New HR Systems Accommodate Changes in Technology

Social media, analytics, human capital management and software-as-a-service among key components in HRIT systems

By Leonard Webb Mar 31, 2014
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Fortune 500 companies are spending millions of dollars annually on HR information technology (HRIT)—technology that not only automates HR processes and improves talent acquisition and performance management, but also includes the adaptation of social media, analytics and other new tech trends, experts say. But do companies know what they’re paying for, and are they making full use of it? IT spend has been “a black hole” for HR for close to 10 years, with many HR professionals complaining that they aren’t given enough time or money to take advantage of advances in the field, said Gerry Ledford, senior research scientist for The Center for Effective Organizations, speaking during a March 17, 2014, webinar.

“The price tag is enormous,” Ledford said. “Technology has to be the biggest spend in the HR department, except for payroll. And in some companies, it’s bigger than payroll. So [for all this money], what do we get? Inquiring minds would like to know.”

The costly new components—software-as-a-service (SAAS), human capital management (HCM) applications, analytics and social media—are shaping the future of HRIT.

HRIS in the Cloud

SAAS and using the cloud are gaining momentum as the business model of choice for several IT functions such as office applications, e-mail and shared file systems. In its latest technology study, Computer Weekly reported that 44 percent of IT decision-makers said they would consider using SAAS in 2014.

Forrester analyst James Staten told Computer Weekly that in 2014 cloud technologies and services will “likely become the de facto standard for buying new applications.”

Ledford said the switch from onsite applications to the cloud has serious implications for HR, including a change in its relationship with the IT department since maintenance and upgrade duties are now the purview of the cloud-system vendor. With the vendor solely focused on the integrity of its product and its performance, HR has more of a working dialogue with the vendor and is less dependent on IT.

What’s more, new software may increase HR’s standing in the organization.

“As we get more-comprehensive, more-standardized, more-powerful software in place, one possibility is that these centers of excellence, which design [the software]—or at least make the choices of what software will be implemented—will become more prominent,” Ledford said. “The role of business partner changes from helping to interpret how processes really work to figuring [out] how to make sure people are using the software correctly.”

Integration of HRIS and HCM

With the increased focus on human capital management in recent years, many enterprise resource planning vendors have developed or purchased HCM services. SAP’s recent acquisition of Fieldglass, a global cloud technology leader in contingent workforce management, and of SuccessFactors in 2011, plus the creation of Fusion and Workday, illustrates the race among vendors to offer companies the perfect information management solutions for their HCM needs.

Ledford stated that, in time, the individuality of these software packages will disappear and the integration of HRIS and HCM into one cohesive process will be the standard business model.

Integration of Analytics

Analytics, once a stand-alone package, is now integrated into all HRIT. Crunching the numbers to the smallest common denominator in order to provide infinitesimal amounts of “business intelligence” has given vendors another carrot to dangle in front of clients looking for a competitive edge.

During the webinar, Ledford said vendors are striving to stand out from the pack by offering packages that service the “niches,” which businesses, small and large, are becoming aware of via the proliferation of social media.

Social Media at Work

Research shows that the biggest penetration of social media into the business sector has been in the role of talent acquisition and internal communication. Jobvite’s annual social recruiting survey released in 2013 shows that recruitment via social media was used by 94 percent of respondents. Jobvite also reported that hires recruited through social media tend to stay on the job an average of three years longer.

As a result, more and more vendors are integrating social media into their HRIT packages. Globoforce, for example, now offers crowd-sourced performance management packages. Experts say performance management may be the next frontier in HRIT as the industry continues exploring all the ways social media can change the business culture of the 21st century.

Leonard Webb is a freelance writer in Wyncote, Pa.

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