business transformation

Is your HR Technology adding value?

Most of the time, if you ask any HR leader to explain how HR technology is contributing to the achievement of business goals you get a somewhat perplexed expression, supported by an eloquent explanation which suggests it’s being conveniently ignored because it’s too difficult or not practical. Alternatively they reference the vendors marketing rhetoric which promise share-price improvements that would get Warren Buffett excited!

But HR is changing

It’s moving out of the administrative and transactional mould that has defined it for decades, and whilst the transition is often very slow and painful to watch, there are many organisations whose executives are maturing in their understanding of the unique value that HR functions can offer, and their direct contribution to business goals and strategy achievement. HR professionals can’t hide behind the mystique of psychology anymore; they need to show direct linkage from what they do and the outcomes it creates, including the role of HR Technology.

HR leaders are far more business savvy too, they will rattle off their business goals, they are succinct in articulating the meaning of value for their organisations, they understand cost, growth, quality and risk drivers, and they are familiar with industry and global issues, opportunities and constraints.  So what’s the problem – why are so many HR leaders resistant to show how the performance of HR Technology has or could advance the business objectives and strategies?

Addressing the problem

Some of the answer to this question may lie in previous bad experiences with “template” measurement frameworks such as the Balanced Scorecard. These tools are often introduced as off-the-shelf “best practice” which generally lead to disappointing outcomes. It’s the one reason that I loathe HRM software vendors pushing a “best practice” mantra. HR leaders wrongly believe the hard work related to measuring their HR Tech value contribution has been done for them. It can never be true – your objectives, environment and how you want to achieve your business outcomes using HR Technology are absolutely unique. You need to do the hard, detailed work yourself.

Another reason is simply lack of know-how and practice. Most HR professionals have a social science background which engenders greater qualitative rather than quantitative focus. That’s not an excuse of course, learning how to build a causal-effect model which shows where HR Technology is leveraged, is not difficult~ it just takes some practice and adherence to some basic principles such as:

  • Making sure your selected measures are strategic and aligned to company goals
  • Not making assumptions about the cause-effect relationships. You need to test it and prove its validity
  • Setting realistic targets, not everything needs to be 100%
  • Having clear ownership of the measure. Someone who is passionate about achieving a business outcome, and is constantly tweaking the framework
  • Being practical – don’t overcook the requirements or the data needed
  • Telling your story. Contextualize the results and explain what it means in business terms

By way of a simplified graphical example, I recently had the opportunity to help a client think through a cause-effect model for “Innovation” – one of their strategic business objectives. The HR director wanted to explain how their HR technology was directly contributing and supporting this objective. When we finished the model, it became very easy to explain how this would be achieved. A key learning for the client was to link the HR Technology to “drivers” rather than the performance areas.

I’ll point out again that proving the “cause-effect” (performance areas in graphic below) is critical to establishing credibility. For example, my client had to validate that “Empathy for client’s needs” really did cause “Enthusiasm & Engagement” in their environment. Once that was established the drivers for performance were identified and agreed, and HR was able to determine which HR Technology was required and how it would be used to deliver measurable outcomes.

exampleOf course there is a lot more work and involvement from other business functions behind this simple graphic, but hopefully it’s apparent that with some careful thought and focus, the real value of HR Technology can be measured and explained. Your next business case for HR Technology funding should be much easier to achieve if you have this in place!

THERE’S MORE TO SAAS THAN SIMPLICITY

written for and originally published in Inside HR magazine (Feb 2015)

Despite the simplicity and effectiveness of new SaaS tools, maximum value will only be realised by making fundamental changes to key areas in business, writes Rob Scott

You could be forgiven for thinking the relative simplicity and user-friendliness of modern HR SaaS solutions need less business transformation effort to embed them effectively into a HR and business environment. The oft vendor pitch of having a newly acquired SaaS HR solution “up and running” in a very short timeframe is very appealing to buyers, particularly if they’ve had prior ERP project experiences encompassing flashbacks of complex and error-prone planning, designing, testing and cut-overs etched into their long-term memory.

However, the lure of a swift, pain-free and cost-effective implementation can mask the very real need for a transformed business environment that supports the new SaaS HR solution. The HR SaaS value and business benefits won’t be achieved by simply switching on the software – this is insufficient and must be augmented by making fundamental changes in at least six key areas. The honeycomb below portrays the facets of effective HR SaaS value creation, and as you can see, there is more than “simplicity” at play.

What’s different about HR SaaS?
I am often asked whether HR SaaS solutions are the same as older on-premise solutions, but “just in the cloud”. While functionality is often similar, the principles behind SaaS design, delivery and value creation are fundamentally different and will require a different approach and focus to on-premise projects. As you read the honeycomb elements (see graphic) the obvious “cloud dilemma” is the disparity between the time to implement the SaaS solution (usually four to 12 weeks) and the time required to transform the business. The latter takes much longer and requires careful and advanced planning.

SaaS value

Ownership: On-premise HR solutions are generally owned by the IT function because of the inherent technical complexity and association to hardware; however, HR leaders are becoming the primary SaaS buyer and must therefore take primary accountability for the solution. For many HR lea
ders this will be foreign, but the ownership change is a key driver of value creation.

Skill: HR functions must build system administration (configuration), data management, project management, analytic, social media, mobile and gamification insights in order to appreciate, manage and leverage the capabilities of modern HR SaaS systems. These are not complex skills to learn and should ultimately become standard knowledge areas for all HR staff.

Behaviour: Modern HR SaaS solutions are designed around regular interaction and collaboration with other employees. These are not transactionally dominated systems, but rather tools that remind, inform, connect, advise, analyse, predict, gather, share and enable people’s effectiveness in unique ways. Interventions will be required to activate these new behaviours.

Relations: HR must actively co-ordinate relationships between the CIO, IT function, marketing, finance, the vendor (who owns and houses the software) and external support services. These relations are both strategic and operational in nature and dependent on the new HR skills noted earlier.

Practices: Gone are the days when you apply updates to your HR system annually. SaaS solutions are automatically updated three to four times a year, meaning HR will be accountable to lead a review (with support from IT and others) of new functionality and determine if and how it will be used. SaaS solutions offer “choice”, and HR must think beyond the concepts of standardisation as a best practice.

Leadership: Executives and senior managers dictate organisational maturity. Without the right level of maturity in place, HR is often fighting an uphill battle of acceptance, which will result in SaaS tools being sidelined and unlikely to return business value.

SaaS tools are in many ways a saviour for HR. The simplicity of these new solutions is offering organisations great opportunities to rethink people engagement and value generation using modern technologies. HR must step up and embrace this with understanding and commitment.

HR SaaS: what you need to know

  • SaaS HR software solutions are fundamentally different from earlier on-premise solutions and require new business transformation initiatives to get maximum value.
  • SaaS HR solutions are much simpler to set up and use, however, this simplicity and ease of use should not cloud the important business environment changes required to support these tools.
  • Taking ownership and accountability for the HR systems is no longer technically biased, it has moved to a functional level predominantly, which must be led and co-ordinated by HR.
  • The IT function remains important for technology strategy, integration, standards, security and quality control of all systems, but HR must be accountable.