In June, I attended the world’s largest HR convention, SHRM's 2017 Annual Conference & Exposition, which was held in New Orleans. It was a great opportunity to meet clients and business partners, and to spend time talking with HR professionals about their digital transformation initiatives. HR is an area where digital transformation, or HR transformation, has been moving at a rapid pace for the last few years. For instance:
- On-premises solutions have been replaced by easy to learn and deploy cloud technologies.
- Workforce analytics (HR big data) has led to improvements in hiring, employee engagement and retention.
- Business process automation has enabled HR to focus on people and not administrivia.
Shifts in customer and employee expectations, emerging technologies and new disruptive business models will continue to force organizations to adopt digital transformation strategies that empower them to be more agile, people-focused and efficient. However, digital transformation is an ongoing journey that, without proper planning and execution, can be a rough ride.
At SHRM 2017, I heard two common themes among those HR professionals struggling with the digital transformation of business processes, both of which could easily apply to any department or organization:
- Technology quagmire
- Fixing versus transforming
Legacy technology, in-house solutions and disconnected ecosystems are the enemies of digital transformation.
The most common problem with legacy technologies is that most were not designed for the way we work today. Mobile, anytime, anywhere access and intuitive design were not important when most legacy systems were developed, but are requirements for digital transformation.
In-house solutions typically have the same problems as legacy systems, but limited functionality can be added to the list. These solutions require a dependence on the IT department, which typically focuses on improvements to infrastructure and security, with technology companies dedicating many of the department’s remaining resources on areas that grow the business and generate revenue. With IT stretched so thin, an in-house solution means HR will have to lower their expectations.
Consequently, when IT sets out to create a solution for the HR department, chances are that the deployed technology will lack the features available in service provider solutions. In addition, today’s businesses and markets can shift rapidly and require multiple changes to technology, leaving IT too busy to continually modify and enhance their original development.
Whether it is HR or the entire company, the notion of one system that does it all is not realistic; information silos restrict information access and workflows. For digital transformation to succeed, the appropriate technologies must be components of a connected ecosystem. Legacy systems containing vital information should be integrated into new systems of engagement to provide customers, employees and vendors greater access to information while allowing processes and business models to be transformed.
Fixing Versus Transforming
When the objective of a digital transformation strategy is to optimize a business process, it is important to focus on the end goal and not only on fixing what is wrong with the current process. For example, in many large organizations, HR Shared Service transformation strategies include increasing efficiency, improving compliance and security, and increasing the speed information can be accessed. However, as the amount of born-digital documents and information increases, paper can become an obstacle to process optimization. If the focus turns to eliminating the paper rather than changing the processes impacted by paper, the wrong solutions may be put in place.
Case in Point
One of the companies I spoke with at SHRM 2017 needed to reduce the costs of federal and state regulation compliance while shortening their response times to unemployment claims. Paper flowing through business processes was negatively affecting improvements to each area. HR had recently implemented a new HRIS that claimed to eliminate paper but, while physical files were reduced, problems persisted because document uploading and appropriate access authorizations were clunky at best.
As an additional concern, the company had a content management system used by other departments that they turned into the digital document repository for any employee documents not stored in the HRIS. With two systems to check and zero tools to proactively identify and correct missing documents, HR continued to have a compliance burden when ensuring that all the required documents were in place for every employee.
In the end, neither of the applied systems provided a solution to efficiently sharing digital documents with auditors or litigators, so responding to audits and unemployment claims continued to be slow and inefficient. Moreover, while the amount of paper was reduced, process transformation to achieve the desired goal failed.
Digital Transformation Success
There are many business activities other than HR, such as marketing, operations and customer service, where digital transformation is required to take full advantage of technology advancements and keep up with customer and market demands. A holistic look at processes and technologies with a goal of continuous optimization across departments, business ecosystems and stakeholders is critical for digital transformation to succeed.