Effective technology decision making must be a top priority for TD executives.
HR technology is becoming more varied, complex, and innovative. Along with commonly used HR information systems, human capital management systems, and learning management systems, there are many areas where innovation is enhancing HR and talent development’s value to the enterprise.
Artificial intelligence and blockchain technologies are elevating recruitment and selection processes. Data visualization tools are helping ensure diversity and inclusion in talent and leadership pipelines.
Employee experience products are driving improvements in engagement and retention. Learning systems are becoming more adaptive, immersive, and predictive.
Nudge technologies are interacting with workers to increase productivity. And during a worldwide pandemic, technologies that support virtual meetings, online collaboration, and self-service have become critical to business continuity.
Talent development leaders must follow the tech marketplace and innovation trends. But even more important, they must have a strategic mindset when considering changes to their HR technology infrastructure.
Make strategic technology decisions
Implementing new technology can be costly and disruptive. Sometimes, it can feel more like moving sideways than forward.
For example, replacing one product with another can involve discovery, defining requirements, evaluating products, contracting, configuration, data migration, systems integration, administrator and help desk training, acceptance testing, and cutover planning. It’s a significant effort involving many people in your organization.
When all is done, you may have achieved incremental, rather than quantum improvements in your HR technology infrastructure, and you may ask yourself whether the effort was worth it. Technology initiatives are most likely to fail when they do not solve a clearly articulated, measurable, high-priority business need.
Before making your next move with technology, ensure you have clear answers to five key questions and use them to guide your technology decision making:
- What are your CEO’s top strategic goals during the next three to five years?
- What role do the HR and talent development teams need to play in achieving those goals?
- What challenges and obstacles do those teams need to overcome to be successful?
- How does your current technology affect those challenges and obstacles?
- What options do you have for applying technology to mitigate the challenges and obstacles?
Navigate technology options
There are many ways to spend your technology budget. You can invest in automation that streamlines processes or create integration solutions that move data between different systems.
You can upgrade your systems to take advantage of new features or replace one software product with another to reduce costs and improve the user experience. You may need to add more software products, modules, apps, or plugins to expand your HR technology stack’s functionality.
Periodically examine how your technology enables HR processes and outputs. Ask staff to identify and prioritize problem areas, and think about opportunities to make work processes more direct, self-service, and streamlined.
All-in-one product versus integrated system stack. Many all-in-one human capital management product suites are available. The various applications in the suite work together seamlessly and are supported by a single vendor.
Some companies go so far as to combine their HR and enterprise resource planning systems into a single vendor solution. Still, there may be missing pieces or a need for more suitable solutions to replace some components.
Increasingly, companies are deploying an integrated software stack comprised of multiple products from a variety of vendors. Implementing this type of platform requires attention to interoperability standards, system integration capabilities, and data flow. The key benefit is that it is tailored to the organization’s needs and priorities.
Software as a service. Some companies have resisted moving their HR systems to the cloud, preferring to maintain full control of data security in their corporate data centers. The downside of on-premise software is that your IT department is responsible for licensing and managing system upgrades.
Often viewed as disruptive and relatively low priority, software upgrades may be deferred for months or years, resulting in outdated systems that have the look, feel, and feature constraints of yesteryear.
Now that the SaaS marketplace has matured with adequate safeguards to protect sensitive data, more companies are moving their systems to the cloud. In addition to reducing HR administration and technology operating costs, a benefit of cloud solutions is that you are always running the latest version of the software.
Open-source versus commercial. Usually, the most expensive factor in commercial software pricing is user licenses. The number of open-source HR products available is growing.
Open-source products have no licensing fees; however, they may offer limited or no support. Thus, contract with a SaaS provider that can provide support for the open-source product.
Partnerships with IT. It is critical for you to form effective working relationships with your counterparts in IT, who are likely to have extensive experience and rigorous procedures in place for ensuring systems are reliable, secure, and appropriately scaled to meet demand. IT can help ensure your systems comply with privacy laws and regulations and embed them seamlessly into the larger enterprise technology infrastructure.
Defined requirements. Technology requirements serve as your primary criteria for evaluating and selecting a product. When defining requirements, identify all key stakeholders and meet with them to hear their viewpoints on what is needed and what is important.
Too often, organizations define hundreds of requirements—some broad and others granular. To make product evaluation easier, direct your staff to write requirements clearly and unambiguously, express each requirement as a need rather than a solution, ensure each requirement is discrete without repeating or overlapping others, and write all requirements at the same level of detail.
Evaluate and select products
An effective product evaluation process involves numerous activities. Follow these seven steps to select a product. After each evaluation activity, your list of candidate products will decrease.
- Vetting. Some HR software products target specific markets, such as small, midsized, and large organizations. Identify a dozen or so products in your target market.
- Request for information. Put together an RFI that lists your requirements along with a few questions (aim for two to six) per requirement. Avoid asking yes-or-no questions. Contact the list of vendors you want to evaluate and ask whether they are interested in responding to the RFI. Send the RFI and give vendors two weeks to respond. When one vendor asks a question, send the question and your response to all vendors without revealing who asked the question.
- Scoring. Evaluate the RFI responses with a scorecard. Use multiple reviewers, and aggregate the scores. Ask reviewers to consider the vendor responses to all questions, and enter a score for each requirement using a Likert scale, such as unsatisfactory, suboptimal, acceptable, strong, and optimal. Continue evaluating the five or six products with the highest scores.
- Use cases. Define a dozen use cases representing things the software must do. Invite vendors to demonstrate how their product addresses all use cases. Demos can be remote, via videoconference, or on-site. Score each use case using the same Likert scale you used to evaluate RFI responses. Select two or three products with the highest scores.
- IT evaluations. Involve IT in evaluating security, privacy, and systems integration capabilities.
- Financial health. Check the vendors’ financial strength to ensure they are positioned to provide adequate support and continued development of features and functionality.
- Request for proposal. Send a request for proposal to obtain price quotes, service guarantees, product warranties, and support options. Having more than one finalist product puts you in a stronger negotiating position to ensure you get the best price the vendor can offer.
Plan and manage implementation
After you choose a product, the real work begins. Assemble a team and free them from most of their other duties so they have adequate time to work on the implementation.
Do not underestimate the amount of work involved in a large system implementation. It can take anywhere from four to 12 months, depending on the project.
Assign a team leader who is responsible for keeping the project on track and moving toward a successful outcome. A good team leader works effectively with all team members to remove obstacles, plan contingencies, communicate with the vendor, and escalate issues when needed.
Assign a skilled project manager, preferably one who is experienced with large-scale system implementation projects. System implementations have many moving parts and a strong project manager is essential to success.
Remaining team members may include system administrators, HR process owners, and technology specialists from IT and HR. The implementation team works closely with the vendor to configure the system, plan and develop integrations, and move data from legacy systems to the new system.
At times, an extended stakeholder team thoroughly tests the system before going live. Acceptance testing ensures all data has been migrated successfully and that the new system is working as expected. It also helps orient stakeholders to the new system.
Establish operational processes and governance
The new software may necessitate adjustments to how your organization operates. Direct your team to update relevant process documentation, such as workflow diagrams, procedures, and administrator guides.
Establish a governance structure to ensure your technology continues to support the enterprise’s goals and needs. Effective governance provides a structure for decision making and ensures all stakeholder groups are represented.
A typical governance structure has four main parts: a governing board representing executive leadership, a steering team representing management, working groups representing stakeholders who use the software directly, and your software operations staff.
As HR technology evolves, its potential impact on your team’s effectiveness will continue to grow. HR and talent development executives must be ready to make strategic technology decisions and oversee large-scale system implementation projects, minimizing disruption and maximizing results.
Scan the HR technology landscape. Meet with your CEO and peers in executive leadership. Find out what they are trying to accomplish.
Develop a shared vision with your stakeholders and staff. Then make it happen.
Read more from CTDO magazine: Essential talent development content for C-suite leaders.
