Digital Eye

Perspectives

Beyond HCM Cloud

HR technology is not static. There is no finish line.

Over the past decade, organizations have made impressive strides toward establishing a new HCM Cloud foundation, and 90% of HR leaders¹ are currently planning to maintain or increase their HR technology spend. However, only 22% of organizations believe they are ready to use technology to improve work outcomes² and 48% of CHROs³ believe HR technology hinders the workforce experience. Why? What’s causing the discrepancy between investment and results? Deloitte has observed three consistent themes contributing to the gap between HR technology spend and the achievement of better outcomes.

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Addressing the HR technology spend and outcomes gap

  • Many organizations have recently executed the initial transition to HCM Cloud not realizing it was the starting point for a modern HR technology road map. In other words, migration to HCM Cloud is just the beginning of a broader digital journey. It requires continuous refinement and intentional optimization to get the most of an organization’s investment. While HCM Cloud provides an important foundation, by itself, it does not fully meet the rapidly changing needs of the business or the increasing expectations of the workforce.
    
  • Many organizations focus on deployment-centric strategies for HCM Cloud implementations, but lack a comprehensive HR technology strategy. Organizations regularly exclude important emerging capabilities, such as digital, people analytics, and cognitive, that can be an afterthought for an initial HCM Cloud implementation but are becoming increasingly important to HR customers and the business. Organizations need a more holistic HR technology strategy and road map inclusive of a broader set of solutions and digital capabilities with a measurable connection to value upfront.
  
  • The HR and workplace technology marketplace is continuously evolving, and organizations are struggling to keep up with the latest offerings. There has been an unprecedented $28.4 billion4 in HR technology venture capital investment since 2017, with the pace of investment increasing each year. The market-leading HCM Cloud platforms are innovating faster than many customers can adopt, and the rapidly growing vendor market for enterprise and “pure play” solutions has created an extremely difficult technology landscape for HR leaders to navigate.
      

Combine these three themes together and it is clearly time for a new approach. Beyond HCM Cloud is Deloitte’s new way of helping organizations accelerate the development of a fit-for-purpose, iterative HR technology strategy and road map for today’s rapidly changing world. Does your organization have an outcomes-focused HR technology strategy? Can you articulate the link between HR technology investments and benefits to the organization? Get in touch to learn more.

  
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Endnotes

1 Teresa Zuech, “Top 5 strategic technology trends for HR in 2021,” Gartner, May 12, 2021.
2 Michael Griffiths and Kraig Eaton et al., 2023 Global Human Capital Trends; New fundamentals for a boundaryless world.
3 Zuech, “Top 5 strategic technology trends for HR in 2021.”
4 Phil Albinus, “The HR tech start-up market is booming. What that means for HR,” Human Resource Executive, September 20, 2021.

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