50th Anniversary HR Magazine: Future of HR Technology

By John A. Ryder Dec 31, 2005
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HR Magazine, 50th Anniversary 2005Wireless devices, outsourcing and industry consolidation will change the landscape of HR technology.

Predicting the future of technology is a daunting and frequently no-win task. The past 25 years have seen the pages of most business publications littered with technology predictions that were ultimately proved wrong. With that major caveat aside, we can comfortably predict the direction of three important aspects of HR technology:

  • What will HR software look like in 10 years?
  • How will it be obtained and supported?
  • What will HR leaders need and get from HR software?

HR Software

Consider first the past 30 years of HR information systems (HRIS)in many respects not much has changed. Yes, the software has become much easier to use and the hardware has transitioned from mainframes to servers and PCs, but the key employee data and HR functionality have remained essentially unchanged. Vendors have added lots of nice features and a lot of sizzle, but many HR departments use only 25 percent to 50 percent of the available features in their current systems. So dont expect any great changes in core HR information systems. HR will still need to collect and report on key employee personal, job, salary and benefits data.

What will change is how users interface with the software and the degree to which many of the added features of todays HR software become seamless and standard. In the future, employee and manager self-service will not be extra modules requiring separate installations, but will become the standard configuration of all HR systems that survive in the marketplace.

HR professionals and employees will have around-the-clock access to software primarily via the Internet and to a greater extent through wireless technology. The pace at which access becomes common on wireless devices such as PDAs and cell phones will depend on the industry and HR professionals addressing a host of security concerns. Most transactions will be electronic and employee- or manager-initiated. Workflow, the technology that automates and coordinates the electronic approval processes, will mature and be widely deployed.

In the future, fewer companies will license, install and maintain HR software on their own computers. The combination of outsourcing and the application service provider (ASP) model of software delivery will change the way most companies obtain and access HR software.

Companies of all sizes will find a variety of outsourcing models attractive, and the continuing development of the ASP model of renting software through the Internet will bring the cost of entry for fairly sophisticated HR packages within range of the 100-employee company. These models will free employers from the hassles and costs of managing, supporting and upgrading software and will eliminate the concept of a company running on outdated software. Traditional HRIS manager and support roles will diminish with these changes in software delivery.

The next several years may also see the delivery on the age-old promise of sophisticated but easy-to-use analytical tools for HR leaders to unlock the power of the data in their systems for analytical and business metric reporting. Business intelligence/OLAP (online analytical processing) reporting will come of age, and vendors will finally create usable business reporting tools and data models to allow HR data to be mined, analyzed, trended and easily incorporated into key corporate metrics. These tools will give HR leaders the ability to easily create complex analytical models that clearly demonstrate the value of HR to a business.

Industry Consolidation

Vendors will continue to both consolidate and renew. There will be fewer mainstream HRIS vendors as several large vendors will strive for market dominance. However, the wave of consolidations will create a host of entrepreneurial ventures fueled by victims of the industry consolidations. The history of HR information systems, although relatively brief, indicates there is a completely new market leader every 10 years. Whether the next market leader comes from a consolidator or entrepreneur is impossible to predict.

The future will also bring a host of new specialized applications, all delivered via the Internet, creating an overwhelming number of web-based services and applications available to HR and employees. Making sense of these choices and, more important, finding a way to organize and present them to your HR staff and employees in a coherent manner will become one of the next great challenges for the industry.

All these changes will require HR professionals at every level, but especially at more-senior levels, to have a much greater strategic command of HR technology issues, costs, features and benefits. The future is not about employee recordkeeping or the transactional side of HR technology. Its about the strategic acquisition, deployment and use of technology to minimize costs and enhance HRs strategic value to the business.

John A. Ryder, SPHR, has over 20 years of broad-based human resource experience in generalist and specialist roles. He currently serves as vice president of human resources for Champion Technologies Inc. in Houston and is a member of the Society for Human Resource Managements Technology and HR Management Special Expertise Panel.

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