Technology Trends and Issues-From a CHRO's Perspective

Debra Fiori, Corporate VP of Talent Management, Parsons Corporation

Debra Fiori, Corporate VP of Talent Management, Parsons Corporation

Human Capital Management (HCM) directly affects the overall profitability and growth of companies. HCM’s impact is even more pronounced in companies selling services (e.g., financial, engineering, IT, consulting, and legal) because their profit is directly driven by billing out services provided by people. In essence, people and innovative service offerings are the only assets these companies hold. With the high-speed business environment of the information age, it is difficult to stay on top of cutting-edge technologies that will enable a business to operate more efficiently, be more productive, and ultimately beat out the competition to obtain more market share. To remain competitive, service-providing companies must secure an HCM system that is agile, scalable, and committed to continuous improvement in its suite of offerings. 

“To remain competitive, service-providing companies must secure an HCM system that is agile, scalable, and committed to continuous improvement in its suite of offerings” 

One of the top priorities for Chief Human Resources Officers (CHROs) is to provide a compelling business case to the C-suite that convinces leadership to invest in human capital technology. However, effectively demonstrating the cost-benefit analysis to secure the investment requires preparation. Because the implementation costs and recurring annual fees for most robust HCM systems outweigh the human resources savings, it’s too easy to get caught up in a discussion of how many positions you can eliminate in human resources to offset the cost of the investment. So CHROs must partner with IT and other business leaders in the organization to build a business case that explains the full value of the new system in positioning the company for future profit and growth. Talking with other CHROs, I found that many took several bites at the apple before they could secure approval for full implementation of a system that their company needed—and other CHROs are still trying to build the business case and have yet to seek approval to move forward with the investment.  

I am in the process of building the business case, and this is my second bite of the apple in trying to influence senior leadership to approve the investment. My new approach will be five pronged, hitting several angles for consideration. 

  • Cost. To make an effective argument, you must show that the total costs to maintain and operate your current system and service offerings in human resources would exceed recurring costs associated with a new system. In making this analysis, it is critical to consider all costs associated with your current system such as internal IT support for interface development and maintenance, current vendor costs associated with bolt-ons to your HCM, and costs associated with the time that it takes to complete prevalent recurring processes in human resources against the time it will take to complete the processes in the new HCM.
  • Quantifiable value-add tools. The value-add tools offered in the new system will benefit your business, and you must estimate the value this will provide for the business. Evaluating the impact of the new tools on the business and quantifying that value is, in my opinion, the most challenging part of the exercise. For instance, most modern HCM systems offer predictive analytic functionality. In your business case, you need to explain how predictive functionality works, then link the outcomes of predictive analytics in your business to something that is quantifiable and will directly show a gain for your business results. Predicting future turnover would be a good example. If you can demonstrate to the key decision-makers that with the new system you can predict levels of turnover by position type or region and then establish mitigating solutions to reduce this turnover before it occurs, this will reduce the cost of turnover. You should be able to quantify those savings. What about the functionality of self-service when your current system has limited self-service and report capability? With a new system that has optimal capabilities, report generation and key information needed by managers about the people they manage can be self-generating. The challenge is to quantify this new manager access in terms of money that will be saved or business that will be gained as a result of managers having readily available data about their assets.
  • Security. The most common human capital systems offer solutions through the cloud or servers. You need to demonstrate to the decision-makers that the systems under consideration provide the highest level of security and, if possible, provide better security than your current system. Breaches of security of personal information are among the most critical human resources–related issues facing companies today, and most companies have serious vulnerabilities equivalent to those that recently embarrassed the U.S. government’s Office of Personnel Management. Cyber security worries most executives, and a system that will reduce vulnerabilities can be highly valued.
  • Compliance. With ever-changing laws and regulations globally, relevant and cutting-edge HCM technology is critical for keeping your company out of trouble. Let’s face it:  the regulatory landscape is becoming more difficult to manage daily, increasing companies’ risk and exposure, as with the new compliance burdens required by the Affordable Care Act. Demonstrating to senior leadership the dynamics and criticality of labor compliance, as well as an enterprise management system’s capability to manage the complexity and the pace of change, is paramount. This is one of the looking-forward arguments that you must present to position the company for what lies ahead. 
  • Scalability and agility. The accelerating development of new information across the world—and the ease of sharing it—requires that companies be agile, anticipating where the business is headed rather than reacting to the market. As talent management professionals, we can add strategic value to the business and minimize day-to-day administration only if we have the correct tools in our tool box. At a minimum, our business case most demonstrate functionality that will manage the day-to-day administration seamlessly and link the system’s value to upscaling in order to focus on the strategic components that will add the greatest value to the business. Scalability is critical so that the company can easily absorb high upticks in human resource transactions (e.g., hiring, terminating, enrolling in benefits) for large numbers of employees with minimal additional human resource staff. 

I believe that linking all five prongs of the business case for securing a solid HCM system, coupled with solid preparation and partnership with IT in helping to develop that case, will get me where I need to go to convince senior management to make the investment that will generate a remarkable return on business—and I believe that this will be my last bite at the apple. 

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