HR should consider 40 key elements that will enhance business value in choosing a potential HR technology solution, writes Rob Scott
Contrary to recent media rumblings suggesting the low value-add of HR and its relative simplicity, the reality for many HR professionals is the continuing need to juggle a significant number of distinct yet interrelated specialist activities to create effective, people-centric work environments.
Non-HR audiences are often taken aback by how diverse and complex HR really is. This is particularly true when I share my “HR periodic table” graphic of the top 40 HR elements and explain the importance of identifying which of these elements provide the greatest business value, and which offer little or low value or could even destroy value when building people strategies or selecting HR technologies.
When HR leaders select new HR technologies (boxes with a cut corner in graphic), they commonly narrow their focus on functional requirements and the business processes the software will support. More consideration should be given to the impacts and interrelationship of the 40 elements on their HR technology choices, as well as how other non-HR factors – such as industry challenges – influence the business value created once the technology is implemented. An impact and influence assessment will add credibility and realism to your business case. In addition, the following outcomes can be expected:
- a realistic view of the business value a specific technology module will provide
- visibility of prerequisite activities needed to create or improve value from the technology
- capability to develop a technology roadmap that includes a business value perspective
- understanding of where the greatest financial returns are achieved
- greater acceptance and adoption of technology.
The following practical scenarios will help build understanding:
1. Interrelationship of the 40 HR elements. Say you are considering implementing a Performance management solution [Pm] to manage corporate goals and identify top future talent. Your recent Mentoring & Coaching [Mc] program is struggling to gain traction among managers whose Style [Sl] could be best described as “entrepreneurial”, and is heavily influenced by the CEO’s definition of value in dollar terms (Vm) only.
In this scenario, a performance management solution is unlikely to add business value, as the influencing elements noted will undermine the intentions behind the introduction of performance management software.
Even if HR convinces everyone to complete the performance management process, it’s likely to be a feat in compliance rather than a realisation of benefits. In this example, the money may be better spent on, for example, Leadership development [Ld] and Culture [C] programs that could influence future thinking and demand for performance management.
2. Influence of non-HR factors on business value. When considering influencing factors on technology selection other than the 40 HR Elements, I find the following sets to be useful:
- Primary business drivers: these describe your organisation’s principal approach to achieving its strategy, for example, growth, control, governance or efficiency
- Industry challenges: general issues being experienced within an industry, for example, cyber security in financial services or digital marketing disruption in retail
- Level of organisational maturity: the level of executive expectation of the HR function ranging from administration to strategic influence.
Various combinations of non-HR factors will create an over-arching and unique value weighting across the 40 elements, potentially leading to different technology and HR choices. Consider working in the financial services industry where Ethics [E] is a significant issue, your primary business driver is one of “Growth” and your Maturity level is “Non-Strategic”. In this scenario you may realise greater business value from implementing Learning [Ld] software to develop ethical behaviours and support skill demand for a growth strategy, rather than implementing Performance Management software.
Your organisation has a unique value DNA. By tapping into this, HR can identify which of the 40 elements will enhance their business value and which ones won’t. Rather than choosing HR technology based on a vendor or SI viewpoint, one that is aligned to your value framework will offer greater long-term leverage.
5 key takeaways for HR
- When you start pulling away the covers, HR is much more complex than first meets the eye.
- The 40 elements which HR leaders juggle are interrelated and influence the degree of value derived from each individual element.
- The value from HR technology is not achieved simply by switching it on; its value is influenced by the 40 elements as well as external factors such as industry issues and business maturity.
- Knowing your value DNA will guide what HR technology to buy and offer insights into prerequisite work required to improve the value outputs.
- Aligning with your value DNA builds HR credibility and respect.
Image source: iStock