Most employers can improve their human capital management (HCM) systems by moving from a fragmented solution to an integrated one with proper preparation. HCM systems can seem like the panacea to reducing unnecessary manual work for HR and Finance, freeing up HR to be a strategic business partner. They hold the promise of a single point of truth for data management and analysis. They also have modern user interfaces that support a consistent, frictionless user experience. But making that promise a reality does require planning and resources.
Recognize out-of-the-box is not the same as optimization
HCM systems are only as effective as the organization’s ability to optimize and integrate them. If they do have budget to move ahead, HR leaders typically review demos of solutions that showcase their fully optimized state. The demo may show the capabilities that come from integrating recruitment, onboarding, performance management, and every aspect of the employee lifecycle. Not surprisingly given these are sales situations, the HR leaders are left to expect that functionality will come out of the box. Then they come to the unwelcome realization that integration is not included.
HR, Finance, and IT must invest time and resources breaking down current siloed technologies and streamlining data into the system. They need to configure the API integrations so different vendors’ technologies work together seamlessly. These functions have staff wearing many hats, so finding the time is not always feasible.
Without the proper optimization process in place, the new systems can land companies back where they started. The HCM optimization process needs to bridge the HCM strategy, Key Performance Indicators (KPI), and metrics with the system itself. This will inform and focus the required data collection, costs, and performance of the system.
Define where you are today
Start with current state by exploring questions such as:
- How much time is the HR team dealing with HR technology, data, and compliance issues due to an inefficient system and processes?
- Does your organization have an HR modernization strategy to move from a service organization to a strategic business partner driving better talent decisions and improved employee experiences?
- Is your organization able to leverage real-time data to make more effective business decisions that help transform your people strategy?
Define the future state and roadmap to get there.
Instead of putting a band-aid on an unintegrated solution, take the opportunity to re-evaluate the overall processes to procure an optimal solution aligned with your organization’s business objectives and overall HCM strategy.
Critically, determine your HCM optimization process.
Your process should be directed by your HCM goals. For example: What are your talent acquisition goals? What improvements do you need to make to onboarding to lessen friction? How about communications—are employees getting the information they need in the channels they want?
Make sure your process is based on data. You need to have KPIs and other leading and lagging metrics for each of your HCM goals. That makes the types of data you need to collect and analyze focused on those metrics.
Determine what mechanisms you need to get the desired data. Software analytics, machine learning to capture employee sentiment, employee surveys—these are some of the ways to get the data you need to measure progress.
Take a deeper dive into where and how to optimize your organization’s human capital management system. Ask our employee benefits experts or download our white paper, Human Capital Management Optimization, and see the way forward.
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