systems have to some extent components of these requirements (except Web 2.0), and will continually enhance them over time to suite their customer demands. But surely there must be be something more fundamental required to support a Strategic HR department, something beyond simply saying we will provide more sophisticated reporting, (slice-and-dice , drill down etc), because these sort of things may help, but won’t make a significant change.Understanding the strategic HR department of the future, may give some insight into the tools they will need. The Strategic HR department of the future will be less focused on the administration of people (in fact I foresee that HR admin will be removed from HR departments of the future to form part of a combined HR/Finance/other call centre and shared services team) and will focus on being a measurable component of the success (or failure) of an organisation.
The CEO will want to know what % the HR department is contributing to shareholder value in a clear and unambiguous manner ~ just as he does of other departments. In order to achieve this, HR will need to become far more clear about how to measure their contributions and will definitely need a different level of sophistication in its tools to achieve this. No longer will a CEO accept that training turnout was 98%, unapproved absence was down to 2%, turnover was stable at 15% and so on, because these measures are meaningless and open to hours of useless debate about their relevance. No in future HR will need to be accountable to absolute specifics ~ The CEO will make (for example) HR accountable for 3 of the 16% growth in net profit over the next 2 years, accountable for 10% of the savings required from marginal operations and 18% for the effectiveness of the next M&A.
A few gasps of air, I hear being taken by concerned HR directors…. but here is the deal, you cannot be a strategic playing in today’s organisations without being accountable for the success (or failure) of the organisation. HR cannot be the fence sitter or referee anymore if they claim to want a strategic status.
Anyway back to the point on HRIS ~ HR will need a new set of tools that allow it to cascade a business strategy more eloquently into an HR strategy that is measurable, it goes beyond a balanced score-card, its lends itself to a new level of sophistication.
More to follow, but your thoughts are welcome.
by:
Rob Scott’s Weblog
Talking HR Strategy and HR Information Technology
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