Human Capital Management technology can help HR teams significantly improve operational efficiency and performance. But many companies are not realizing game-changing benefits from these systems. Here are three guiding principles companies should follow as they seek to maximize the returns on their investments in HCM technology.
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Your HCM System controls the trinity of talent acquisition, management and optimization – and ultimately, multiple mission-critical performance outcomes. Choosing the right solution for your organization….
Human Capital Management technology can help human resources teams significantly improve operational efficiency and performance. By allowing them to automate key tasks, providing seamless access to data and information, and facilitating the creation of analytics-based insights, HCM technology can enhance an HR team’s efforts to attract and retain talent, engage and communicate with employees, and streamline payroll and benefits processes.
But if HCM technology is so great, then why aren’t more companies realizing game-changing benefits from implementing it? The answer lies in these companies’ implementation processes, not in the technology itself. Too often, HR leaders approach these implementations as technology projects. Instead, they need to approach them as overhauls of business processes. Here are three guiding principles companies should follow as they seek to maximize the returns on their investments in HCM technology.
1. Plan ahead to ensure organizational readiness
Lack of organizational readiness before an HCM technology implementation is one of the main reasons companies end up disappointed with their systems. As we’ve noted, a company must view a technology implementation as a business process redesign. To effectively execute this business process redesign, HR leaders must lay the proper groundwork.
First, consider the selection of the technology platform. When a company compares different platforms, it should focus first and foremost on how the technology will help it achieve its sought-after process improvements and meet its business goals. When solutions were largely on-premises, it was easier to customize features and functionality. Today, however, technology vendors deliver more standardized solutions in the cloud. If an organization completes proper due diligence during the selection process, most of the features it needs are going to be in the HCM platform it selects. So, a fixation on features is largely fruitless. Instead, HR leaders need to more heavily weight a system’s usability. Leaders should be asking things like:
- Will the system help us improve talent acquisition efforts and even automate some of these processes?
- Will users from across the company – beyond the HR team – be able to interact with the system easily?
Reorienting the focus away from features and functionality and toward usability and business goals will help HR leaders select the right platform for their organization’s needs.
Another key piece of organizational readiness is securing executive support. HR leaders must make a clear business case for the technology and outline the expected benefits of the project to company leaders. This effort will help the HR team recruit an executive sponsor who can publicly make the case for the initiative across the organization, which will help smooth implementation.
2. Focus on processes before implementation
If an HR team does not redesign its processes alongside the technology implementation, it will severely limit the benefits it can realize from its new HCM system. Essentially, the team will plop a new technology platform on top of outdated processes. To take full advantage of these modern systems, it’s crucial to also modernize business processes.
Start with thorough process documentation, which includes outlining the HR processes the team uses currently. Then, determine how to best leverage the capabilities of the new system to complete HR processes more efficiently and effectively. Performing this thorough audit and charting out new processes before beginning a technology implementation will pay dividends once the company goes live with the technology. By investing more time in the planning and process redesign phases, the company will reduce the amount of post-deployment changes it will need to make. The company will also make the transition easier on its employees.
Learn More: How to Optimize the Employee Life-cycle with HR Technology
3. Manage change effectively
A critical determinant of the success or failure of an HCM technology implementation is how well HR leaders manage change. Embracing new technology and processes requires employees to alter behaviors in sometimes disruptive ways. Therefore, HR leaders must offer both thorough technical training on the ins and outs of the new system as well as immersive training on the new business processes.
Companies must be willing to devote significant time and resources to this piece of the project. After all, for the team to realize the anticipated efficiency gains, all employees need to embrace the new processes and technology. HR leaders should secure employees’ buy-in by making clear that they made the process and technology changes to improve the team’s productivity and free employees from rote, manual processes. In the end, these changes should enable employees to perform higher-value – and ultimately more rewarding – work.
After all the effort HR leaders put into preparing for implementation and then carrying out the implementation, it’s crucial that they finish the job by devoting time and energy to effective change management.
Run toward the transformative benefits of HCM technology
The fact that some HR teams fail to realize the full benefits of HCM technology shouldn’t scare others off. HCM technology today can supercharge an HR team’s effectiveness – but only if HR leaders lay the proper groundwork and view the technology as a key component of business process optimization. The companies that do prioritize organizational readiness, process refinement and change management will enjoy smooth and rewarding implementations – and capitalize on the many transformative benefits of HCM technology.
Learn More: 3 Ways HR Technology Builds Workplace Trust
Bill Larkin has extensive knowledge of the Human Capital Management (HCM) technology industry and its effect on business results. Bill has assisted HCM technology vendors in improving their solutions and has helped client companies improve their HCM delivery models. He possesses a deep level of understanding of the top HCM providers in the market including Workday, Oracle, SAP, Ultimate, ADP, and Ceridian, as well as many other mid-market services providers.