HR technology: time for an upgrade?

Investment in HR-related technology and software may be up, but HR leaders still need to build a solid business case to get it over the line

SPENDING BY HR departments increased by 4% between 2014 and 2015, according to the Bersin by Deloitte 2015 HR Factbook. Between 5% and 8% of this went towards tools and technology. Large companies unsurprisingly spent the most on technology(almost 10% of their HR budget), and this increased spend has fuelled huge market growth in cloud-based HR technologies. The entire HR software market is over US$10bn in size and Bersin by Deloitte says many segments are growing at double-digit rates.

Closer to home, Kevin Brooks, national sales and marketing manager at Frontier Software, says companies are starting to realise the value of good HR technology and the benefits this can bring to any organisation. As a result, the investments are increasing – however, many companies are still to actually take the step of actively taking advantage of the full potential of new HR technologies. 

“Whilst the majority of decision-makers have realised the need for new HR technologies, many are still not focusing on how to deploy these solutions,” he says.

“One thing companies are investing in is mobilising key features of the HR function, such as self-service. The demand to be mobile is increasing, and as the workforce is mobilising so does the HR department. This not only saves times for HR personnel but also contributes to staff engagement and a positive employee experience.”

What’s hot?
In the second half of 2015, Information Services Group (ISG) conducted its second annual Industry Trends in Human Resources Technology and Service Delivery Survey. The survey explores the changing landscape of HR technology and service delivery – and therefore provides clues as to where companies are spending. The key findings from this year’s survey suggest:

• Enterprises continue to migrate from on-premises Human Resource Management Systems (HRMS) to Software-as-a-Service (SaaS)-based HR technologies; more than 70% of respondents have implemented or plan to implement HR SaaS within the next two years.

• User experience and usability factors are driving selection criteria and expected benefits for both HR technology and service delivery model decisions.

• HR organisations are shifting their focus from cost savings to strategic business alignment, process improvement and employee engagement.

• The market is seeing initial signs that enterprise-level HR decision-making is becoming increasingly data-driven.

Who holds the purse strings?
According to a 2013 survey by member-based advisory firm CEB, CIOs still control about 60% of the average IT budget in a corporation. However, the other 40% is being utilised by a diverse range of internal ‘rogue agents’, including marketing, finance, and the new member on the block, HR.

“It’s becoming increasingly common for HR departments to have technology as part of their budget, as more companies realise and acknowledge the business benefits and efficiency achieved from effective HR systems,” says Brooks.

And while CEB reports that most CIOs are actually OK with this more democratic approach to IT spending, many CHROs still need the go-ahead for technology investment from the CFO.

Fortunately, the ‘sell’ is getting easier.

“Mobilising key aspects of your HR practices is very much becoming the norm,” says Brooks. “Increased mobility can enrich the employee experience, which in turn can increase employee engagement and productivity. For employees to be able to access their HR information anywhere at any time is giving them a freedom they haven’t had in the past. If companies don’t acknowledge this they will fall behind very quickly.”

Frontier Software, for example, has seen increased interest and enquiries for core HR and payroll, workforce management and talent management software.

This is not before time: many HR professionals are coping with outmoded and old-fashioned ‘legacy’ systems, which over time simply will not hit the mark.

“At some point it will become unworkable, and manual work-arounds will become unmanageable,” Brooks says. “A review of HR processes can usually help in the decisionmaking process when upgrading or deciding to change their incumbent system.” 

Brooks stresses that despite the temptations, when it comes to new technology HR should not jump into industry trends without establishing alignment to their business needs and readiness to deploy such technology.

“A good technology or system vendor should be able to uncover the requirements based on your HR strategy and overall company objectives,” he says.

“It’s becoming increasingly common for HR departments to have technology as part of their budget, as more companies realise and acknowledge the business benefits and efficiency achieved from effective HR systems” Kevin Brooks, Frontier Software


Getting buy-in
Further to educating the CFO and other decision-makers about the benefits of new HR systems, the CIO and business analysts need to be involved in the decisions around HR tech investments. The CIO in particular needs to be comfortable that the system can support the company’s data security, data hosting and technical requirements.

Getting buy-in from your employees is also crucial, says Brooks. “By including them in the process they are less likely to resist the change in adopting a new technology or software, which will ultimately drive the success of your new system. A great way to engage your staff in the process is to do an internal survey or pilot group to understand their requirements well before you start speaking to vendors.”

Final tips
For those companies that are considering implementing new technology and/or service delivery model changes, there are a few key points to consider from the ISG report:

1. Understand the specific ways that HR technology can best support the most critical business processes; create detailed use cases that focus on the organisation’s key requirements.

2. Ask for ‘sandbox testing’ as a component of technology selection. Buyers need a first-hand experience of interacting with the application and navigating in the tool. Technology providers are adjusting to these demands by having ready-to-configure sandbox environments, detailed user guides and a helpline within the sandbox. Providers unwilling to give open access to clients for testing will find it increasingly challenging to compete.

3. Be sure to go beyond functionality to understand the software vendor’s strategic direction, road map, services and support model.

4. In making the HR transformation, be sure to address all parts of the overall service delivery model, including shared service centres, HR knowledge base/HR portals and customer support solutions (eg telephony, chat, case management).

5. Pay significant attention to and invest in change management and process redesign. New tools applied to old processes, or tools that aren’t used by the majority of employees or managers, will not work as intended.

6. Develop a business case for change that incorporates the strategic, operational and financial benefits for the organisation.

Frontier Software is a global leader in HR Talent Management and Payroll solutions. Their solution ichris sets the benchmark for functionality and improved employee experience. With support offices in Melbourne, Brisbane, Sydney, Canberra, Adelaide and Perth and key global locations, Frontier Software is well placed to service their 1,700 clients.


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