This series of entries covers the major forces shaping the HR and Technology functions in global organizations over the next 5 to 10 years. This will cover perspectives through 3 lenses: shifts in HR as a strategic function, shifts in technology landscapes specifically related to HR, and the effects of globalization on HR.
Major tectonic shifts are taking place at the intersection of HR and Enterprise Applications. Human Resources and IT professionals need to start thinking about long term landscape architecture and master data management strategies. Organizations are finding themselves being pulled at varying speeds into a new frontier of HR and technology and for many forward looking companies the challenges below are already affecting day to day operations.
Some of the significant trends covered below are creating the need for new applications, new strategies, and new organizational capabilities resulting in the accelerating transformation of the HR function into a true strategic business partner.
Functional Specialization
HR functions are fragmenting to better address organizational needs
Past
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Future
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- HR functions mostly centered around General HR, Payroll, and Benefits.
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- HR functions are highly specialized in areas like Compensation, Performance Management, Recruiting, Succession Planning, among many others.
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- HR was treated as one homogenous group and outsourcing decisions were often broad, covering most or all functions.
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- Ratio of HR ”heads” to employees is increased and outsourcing decisions are far more targeted or “a la carte”.
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- HR did not have organization-wide buy-in and was even viewed in extreme cases as a “necessary evil”.
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- Organizations pay far more attention to human capital management (and specifically talent management) as a core part of competitive business strategy. It is now a quantitative function.
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Technical Specialization
Organizations are moving from a "hub & spoke" landscape model to a "application matrix" landscape
Past
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Future
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- HR systems mostly centered around Core HR, Payroll, and Benefits. Other applications were considered “bolt-ons” resulting in a hub and spoke landscape.
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- HR applications and technology are highly specialized and fragmented. Organizations embrace best-of-breed SaaS apps like Cornerstone, Taleo, etc.
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- In the old ERP dominated landscape, Platforms, Applications, and Data are fully dependent on each other. IT managed applications primarily.
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- Platforms, Applications, and Data are independent and re-usable across the enterprise. IT and HR must cooperate to manage Data as an entity, not just to manage Applications.
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- Integration is uni-directional or bi-directional.
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- Integration is multi-directional.
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Globalization
HR continues to develop from a local function into a global function
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Future
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- Geographically decentralized and redundant functional areas of HR.
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- many HR functions and departments are globalized and streamlined across organizations.
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- Global workforce was less mobile, required more manual processes where technology did not support the concept of a “global employee”. Talent pools mostly limited by geography and legal constraints.
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- Global workforce is highly mobile geographically (and virtually) resulting in a global workforce dilution effect whereby the best talent finds the best jobs more efficiently leaving other companies awash in a much larger pool of “second best” candidates.
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- Technology and applications were highly localized. Compliance was also exclusively a local problem.
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- Organizations using SaaS options offering multi-language and multi-currency options on top of shared global data models. Global Data Privacy Compliance becomes a significant area of risk.
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The subsequent 3 parts of this series will cover each of those forces above and delve into the impacts each will have on the future operating model for HR, IT, and on HR software vendors.
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