Scoping today’s HR IT strategic planning environment

Profile picture for user brianssommer By Brian Sommer August 4, 2021
Summary:
Practical tips on building an HR IT strategic plan.

Today, it’s really hard to plan and prioritize where HR should be going vis-à-vis HR technology.  The technology landscape has shifted, a lot, lately and new innovations are pouring out of the woodwork, too. At the same time, some HR teams have discovered the inadequacies of their older, pre-COVID technologies and these need to be either replaced or reimagined.

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There are also a number of new requirements that have emerged recently. There were one set of ideas pre-covid, another during this pandemic and a third set of emerging requirements forming now.

HR leaders definitely have a prioritization problem today. For a function that is often starved for IT and capital (to upgrade their technology), there may not be enough budget, talent, time or bandwidth to do all that HR needs re: a major technology upgrade. So, how should HR proceed?

The traditional HR IT strategic planning process

Historically, a lot of the planning focus was centered on improvements to the status quo. Planners would look at what HR tasks still required automation and which systems needed replacement due to technical debt, obsolescence, bad vendor behavior or changing customer technical architecture requirements.

This was often as far as the plans got because HR rarely got the capital and IT resources to do more than this.  And, even in this environment, HR also had to deal with lots of missing, broken or incomplete integrations/interfaces. For example, I’ve dealt with integration issues between Payroll modules and a client’s General Ledger since the 1980s and I have yet to find a firm with a fully automated and accurate integration here. At one recent client, this messed up set of integrations caused the Accounting Department to spend approximately 1/3rd of their time every single month preparing the journal entries, calculating accruals, processing reversals and correcting scores of errors.  It’s hard for HR to justify the acquisition of new, bleeding edge technologies when something as basic as Payroll to General Ledger is so massively broken.

Integrations and HR are a big deal. It’s not uncommon to find, even in a modest-sized firm, 100 integrations within the HR toolset. Every benefit provider, insurance carrier, payroll service, etc. needs an integration. And don’t forget all of the connections to/from the time tracking tools, the recruiting software, job boards, etc. Every best-of-breed HR solution needs an integration and it requires HR IT people to maintain these over time.

It is for these reasons that the traditional HR IT Strategic Plan is often long on ambition but stuck in the here and now.  If the plan can only focus on slight improvements to the status quo and on integrations, it won’t propel HR far at all and HR will not contribute significantly to the advancement of the firm.

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The expanded HR IT strategic planning environment

Unfortunately, all of the radical changes in business, business models, workforces, work locations and more are impacting the HR IT game plan in material, substantive and profound ways. In short, HR will need to do more to its systems than simple upgrades and integrations. HR will likely need all-new technologies that:

  • Serve more than just HR team members
  • Utilize new kinds of information
  • Apply new technologies (e.g., AI/ML) against big datasets
  • Solve all-new problems (e.g., alumni outreach programs, new business models for the company)
  • Assist the firm in its post-COVID transition
  • Reskill existing employees
  • Acquire new kinds of talent and skills
  • And more

So, the HR IT Strategic Planning process has gotten tougher. There are several new groupings of items to consider when developing a new plan. One of these involves the assessment of HR technologies to help the firm remain competitively relevant. You can’t win the war for talent if your talent acquisition systems are non-existent or detrimental to your recruiting brand. You also can’t win the talent war if you have no mechanisms for tracking and engaging with alumni, students and other pools of potential (re-) hires. You might not get the best and brightest out there without a quality candidate relationship management solution and the processes needed to make it succeed.

Competition and competition for talent will escalate the HR technology arms race. The challenge for HR leaders is how to do this while also making those necessary upgrades to existing HR technology (see above).

Some HR leaders might be tempted to develop plans to get their organization to a modicum of competitive parity when they should be striving to achieve competitive advantage. The difference between the two standards is notable. Competitive parity just gets your HR organization to where many of your competitors are today but it’s a fleeting target as competitors will undoubtedly continue to advance their capabilities. By the time your firm implements its plan, the competition has already moved ahead to a new level of competitiveness.

And if competitive pressures weren’t enough, innovations in HR technology are exploding. Today’s innovations are less about basic HR transaction processing (e.g., paid time off requests) and more on the use of big data, algorithms and more. These net-new applications are in the white space that exists between, around and adjacent to traditional HR applications.

Identifying these new tools is often difficult for HR IT planners as it requires one to be market savvy and cosmopolitan. You can’t very well include new applications/capabilities into an HR IT plan if you don’t know what they are.

The new HR IT infrastructure

Another major planning focus has to be on the HR IT infrastructure itself. The pandemic certainly exposed a number of problematic HR technologies especially those that made work from home (WFH) a challenge. For this reason, a number of employee/manager self-service applications are now mobile and cloud based. Periodic payrolls are giving way to on-demand pay technologies.

Businesses expect their HR technology to be relevant for the world of work today (not yesteryear). Any great HR IT Strategic Plan must have a point of view regarding:

  • Use of public cloud
  • Highly secure HR data and applications
  • Product extensions, no-/low-code capabilities
  • Role of open-source utilities
  • How scalable (up and down) solutions and vendors must be
  • How big datasets will be processed (and where)
  • The role of hyperscalers and HR
  • How technology will fight ageism, improve diversity, etc.
  • Specific risks and how each will be mitigated
  • And more

The people side of the HR IT strategic plan

No plan is actionable if it doesn’t consider the people that must execute the plan and those who will operate within the changed processes. There are two principal groups that must be addressed as part of the plan (and a number of tangential groups, too).

The HR function will likely get impacted by the effects of a new HR IT strategic plan. This is especially the case if the plan advocates for the use of technologies like robotic process automation (RPA). RPA not only handles repetitive, common transactions automatically, it also learns about non-standard or rarer transactions so that future occurrences of these can also be automatically dealt with. The effect of wide-spread use of RPA in HR means that HR personnel will be less and less required to deal with mundane transaction processing. In that case, what should HR team members be focused on then? The HR plan must identify the higher value-added tasks and analysis that team members will be attending to and what work will be automated away.

Today, HR teams needs time to understand the ethics of using specific AI-based tools. Hard decisions need to made to ensure that AI/ML/algorithms are not misbehaving or acting in a discriminatory fashion. Rising regulatory actions and litigation threats also mean that HR must have team members that fully understand these new tools and how they are configured.

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Like RPA, chatbot technology can also eliminate (or automatically handle a) number of repetitive tasks. For example, employee questions re: benefits, time off requests, etc. can be handled via chatbots thus freeing up HR workforce time.

An HR IT strategic plan should also address who and how the HR systems will be supported. While corporate IT may assume this role, it isn’t always the case. IT may only want veto rights on some infrastructure decisions. IT might want to outsource some of this function. And, HR might want to keep much of this under its direct control.

Whatever the support plan for HR IT is, it must address:

  • Disaster recovery requirements
  • Security protection especially for sensitive personnel data
  • Data backups
  • Software updates and processes to maintain integrations
  • Application maintenance/service tickets/support roles
  • Life cycle costs
  • Integration with critical IT and OT systems
  • Etc.

Along with the previous people issues, the HR IT strategic plan should consider these tangential groups:

  • The rest of the company’s workforce
  • Regulators
  • Limited users (e.g., contractors, alumni, recruits)
  • Corporate accounting

An HR IT strategic plan that exists only to make HR personnel more productive/less frustrated is insufficient. New solutions should boost productivity across the firm. New solutions should elate (not frustrate) non-employees, too. You can’t win the war for talent if your recruiting apps are archaic, ugly, time-consuming and painful for jobseekers to use.

All of these non-HR perspectives should help inform what the new solutions should be and how they should serve each constituency.

My take

A solid HR IT strategic plan can take weeks or months to produce. This article just scratches the surface regarding the issues that must be considered. The best of these plans will require input and insight from many individuals. It’s not a back of the napkin effort.

I’ll be addressing this and other related matters in a keynote this week. It’s the Q&A that will follow that I’m most interested in.  If you’re not on that talk, I’d still love your comments/suggestions.