Putting HR in the Digital Driver’s Seat
It’s time to stop outsourcing digital HR transformations
Shared service functions like HR, finance and supply chain have been reliant on third parties like IT, software vendors and system integrators to lead them through the delivery of their digital change and transformation initiatives. It’s understandable from an historic perspective. However the times have changed. HR teams are now being faced with unprecedented challenges that are due in large part to exponential and perpetual digital change and shrinking working populations. In order for HR to continue to perform and to stay relevant and responsive under these conditions, they must develop their digital capabilities and, ultimately, get behind the wheel of their digital driver’s seat.
An over-abundance of technology-led (vs. business-led) digital transformations helps explain why only 30% of digital transformations succeed in meeting their target objectives of improving business performance and sustaining those improvements over time. So why hasn’t HR been stepping up? Digital transformations have historically been about implementing technical solutions to solve HR business problems like high volumes of transactional processes that carry high administrative overhead. Examples include screening job candidates and processing job changes. This technology-centric approach to digital transformation is woefully insufficient and outdated for today’s complex realities. Today, digital transformation is about the continual realignment of the operating model, technologies, and organizational culture to more effectively deliver business value and employee experience (S. Sen, Digital HR Strategy). This more complete and current definition of digital transformation highlights why HR needs to be leading these business-critical initiatives. Third parties simply do not have the cultural, operational or business background that HR does. They still play a critical role in the transformation process today, but in more of a supporting capacity. For example, IT support is particularly key for providing:
high level technology and application strategy
platform services like cloud computing and storage, developer tools, system interfaces and APIs
QA and testing
data governance, migration and replication
System integrators are key for providing:
leading practices and staff augmentation
solutioning support for complex problems
configuration and custom development services
training and coaching
Let’s now focus on what HR can do to gain more control of their digital destiny.
Four ways to put HR in the digital driver’s seat
In order to put HR firmly in the driver’s seat of their digital change and transformation initiatives, there are four core digital capabilities to develop:
Strategy and Governance. HR needs a clear digital vision that helps shape well-defined digital governance and operating models (see How HR Organizations Can Improve Their Digital Proficiency — DigitalHRx). A well-defined transformation strategy, program and value realization plan, and multi-year roadmap all help to provide clear direction for transformation teams. To help deliver the program, a dedicated digital project management office (PMO) and resource plan ensures agile and responsive teams are in place. Legacy methods and models designed for stable conditions are replaced with more modern operating models and highly capable and agile teams that are better organized for constant change and uncertainty. Valued partners and contingent workers are easily integrated within these cross-functional teams ensuring the right expertise is available when and where it is needed.
People & Culture. Strong, tech-savvy HR leaders, together with commitment and support from the CEO through mid-management, are foundational to any digital HR change and transformation initiative. Change enablement capabilities are in place to fully engage and empower stakeholders, end-users and sustainment teams for the future state. HR teams have a digital and service-oriented mindset, and are obsessed with delivering a great employee experience. Finally, an open and innovative mindset guides the team's efforts, and effective risk management and risk tolerance keeps them on track and provides the psychological safety they need for success.
Process & Design. Successful transformation programs focus on employee experience well before technology is even factored in. Digital HR teams use design thinking and value-centered design tools and methods to analyze current experiences across the employee lifecycle to understand what’s working and what’s not. These discoveries are then translated into business requirements and target process maps that can be used to vet the technical solutions under consideration. Ultimately the team is driving towards a solution that ensures great employee experiences and interactions that are intuitive and seamless. Following a fit gap analysis in which gaps are identified and alternatives weighed, a final technical solution design can be presented for executive approval. Two additional outcomes of process and design efforts must be included. First, a well-defined target operating model (TOM) - how people, process and technology components will work together in the future state. Second, ‘Smart Touch’ (as opposed to ‘High Touch’) service models that provide the right level of human and automated support options at the users’ point-of-need.
Technology & Data. Digital transformations require a business-driven approach. Adopting this approach requires an HR technology strategy that is informed by business priorities and target outcomes. The strategy will help ensure solution and technology architects land on technical solutions that are relevant and drive appropriate business outcomes. Key technology and data components include a disciplined intake process, a focus on digital leverage points, an integrated digital HR platform, an HR application strategy and roadmap, and a solid data governance model. These components all help ensure the technology and data teams deliver the outcomes HR needs for success.
It will take time for most HR organizations to fully develop these core digital capabilities. They will therefore need to continue to lean on their partners until then. But by developing their digital muscles, HR organizations will be in a much better position to navigate their digital change and transformation futures - futures that will continue to challenge them on a continual basis.
For more information on how to put HR in the digital driver’s seat, contact Kevin@DigitalHRx.com