HR technology too often fails to deliver an impact for organisations.
Of all the ratings in the HR Realities research, one of the most shocking is the inability of HR systems to deliver a positive impact. Across all HR silos, only 24% of customers report that their suppliers always or frequently deliver a positive impact on their organisation. The majority, a massive 76% only occasionally, rarely or never feel their suppliers create a positive impact.
Anyone involved in HR systems should be under no illusions. Caveat emptor – buyer beware.
There are some hotspots of satisfaction and dissatisfaction. Albeit, these are marginally less bad for performance management and learning in a set of very disappointing results. What does stand out is the inability of core HR systems to get anyone to rate them as always having a positive impact. How much this is a matter of core HR being perceived as a ‘hygiene’ system more than a business driving system is unclear. But, it does potentially have implications for customers who are looking to be seen as a strategic business partner by their stakeholders. Especially where core HR systems are central to their HR agenda.
The apparent inability of HR technology to consistently drive business impact is a risk to how your stakeholders will perceive you. Creating a positive impact through HR technology can be hard to do. And based on these results, you will need to invest in managing change and perhaps even your supplier if you are to succeed.
Interestingly, there are some telling sub trends around the type of hosting. The HR operations approach and how standardised the HR solutions architecture are both affect customers’ perception of impact.
Cloud solutions marginally lead the way in driving positive business impact
Core HR systems hosted in the Cloud more frequently drive positive impact than those hosted either on-premise or privately – marginally at least. But the biggest question is, where is the highest risk of rarely or never having a positive impact?
From the research, privately hosted core HR systems are the riskiest based on our respondents’ feedback. 65% of privately hosted solutions rarely or never have a positive impact.
In our view, this bias from privately hosted systems to the Cloud, is the consequence of legacy systems. Whilst Cloud is always current – on-premise and hosted solutions are often older and have lower levels of innovation. And this often stifles longer term impact. But either way –this is hardly a ringing endorsement for any HR solutions provider and particularly core HR solutions.
And as much as suppliers need to raise their game – buyers also need to be more aggressive in setting out a strategic business case. More importantly though, if they are to drive the tangible impact they are delivering for their businesses they also need to focus on a transformational HR agenda over a transactional one.
Customers feel they get the most positive impact during implementation
There is nothing like being ‘active’ in change to believe that you are making a difference, and perhaps that is why those organisations that are currently implementing HR systems rate the impact of HR systems most highly at that time. At a peak of just over 50% – organisations in this phase of their adoption of HR technology report always or frequently making a positive impact.
That this feel-good factor wanes quickly should be a concern, however.
After a year, that feel-good feeling appears to have dissipated; to the extent that less than half that number (20%) have retained their positivity about the systems business impact. What seems worrying is the inability of HR to be able to recognise business impact over a longer period. This you would assume, should be the basis of the business case for a new system, and more importantly, provide ever increasing value over time and impact (if measures of success were ever set in the first place).
Sadly, delivering incremental value does not appear to be something that seems to be at the heart of deploying HR systems – when it should be one of the key drivers behind the choice of solution.