What is the next wave of HR digitalization and how to figure out what to focus on next?
However, as the speed of digital revolution in HR is increasing, many organizations are finding it harder and harder to keep up with the pace of change and to figure out where to focus on next.
In recent years, HR digitalization has taken a huge leap forward as companies and organizations have begun "cloudifying" their human capital management (HCM) solutions. Core HR applications – often on-premise – were moved to the cloud, using HR cloud application providers like Workday or SAP SuccessFactors. This migration to cloud platforms has helped organizations consolidate their HR application landscape, simplify core "people processes" and improve the end-user experience with new mobile capabilities.
While cloudification is arguably the ground zero of HR digitalization, it's still just one piece in a bigger puzzle. For instance, the next wave in HR digitalization already includes implementing automation in HR via robotic process automation (RPA), integrating Q&A and action bots seamlessly into people processes, and embedding "real" advanced analytics and AI capabilities in HR processes.
And it is exactly here where many organizations face a dilemma: Should they focus exclusively on getting the most out of their HR cloud investment or look into the new technologies with no obvious guarantees of success? In the Nordics, most organizations have been using cloud-based HR applications only for a few years, so there's still a lot to do when it comes to exploring the full potential of their new HCM solutions. Yet there is a real risk that you'll be left behind in the HR digitalization race if you don't keep pace with new technologies.
Traditionally, HR applications have been categorized and classified in many cases using two different approaches:
1. Mapping an HR application to support a particular process like recruitment or onboarding in the "employee journey"
2. Mapping an HR application to handle sub-areas of HR like learning and development or employee listening
These classifications continue to be valid, but it is also important to introduce a novel way to think about HR technology – one that examines HR digitalization vertically and considers the emerging technologies HR leaders need to be aware of. At Tieto, this new approach is called the "HR stack". In fact, we use it to plan, govern and follow-up our entire HR digitalization journey.
The HR stack consists of eight unique areas that bring together all the key technologies behind HR digitalization:
The ultimate purpose of "stack thinking" is to understand the HR technology landscape holistically – to shift from a one-application-at-a-time analysis to a broader understanding of how different HR technologies are interconnected. This shift helps organizations allocate time and investments in a clear and transparent way, not only to the core applications and system integration projects, but also to the new and emerging technologies.
The stack thinking is also a great way to educate key stakeholders of the benefits of new HR technologies and to follow-up on what is happening in the bigger HR digitalization landscape. Most importantly, with stack thinking, organizations can achieve an unprecedented level of structure and clarity in their bid to digitalize HR functions. Management can now make better investment decisions when it comes to HR digitalization, while keeping up with the ever-increasing pace of innovation.
This blog post kicks off a new HR tech blog series in which we examine how Tieto is working with HR technologies – from core HCM applications to more advanced technologies. The next post will dive deep into using RPA to automate HR processes.
As an experienced partner for HR systems implementation, integration, and post-production services, Tieto can help you navigate HR digitalization by