Is Your HR Strategy Ready for Digital Transformation?

Digital transformation strategy

The future of business is digital. That’s true whether you’re talking about customer-facing functions like sales and customer service or back office functions like HR and finance. Even before the pandemic, company leaders were already planning to increase investments in automation, AI, and data. Now, issues like global talent shortages and remote work have stepped up the need in every sector, and technology upgrades have become top priority. It’s no longer enough to have a five-year plan. Digital transformation needs to happen now.

The question is: what does that look like for HR?

What to Consider as You Evaluate New Tech

Perhaps the biggest change to come out of the pandemic has been the massive shift to remote work. Companies have had to pivot quickly, implementing stop-gap measures to manage a newly remote workforce, synchronize technology, and enable online collaboration, learning, and productivity (hello, Zoom).

But now that we’re 18 months in, there has been time to observe how well those measures are working and identify gaps. New technology to fill those gaps is hitting the market seemingly every day, and there is plenty of opportunity to create a more efficient tech stack that serves specific needs. As you plan your digital transformation strategy , here are a few things you should look for in your HR technology:

  • Single-source database – If your HR platform relies on different databases for different functionalities, you’ll create information silos and employees will have to use multi-step processes to access data. A single-source database eliminates break points so that information is readily available when and where it’s needed.
  • Integrations – Consider whether your HR platform can easily integrate with external software. These days, there’s an app for just about anything. If your platform can’t easily integrate, however, you’ll once again be stuck with information silos and multi-step processes.
  • Functionality duplications – Consider the functions already available in your HR platform and in your current tech stack so you aren’t paying for multiple apps that do more or less the same thing.
  • Pain points – Look for tech solutions that can address specific pain points in your current processes. In other words, don’t just choose a software solution because of the new things it can do. Consider whether it can solve deep-rooted process complexities, reduce friction points, improve efficiency, or make a current process easier to conduct in a remote environment.
  • Useroriented design – Technology itself can’t improve employee experiences. The technology must also be oriented toward intuitive user engagement. Take a careful look at your company culture to identify where and how technology can be embedded into daily work for better efficiency and higher productivity.

How to Build Your Digital Transformation Strategy

These are all important things to think through, but remember that digital transformation isn’t just about automating processes and implementing new functions. It’s about embracing disruption, adopting new ways of getting work done, improving business agility, and leveraging tools that support the new reality of work. Your tech strategy should reflect those priorities. In other words, it’s not just about making current processes faster and easier; it’s about rethinking the process of work altogether and embracing new ideas early.

Building a strategy that will carry you into the future means thinking about what you want your business to look like in five or ten years, not just what problems you need to solve now. Ask these questions to get moving in the right direction: 

1. What are my technology and process goals?

Goal-setting flows out of your vision for your HR department. To set functional goals, start by thinking through what is working well, what isn’t, and how current processes need to change. Identify short-term wins (we need to solve a problem) and envision where you want to be in the future (how do we evolve). This might include:

  • Integrating performance management milestones with daily work
  • Establishing a strong people analytics platform
  • Bringing all your data into a single database
  • Building out a virtual learning environment
  • Creating more resources for remote workers
  • Leveraging AI tools for an improved recruitment experience

2. What are my requirements?

Once you have a firm grasp on short-term and long-term goals, take some time to work through your specific requirements. Here are some areas of functionality to consider:

  • Payroll
  • Expense management
  • Employee self-service
  • Benefits administration
  • Talent Management
  • Recruiting
  • Learning and Development
  • Social integration
  • Automation and AI tools
  • Data management

You can save some time on this step by using our HRIS Comparison Tool to think through specific needs at the platform level. Use the tool to evaluate your current processes at the user level and also at the strategy level. Determine what the software needs to continue supporting, and evaluate whether processes can be improved or streamlined.

The requirements gathering process should include not only strategy-level stakeholders, but also grassroots users who can shed light on daily work processes and user experiences. Use a variety of methods such as surveys, observation, documentation analysis, brainstorming and focus groups to dig deep into the requirements process.

3. Do I need a whole new platform or just a new app?

Examine your goals and your current tech to determine whether your platform has the potential to take you where you want to go. If it does, then you may be able to add additional functionality using one or more apps. However, if your current platform is limited in scope, doesn’t meet your data management needs, or doesn’t offer the improved functionality you’re looking for, it may be time to upgrade.

4. What is my budget?

Your IT budget can spiral out of control quickly if you aren’t strategic. Avoid the trap of bloated IT spending by carefully planning your digital transformation strategy, remaining agile so you can adjust when necessary, and sticking with the specific requirements you’ve identified. 

Digital transformation holds the key for HR success in the future. According to SHRM, it is also linked with stronger financial performance, improved diversity, higher productivity, and stronger succession plans. As HR leaders embrace that future, they can reap the rewards of a more engaged, productive workforce both in the office and in a remote environment.     

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