Of all the issues that frustrate CIOs, providing a solid answer on the value of IT initiatives and investments most likely tops their list. Digital technology is undoubtedly at the center of business operations in nearly every industry. However, defining, measuring, and maximizing the value of those investments remains elusive.
According to Dr. John Boudreau, professor of management and organization and research director at University of Southern California Marshall School of Business and Center for Effective Organizations, the connection between IT investments and the tangible value they deliver should be people-centric. In the Harvard Business Review Analytics Services report “HR Analytics Busting Silos and Delivering Outcomes,” sponsored by SAP, he advises, “Business leaders need to learn how to think about the connections between people’s work and business outcomes.”
At the time, Boudreau was speaking directly to CHROs, but the same can be said for CIOs. Amplifying IT’s often hidden value requires a link between digital initiatives and the creation of a workforce culture that runs faster and simpler, as well as being more informed, efficient, and collaborative. While such indicators are thought to fit within HR’s domain, it’s also an opportunity for IT to shine.
Why CIOs should support HR’s move to the cloud
To balance paving the way for a digital future while making a highly visible contribution to the business, CIOs are beginning to architect HR’s shift from transactional excellence to highly digital, end-to-end employee experiences. And for many companies, a cloud-based, integrated human capital management (HCM) solution is turning a silent IT platform into a tool that magnifies the connection between technology investments and improvements in how people work.
As PwC recently stated in its “Global HR Technology Survey 2017,” “organizations of all sizes continue to migrate their HR processes to the cloud at a record pace. Two years ago, 68% of organizations had at least one HR process in the cloud. In 2017, that number has climbed to 73%. For those that still use on-premise applications (hosted within the organization’s four walls) for core HR, nearly one-third are actively planning their migration to the cloud over the next 12–18 months.”
For IT, this adoption trend is an empowering opportunity to reevaluate business structures and enact large-scale change within individual business units and across the enterprise. Transformative uses cases include enablement of a flexible, mobile workforce and improved alignment and interaction with customers, suppliers, and business partners.
Transitioning the HR function to the cloud allows IT to directly refine business models, re-engineer business processes, and re-imagine work in five distinct ways:
1. Lower total cost of technology ownership
HR systems in the cloud deliver real cost savings to businesses through the elimination of on-premises software maintenance, sensitive hardware, disaster recovery nightmares, unused capabilities, disruptive upgrades, and expensive licenses. Cloud software gets up and running more quickly – increasing time to value and simplifying IT requirements to improve efficiency. Plus, the business can quickly update its infrastructure with new features as it requires them and deploy those updates across the organization simultaneously with no disruption in service.
2. Increased data security
The security of personal and proprietary data is expensive to manage correctly, but it’s also a necessary infrastructure function for cloud-based companies. Cloud providers invest heavily on strict data protection and privacy standards, cloud security certifications, and expertise in identifying and protecting against risk.
3. Simplified work and decision-making
By enabling employees to enter information only once and share it across all programs, cloud platforms significantly reduce human error commonly attributed to inputting data into multiple programs. One employee record, one user experience, and zero interfaces – information in silos is replaced by business-wide collaboration while reducing administrative overhead, increasing productivity, and saving organizations money.
4. Heightened relevance and mobility
The workforce is now a network of mobile, often dispersed experts who are most productive when they have instant access to critical information and tools. For the HR function, this new reality means working from different locations and providing fast and easy access to information, as well as management of and response to personal and organizational requests. The cloud not only provides the access and self-service teams need, but it also empowers the workforce with more flexibility and on-the-fly interactions through a choice of devices.
5. Better analytics and reporting
Cloud HCM systems offer real-time, dynamic reporting. Talent management decisions can be made based on live data, rather than data that was captured days or weeks before. The ability to see and analyze in-the-moment data can feed decision-making with predictive analytical thinking related to employee health, performance, skills, and leadership potential.
The CIO-CHRO partnership: Stronger, more unified, and highly strategic
The more CIOs shift from the defender of the status quo and technology stability to technology-empowered business strategies, the more successful the HR organization – as well as the IT function – will become. By joining forces, the CIO and CHRO can seamlessly integrate data and provide big-picture insights that lead to a more strategic market presence. More importantly, the CIO can finally show how every new application, functionality, and extension implemented can enhance how work and business are done with results that everyone – from the boardroom to the plant floor – can see.
To learn more about how CIOs can significantly influence the future of HR and IT, check out the infographic “Choose the Right Path for HR Digital Transformation.”