Today’s HR leaders face rapidly changing workforce environments that require management of an overwhelming amount of data. The business case for HR systems is no longer a debate, but figuring out how to use these systems to achieve business outcomes and create an HR technology ecosystem that is ready for the future of work is still a major question mark.
Here to shed some light on this complex issue is Stacey Harris, VP of Research and Analytics at Sierra-Cedar Research, a U.S based research house that tracks the adoption, deployment approaches, and value achieved from HR technologies.
Stacey will share some secrets to HR technology success during her session at HR Innovation & Tech Fest, 18-19 November 2019 in Sydney. She’ll uncover insights from over 14,000 organisations who participated in the Sierra-Cedar HR Systems Survey, the longest running global HR systems survey in the market.
Here, Stacey breaks down the foundational elements you need to get in place, how to balance business needs with employee aspirations, and the importance of integration with your business applications.
The Foundation of the HCM Blueprint: Strategy, Culture and Data Governance
In the Sierra-Cedar 2018-2019 HR Systems Survey, we asked questions on six primary categories and 54 individual application areas, including the Emerging Technology areas that are detailed in the Sierra-Cedar Human Capital Management (HCM) Blueprint. The Survey also gathers details concerning HR System Strategies, processes, vendors, implementation, Change Management, security practices, expenditures, and supporting resources.
Over the last two decades, we’ve seen pathways of application adoptions emerge as we follow respondent organizations through their annual plans for adopting and implementing HR applications. Some organizations have a clear strategy for how they purchase and implement their HR systems; others exhibit an organic-growth model based on immediate needs and funds. Every organization should take the path that best suits its individual situation based on organizational strategy, Culture, and unique approach to data management when navigating an HR Systems Blueprint. For 2018, we’ve updated the Sierra-Cedar HCM Application Blueprint to more accurately reflect recent shifts in the technology ecosystems we’ve followed since the Survey’s inception 21 years ago.
Square One: Strategy, Culture, Data Governance
Three foundational elements are at the center of the HCM Application Blueprint:
- Data Governance
It becomes necessary to have an Enterprise HR Systems Strategy for the adoption, integration, and configuration of these solutions as HR Systems shift from administrative support tools to strategic instruments finely tuned to engage and optimize the workforce. Organizations should consider the long-term impact systems will have on their workforce as HR applications are now at the center of an organization’s ability to manage workforce productivity and enterprise Culture, while governing the use of highly valuable but sensitive workforce Data. The over-arching management of these foundational elements throughout the organization requires an Enterprise Strategy.
Organizations often focus solely on specific functionality desired from HR technology and supporting processes but may overlook how that functionality will actually work within their unique Culture. Technology is worthless unless it’s used—it must fit within the context of how an organization operates to optimize the organization’s investment. HR application adoption requires significant energies—including executive sponsors and Change Management efforts—for a truly successful implementation. Taking an honest look at your organization’s Culture will help determine the best Strategy to use when purchasing technology.
The footprint of workforce data goes beyond business applications—it extends into social networks, mingles with environmental tools, and overlaps with personal profiles. The responsibility of an organization to safeguard the professional and personal information of its workforce cannot be ignored; how you capture, access, use, protect, and eventually purge data must be a major factor in the design of your HR technology ecosystem. Data Governance must also include an understanding of how to achieve the most value from your workforce data while adhering to ethical and legal standards.
Technology Task Force: Application Environments
Surrounding the foundational elements are six primary categories of Enterprise HR System Applications:
- Service Delivery
- Workforce Management
- Workforce Intelligence
- Emerging Technology
- Talent Management
Creating and maintaining your organization’s HR applications ecosystem is a complex process, involving integration efforts, User Experience expectations, and workforce behavioral changes. These discussions are crucial when building your HR technology ecosystem.
Getting the Basics Right: Administrative Applications
Most organizations start their HCM application journey by deploying Administrative applications, primarily in the form of a Payroll solution—over 96% of our HR Systems Survey respondents have a Payroll solution in place. Most often Payroll solutions are implemented with an HRMS, but some organizations use a Payroll system alone—leveraging its basic data-capturing capabilities in place of an HRMS until their needs expand. Over 90% of surveyed organizations currently have an HRMS in use today. For most organizations, the HRMS sits at the heart of their HR and workforce data management needs, sharing data with multiple HR applications.
As organizations grow and become more complex, an HRMS becomes necessary to manage the regulatory and data management needs of their enterprise workforce; increasingly smaller organizations are finding it necessary to implement an HRMS. Organizations with a history of regional expansion or mergers and acquisitions often have multiple Payroll and HRMS applications in use to meet the needs of various workforces and regions.
The Benefits Administration application is also highly adopted, but often fully outsourced—through Total Benefits Outsourcing (TBO). In countries where Healthcare is not generally offered through employers, Benefits applications are still in use and may manage regionally required or culturally expected benefits such as housing, car allowances, or personal services offered as a benefit to the employee.
User Experience: HR Service Delivery Applications
When organizations have Payroll, an HRMS, and Benefits Administration in place, they naturally achieve some level of Administrative efficiency for their HR function, but as organizations increase in size and complexity they also need to consider the employee-facing elements of their HR ecosystem. Self-Service applications including Employee and Manager Self Service, HR Help Desks, Portal technologies, and other employee communication platforms are critical data collection and information sharing applications. Organizations that focus on the adoption of Service Delivery applications often see higher levels of employee engagement and system adoptions, increasing the number of people each HR administrate role can support. These applications are also significantly influenced by the trends for increased Mobile enablement and consumerization of HR practices.
Business-Driven Applications: Workforce Management, and Talent Management
Workforce Management (WFM) and Talent Management (TM) application adoption tightly connects with an organization’s business needs, although the initial adoption of these applications may be in response to a specific operational request. WFM tools provide operational oversight to areas such as Time and Attendance, Scheduling, and Absence and Leave Management. TM applications provide operational oversight for areas such as Recruiting, Onboarding, developing, compensating, and transferring critical talent within a workforce. Many of these WFM and TM requirements can be handled manually by smaller organizations, but quickly become system priorities for those managing large workforces, multiple projects, or fast growth. Although these two areas may seem separate in their focus, they work hand in hand for organizations focused on balancing business needs with employee aspirations—and are also tightly connected to employee Culture and engagement.
Increasing Value: Workforce Intelligence
Adoption of the Administrative, Service Delivery, WFM, and TM applications provides an organization with clear benefits in the areas of HR efficiency and process management. However, the real value of these systems can be realized in data analysis to provide Workforce Intelligence (WI) as HR data maps to business data. Further analysis can provide insights into workforce decisions that directly impact Business Outcomes.
Workforce Intelligence applications as a category is still in its infancy; it currently exists as a combination of enterprise platform technologies, embedded analytics solutions inside HR applications, and standalone data cleansing and analytics tools such as Microsoft Excel, report builders, or statistical tools. We also see a growing number of sophisticated dedicated HR/Business Intelligence solutions mixing services and analytics technology together to analyze and visualize large amounts of enterprise data. Some organizations analyze data directly in the various HR systems, while others extract data into other platforms or databases designed specifically for data analysis. These applications can be focused solely on workforce intelligence efforts or share space with other enterprise business analytics needs. These solutions can optimize current workforce intelligence efforts. Tools such as predictive analytics give insight into possible futures, visualizing levels of workforce planning based on scenario planning and benchmarking using an organization’s internal and external data.
No System is an Island: Connecting Data and Workflows
Surrounding the six Enterprise HR System Applications in the gray outer layer of the Blueprint are enterprise standards that play a major role in the success or failure of application investments. These standards interface with multiple Enterprise System Environments. HR solutions cannot exist separately from an organization’s Content Strategy, Data Privacy, Workflows, Work Models, Integration Strategy, Platform Strategy, Mobile Strategy, Network Security, Cyber Security, and Social Strategy. Connecting HR systems to enterprise standards allows organizations to seamlessly and safely embed HR solutions into everyday work environments.
HR technologies coexist in a larger ecosystem represented by the black outer rim of Finance Management, Workforce Productivity, Customer Relationship Management, and Vendor Management. These environments, where work occurs and additional workforce data is captured, require connections with HR applications to enable desired organizational outcomes. The blueprint contains interrelated elements, each touching a part of the other. This environment works best when considering the inherent connection points of an entire HR technology ecosystem—those connection points are as important as individual applications. The Sierra-Cedar HCM Blueprint can spark conversations on which interrelated elements to include in your organization’s Strategy.
To read more about HCM, download the 21st Annual Sierra-Cedar HR Systems Whitepaper.
About the Author
Stacey Harris is VP of Research and Analytics at Sierra-Cedar Research. Published since 1997, the Sierra-Cedar HR Systems Survey is the longest running, most widely distributed, and most highly participative research effort in the HR industry, annually tracking the adoption, deployment approaches, and value achieved from HR technologies.