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The Case for an HR Technology CoE

Best-in-class user experience, organizational agility, talent attraction and retention and predictive analytics. These top the list of strategic priorities for today’s HR leaders and senior executives.  Technology is a key enabler to making these aspirations a reality – provided companies have the right resources leading the charge. In a recent ISG survey, 46 percent of respondents indicated they have established an HR technology center of excellence (CoE) responsible for HR systems. This number is on the rise as more and more companies realize the importance of having leadership and governance in place to drive their HR technology strategy and achieve their strategic goals.

Organizations creating an HR Technology CoE will gain the following benefits:

  1. Establish the right decision-makers. As on-premises platforms become outdated, companies are making large investments of money and resources to purchase and deploy human capital management (HCM) software-as-a-service (SaaS) systems. In the past, decisions around which HR technology platform to select have been made by IT professionals, who often don’t have line of sight to the strategic priorities of the HR function, and senior HR leaders who are close to the HR strategy but removed from the day-to-day operations of HR. Although these groups are key stakeholders, they should not be the sole owners of HR technology decisions. To achieve the best possible outcome for your organization, decisions about what technology to select, when and how to implement, and what features and functionality to deploy should be made by HR professionals who understand both the strategic vision and the operational workings of the HR function. These individuals are best positioned to translate the needs of the business into technology solutions and collaborate directly with IT on key technology selection and deployment decisions. Bringing these resources together into an HR Technology CoE creates a structure in which they can take a proactive stance around establishing an HR technology roadmap for your organization and continue to drive it forward.
  2. Align to the evolving HR technology support model. The nature of HCM SaaS solutions has redefined the HR technology support model. SaaS solutions demand that organizations keep up with system maintenance and deploy new features on a regular cadence. And while this remains a shared responsibility between HR and IT, a heavier weight of this responsibility has shifted to HR. Additionally, SaaS platforms are designed to enable HR to take on more of the day-to-day responsibility for configuration, maintenance of security roles and other in-application activity. This new dynamic necessitates new roles in the HR organization that are focused on maintaining data and technology. To effectively manage today’s dynamic HR technology platforms, companies should develop a broader technology strategy that links to business priorities and establish data standards that produce robust and meaningful analytics. Most HCM SaaS platforms offer communities in which users can participate to discuss challenges, share solutions and influence the direction of the technology. Organizations need leaders who can define a technology strategy and actively direct technology decisions to protect, maintain and maximize the value derived from their investments – and those leaders belong in an HR Technology CoE, where they will be empowered and held accountable by their organization.
  3. Enforce data privacy and compliance standards. Rapid technological advancements have increased the availability and transparency of data, creating stronger-than-ever regulatory pressure to protect data. And, as companies operate in an increasingly global environment, they must deal with a convergence of cultural practices and regulatory restrictions around the sharing and transmitting of data. This means HR must pay close attention and be ready to respond quickly to the ever-evolving regulations surrounding data protection and privacy. The issue of data protection and privacy can often be a “hot potato” in companies, bouncing between Legal, IT and HR. By placing enterprise-wide responsibility for global HR data standards and practices in an HR Technology CoE, companies can protect themselves from data breaches and hefty fines.
  4. Create clear and effective governance. As HR strives to create a world-class experience for candidates, employees and managers, the market has responded in kind. Today’s HR technology market offers all manner of tools that can be purchased to augment the core HCM system in the name of improved efficiency and an enhanced employee experience. But, without centralized governance and decision-making around selection and deployment of these tools, companies can end up with a mish-mash of solutions that, in reality, decrease efficiency and result in an inconsistent employee experience. An HR Technology CoE can create clear ownership of the governance and management of technology for the HR function. When the HR Technology CoE works across the organization to understand and prioritize business needs as they relate to technology and serves as a direct partner to IT in the management of HR systems, HR will make smart and cost-effective technology choices that create a cohesive employee experience.

As companies become increasingly digital, global and lean, the HR organization must play an increasingly crucial role. The HR organization needs people who can understand and think strategically about technology. By establishing an HR Technology CoE comprised of individuals with a deep understanding of HR operations and technology and the ability to connect technology to business priorities, organizations will be able to unlock the full capabilities of their HR technology investments and reinforce HR’s role as a strategic partner to the business.

ISG helps companies establish technology strategies and service delivery models to transform their HR function. Contact us to discuss how we can help you achieve your organization’s HR transformation objectives.

About the author

Kelly helps clients identify opportunities to impact HR transformation through process redesign and technology deployment. Through her involvement in various HR transformation initiatives, Kelly has partnered with organizations to successfully deploy large-scale HR SaaS software solutions, and she has implemented global process and technology solutions in the areas of HR operations, reporting and analytics, compensation, and talent management/acquisition. Kelly brings over 15 years of experience in the HR technology and operations space to her role as a Principle Consultant in ISG’s HR Technology Practice, and she leverages her expertise to help organizations align their HR technology initiatives with their strategic vision for the HR function.