The Business Case for HR Digital Transformation

You work in your company's corporate HR function. You have worked on a large RFP for a new HR platform and you have asked the business, most HR business partners and engaged with procurement and IT. Many HR partners have worked in other companies and have good experiences with different systems and vendors. You have spent months gathering requirements. You have been extremely thorough. You have engaged with an experienced independent advisor who has consulted other companies in your industry before with the same situation as yours. After the final review, you are now about to email the assigned procurement colleague and ask him to click "submit" on the RFP that is about to go out to 5 renowned system integrators.

Then your CFO calls you - unexpectedly - on Teams (with video on), and she asks you:

"I hear we are buying a new HR system. What is the value of this

can you tell me " ?

Slightly baffled (and maybe honoured to finally make it to the C-level?), you tell her that you have not yet gotten the final fixed prices but that you are asking 5 well known players for their estimates - and then you can tell her the price. And you finish off by proclaiming:

"We really need this new system to align HR processes in our three recent acquisitions as well as reduce costs for running multiple loosely coupled IT systems in parallel. "

Now, high costs and complex, labour intensive processes are certainly noble causes to address. And successful attempts to do so have resulted in lots of acknowledgement and many promotions throughout the history of human resources. But today, your CFO will not be that easily impressed. Instead she asks you:

"What will this new system do for our company ?"

Not just for "your company". Not just for HR and IT, but for our company. Big difference between buying something for HR versus something for the company. And really underpins the old saying that HR is not about HR, but about the company.

After thinking about this you ask the CFO for advice. You also ask her to help you secure a meeting with your COO, because if anyone knows the organisation, business processes and the operations it is the COO. The challenges that the COO faces are the exact same challenges that you in HR should be addressing, from a people perspective. So your CFO helps set up a (virtual) meeting with you and the COO and sits in.

This meeting can take many directions. But hopefully during the meeting you gain a more holistic understanding of what the company needs. Where you are heading. What lies ahead. How the markets are changing. Competition is driving you to invent new services. And that some of the new services requires a lot more R&D than before, but that it has been approved by the board of directors. And that the people needed for this R&D are not easily found, because your company will be inventing entirely new product and service categories.

To give some back, you can tell the COO about some KPI's, despite loosely couple systems that you have been able to gather over the course of the last 6 months. That we have an ageing workforce in certain parts of the organisation. That we have promotion practises that seem to have had a negative gender bias in some regions. That 40% of our most experienced colleagues with +10 years tenure are approaching retirement and that this will result in a loss of knowledge that will hurt your productivity.

So, both of you gather new information and knowledge. You now know more about where your organisation is heading and what the organisation needs. The functional areas that are likely to have big changes and that you will need to look at hiring new types of talent and look at different onboarding, diversity and inclusion programmes. And that a senior policy needs to be revisited to make your company an attractive place. But at the same time also look at some job roles that you no longer need, and how you can approach this with an approach that is aligned with company values and integrity. With this knowledge in hand, you are ready to engage in a leveled, meaningful dialogue with your CFO, and now it is your turn to call her (unannounced, 7:30 AM on Teams) and explain how you think the investment will be a cornerstone in supporting your company strategy.

This all leads back to the good question that your CFO asked. And you now know better than before that a ROI is not just about the cost and savings, but also that it is not just about the price but also the value. HR can support the business much more than before. It requires HR to speak business language, to understand the business processes and define themselves not just in supporting the driver looking through the rear-view mirror.

A simple yet famous quote attributed to Warren Buffet goes something like this

"Price is what you pay; value is what you get".

This is ever more important and all so much in HR digital transformation. Today, HR has a potential to support business operations much better than any time before. Done right, HR can be back in the drivers side and not sitting in the passenger seat (giving good advice that is often overheard by the driver) or the back row complaining about the decisions that the driver makes. Of course, HR shall not be business domain experts - leave that to the business - but they will need to understand the business in order to help the business the best way possible. That is the noble raison d'etre for HR. No more. No less. The business case for transformation is not just about cost-cutting and HR process effectiveness - it is more so about busininess benefits, effectiveness and strategy support.

If you have any comments please leave them below or send me a direct message.

Erik Ebert, GP Strategies is an experienced HR transformation advisor with a 25 year agile track record within professional services covering all major regions and industries. GP Strategies is a longtime trusted partner of Fortune 500 companies within business process improvement. We're at our best when helping clients achieve their best. Web: www.gpstrategies.com