Investing in Technology: Finding the Finance-HR Balance
It takes strategical thinking to help ensure you're investing in the right technology for your organization.
How do you quantify "people performance?" How do firms effectively determine which employees are a good fit for their organization? How long will they stay and contribute to a corporate culture that both encourages loyalty and engagement? New HR technologies promise just that — tapping a combination of mobile delivery, analytics and machine learning, there's real potential for people-driven HR departments to ask tough questions, discover great answers and empower corporate decision-making.
But for finance leaders, when does investing in technology for HR make sense and when is this too much spend for too little return? Let's take a look.
For many HR departments, the impetus to transition from current processes to new technology deployments stems from the long-held frustrations of handling paper reports, feeling overwhelmed by the volume of information and being continually behind the curve when it comes to addressing employee needs and contributing to C-suite strategies. The problem for finance leaders? This may not be enough to justify the incremental spend on new HR technology.
As noted by Raj Uttamchandani, VP of Global Product & Technology for ADP, just adopting new technology won't solve HR issues. Instead, firms need to ask themselves, "What value is this going to bring to the organization? What problems is it specifically going to help solve?"
Rather than leveraging new technologies to discover unspecified "answers," businesses should first identify opportunities to capitalize upon and key problems that need to be solved, and then design tech spending around these outcomes. In addition, HR teams need a clear understanding of what successful deployment looks like. "After deploying this technology, how will you know if it's successful," notes Uttamchandani. What data will it produce? What metrics will it impact? What results will it drive? Specific details are required to justify investing in technology, regardless of the potential outcome.
Practical and Potential Value
For finance leaders, any request for spending on new HR technology needs to come with a discussion of practical vs. potential value. For example, cloud-based HR offerings offer flexibility and agility that can't be matched by in-house systems and traditional analysis tools. Although cloud-based offerings do come with ongoing costs, they are generally less costly over time than maintaining hardware and software for in-house systems.
But, the potential value here is more difficult to measure. If HR teams spend less time looking for critical files, compiling data and generating reports, they're able to focus on managing employee performance, improving engagement, assessing compensation and defining retention strategies. New technologies are effectively a "long game" investment. Even with clear questions and metrics in mind, the value is generated by the pervasive and integrative nature of the solution rather than its up-front and ongoing cost.
Cost vs. Benefit
Finance leaders need to consider the costs of non-use. What happens if HR rolls out a new solution that employees and managers don't see the value in using and then attempt to avoid it? Uttamchandani notes that "it is important to understand the audience you're trying to roll the technology out to." While end users have the capability to handle new technology solutions and providers are now designing more intuitive tools for HR, new systems that don't fit into existing workflow or take time away from day-to-day tasks are easily sidelined. The result? Big spend for minimal use, which translates into a wasted investment by finance leaders.
As a result, organizations are well-served with the development of software deployment plans that require minimal or no training, include regular updates and room for feedback. Leading technology vendors are often able to regularly iterate their solutions, in turn providing tailored additions to meet employee needs.
"We need to remember the fact that the employees who are the end-users of this enterprise software are human beings like all of us," Uttamchandani says. The way they interact with consumer software in their everyday lives is the same way they expect to interact with enterprise technology. If new HR software misses the mark, adoption becomes very unlikely.
Investing in technology is now a top priority for HR teams. To ensure outcome matches outlay, finance leaders must ensure that new tools address specific problems, deliver measurable results and can effectively integrate with existing processes to drive business value.