Posted: 02 Aug. 2019 05 min. read

HR Cloud and the ROI Myth

The Importance of Optimisation Beyond the Cloud

Where is the ROI from the significant monies we invested in HR previously?

Why should we invest in HR when we have so many other priorities? 

CHROs championing to secure investment in HR will probably be familiar with these types of questions. It can be notoriously difficult to seek funding to implement a Human Capital Management (HCM) solution because HR is not typically seen as a strategic priority for organisations and as a function, it does not touch external customers. In spite of this difficulty, more than US$20bn has been spent on HR technology in the last five years.  Equally, organisations that have invested in HCM solutions are not necessarily seeing the improved employee experience, nor shift towards a strategic HR function that the investment promised. 

So what should an organisation be considering when contemplating a move to the HR Cloud? There is no denying that HR Cloud is here to stay, but in order to achieve the all-important return on investment from that approved business case, successful transformations will follow a more holistic approach and be tightly linked to business outcomes. Modern transformations will follow a human-centred design approach and contemplate each aspect of the HR operating model required to uplift the employee experience. This includes the systems, data, processes, governance and support infrastructure that brings an experience to life. The 2019 Deloitte Human Capital Trends Report aptly describes this move to the HR cloud as being ‘A launchpad, not a destination’.

The HR operating model gets a makeover
HR Cloud Systems

The HR operating model gets a makeover

The operating model should transform alongside the technology to realise the benefits expected of the cloud platform. As we discussed in The Future of HR Teams, the HR operating model needs to look quite different in the future and those organisations that have moved their HCM to the cloud are feeling this the most. Employee and Manager-Self Service is the foundation of HR Cloud, which means HR can finally focus its time on less transactional activity and more value-add activity, whether this is building agile capability or redesigning policies to support an increasingly contingent workforce. However, having analytical tools, standardised processes and a great user experience are only useful if the HR function can leverage the insight, follow the processes and support the organisation to adopt the mobile and easy-to-use digital solutions. We are seeing HR breaking down the traditional silos within its structure and ensuring that the function is integrating thoroughly with the business. The HR operating model is redefined in a way that empowers people leaders, facilitates rich employee experiences and constantly evolves based on the insight that can now be generated with the enabling technology.

People Managers take the lead  

HR of the future puts trust and responsibility back in the hands of the employees and managers alike, to handle day to day management with the aid of seamless self-service. Organisations investing in leading performance management tools that are agile, easy to use and data-driven are able to create an efficient performance management system that reduces the reliance on HR . Enabled by the technology, employees and their people leaders can conduct meaningful performance management interactions with next to no direct involvement from HR. This benefits the employee-manager relationship, allowing the pair to tailor and self-manage the process to their need. 

True optimisation can come when HR technology, operating model and the role of the people leader are working in unison. Organisations that are contemplating a move to the cloud should consider wider transformation in parallel. Those that are already there and may not be delivering all benefits are encouraged to think about an ecosystem that is wider than simply a move to the HR cloud. With US$20bn spent on HR technology, it is incumbent upon HR to demonstrate the value of the investment by delivering clear, measurable business benefits.

New technologies, new skills 

There is much talk about the introduction of ‘cold body’ or artificial capability to business and the HR function. Regardless of robots and artificial intelligence joining the workforce, the investment in cloud technologies and an improvement in general HR technology requires a change in HR capabilities. Business Partners are no longer HR generalists, they are executive coaches, strategists, relationship managers, change advocates and most importantly comfortable with analytics and speaking the business language. In the centres or communities of expertise, we see a move towards organisational psychologists, data scientists and experience designers. The 2019 HC Trends Report shows that 26% of respondents believe they have been better able to act as service-orientated business partners; as the HR function and the technology changes therefore so must the capability to increase HR’s strategic and service impact.

Is your organisation prepared to embrace optimisation beyond the cloud?

  1. The HR Operating Model gets a makeover – is the operating model aligned to the digitalisation of HR and enabling delivery of the benefits of moving to the cloud? 
  2. People Managers take the lead – are your HR processes enabling people leaders to engage their employees, increase productivity and release HR from burdensome tactical support? 
  3. New technologies, new skills – are HR capabilities being refreshed as HR delivers on improving the employee experience and becoming a strategic partner to the business?


Resources

  1. https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2019/hr-cloud.html
  2. https://www2.deloitte.com/insights/us/en/focus/human-capital-trends.html
  3. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/human-capital/us-hc-2018-hr-technology-disruptions.pdf

Meet our authors

Mark Bowden

Mark Bowden

Director, HR Technology and Transformation

 Mark leads the Australian HR Advisory team within HR Transformation and Technology. Mark has been in Australia since the beginning of 2017 having joined from Deloitte UK where he worked in HR Transformation for nine years. He regularly researches and speaks at conferences about the future world of work. Mark is a co-author for Deloitte’s High Impact HR Model which sets out the key principles and framework for the HR organisation. Mark’s experience is across the full remit of HR transformation, he has led programmes that have: defined the HR strategy; developed business cases for transformation; designed future HR functions; built and implemented Shared Services, CoEs and Business Partners. In HR technology, Mark has selected HR core and enabling technologies and implemented cloud based HCM and enabling technology solutions. As part of the Australian team Mark has led the HR Operating Model and HCM System Selection work at Australia Post, Rio Tinto, Western Power, Cabrini, NAB, Imdex and HBF where Mark has been the Lead Client Service Director. Mark was MCA HR Consultant of the Year for his work at RWE n power and HSBC.

Fiona McClure

Fiona McClure

Manager, HR Technology and Transformation

Fiona is a Manager in Deloitte Australia's HR Technology and Transformation practice where she works with senior HR teams to provide strategic advice during a wide range of HR transformations.  Fiona has worked on large-scale SuccessFactors, Workday and Oracle implementations focusing on System Integration Testing, Operating Model and Process Re-design, and Change Management.  Fiona has broad sector experience and has worked internationally in Asia Pacific, Europe and Latin America. She has industry experience from her time as a junior HR Business Partner at the British Broadcasting Corporation (BBC).  Fiona is Associate CIPD qualified (equivalent to Professional Member of the Australian Human Resources Institute) with diverse experience across all HR disciplines. With Deloitte, clients included are ANZ, Qantas, Medibank, British American Tobacco and UK Public Sector.