It is HR’s time in the sun. Technologically-speaking, that is.
While the past several decades have delivered ever more sophisticated capabilities to businesses in the form of software, analytics and transaction processing tools, HR was always a bit of an afterthought. Oh, there was the PeopleSoft wave of the 90s and even an ongoing flirtation with
’employee self service’ which was really aimed at getting the employee to do the data entry so that HR didn’t have to hire clerks to do it. And while these systems—often closely tied to financials because the real goal was to get payroll right—provided some benefits, they were mostly administrative, not game-changing.
It’s a new era for technology in HR. HR tech is arguably one of the hottest categories in enterprise software (note Oracle’s acquisition of Taleo, SAP’s acquisition of SuccessFactors, IBM’s acquisition of Kenexa, and the white-hot $627M Workday IPO ). Why is it happening?
The Global Economy is now People-Driven
Since the industrial revolution, until about the middle of the 20th century, the economy was characterized by, and focused on improving production. And that meant producing something, a physical good. Today’s modern economy has experienced a radical shift. While making things
still matters, you’ve no doubt noticed that your car now comes with a good dose of software and even your coffee can now be purchased by waving your phone at the counter at some Starbucks. These products and experiences require more than just production and an efficient supply chain. Increasingly, all types of products are surrounded by, and in fact dependant upon, technology and services to deliver the ultimate value to the customer. This requires people to conceive, to design, to engineer, to market and to maintain; and those people need to be smart and skilled. In this economy, the ability to attract talent and to retain it becomes an important competitive advantage. So does the way you engage with your employees to create a high performing culture, and the way you compensate them to reward the performance that drives your success.
The Cloud Really is Good for Businesses
Ahh the cloud. It is a popular word and concept this year. It’s about a lot of things, but chief among them for businesses (and for HR and Finance) is that it moves the pain of managing software back to the vendor and away from the customer. The customer still has to figure out how to manage their processes, but the technical challenges of the past several decades of enterprise software, along with the multi-year, multi-million-dollar implementation costs, are largely eliminated with Cloud applications and services.
The Last Frontier is HR
This sea of change in technology has in turn spawned a brand new era of modern HR applications, now under the heading of Human Capital Management software. Broadly this category includes applications for Talent, Learning, Core HR and Performance. This breaks down further into apps for recruiting and engagement, employee collaboration and social performance management, for online learning and video interviews, for annual reviews, for creating compensation programs, etc. etc. What this points to is a realization that in today’s economy, there is enormous strategic value in these people-centric business processes. By embracing this modern era of HR technology to maximize the value of talent to an organization’s
success, human resources leaders have the opportunity to move beyond compliance and administration and to actually sit at the table with CXOs.