By Shankar Bharatan, Ramco
Investing in technology for HR floors is not a boondoggle anymore if you have the guts, the elevators and the logic to push forward
Two brothers separated mercilessly in some evil mayhem years ago. Suddenly they stand face to face trying to make sense of this uncanny magnetism towards the other stranger. And then they both spot that hard-to-ignore tattoo on each other’s arms. A black kohl-smudged spot etched by some villains a decade back. It screams – Cost Centre. And with that realization, the two brothers run towards each other unleashing an era of stifled affection. Through overwhelming sobbing and hugs, they try to console themselves against the fate and reconcile themselves of being nothing but stepchildren to a rich mighty father.
If this sounds like a Bollywood potboiler from the 70s, you might have guessed that the big plot of how the heroes avenge their pain will unfold now – all the action and drama is yet to come.As to why this smells hinky in today’s corporate scripts, there is a reason. It’s not just a coincidence that some of us feel this unpleasant Déjà vu whenever the question of your department’s very worth is tossed around that board-room table.
Even if the two functions have been nothing but strangers before, they are bound to find themselves bonded in an eerie fraternal love when they face the allegation of being ‘worthless’ in looks and on books.
IT department and HR Function! The twists of fate could not have been more tortuous and torturous here. For all this while, these two siblings have not only been separated by illusory boundaries but have also been relegated to an orphaned existence in many corporate families. Plus, as Zemblanity could not get any murkier, both of them have been looked down upon as – Ah! You would never be a revenue centre to us! Never!
The funny thing is this – no one has dared to rear their heads and challenge this presumption. No one has found the courage, or a brother’s hand so far, to ask – by the way, what is indeed the opposite of the word ‘Cost’?
It’s not always ‘revenue’ if anyone scampers the answer. The word is ‘value’.
So what if sales or marketing or even R&D (if the way IP is used today is anything to go by) are functions anointed with the vermillion of ‘revenue centres’ and constantly backslapped, patted or celebrated as cubicles that keep the registers ringing!
That does not imply that every other function is a burden with no significant individuality whatsoever.
Alas, that’s not how many CXOs think! They have always seen marketing perched well in cockpits while HR or IT are always an afterthought, ahem, at the baggage belts – much after the journey is over.
It’s weird they think this way because no burger-maker can afford to put potatoes under the cost-box and no Fashion boutique would be silly enough to stamp well-skilled couturiers as mere bill-items. Or for that matter, can any Formula1 team think of winning over tough rivals unless its pit-crew works at the edge fixing tyres in nanoseconds?
Yet, IT and HR are teams who seem to only hog money, resources, floor space, skimpy budgets and precious time.
Unfair as it may seem, it’s not enough to weep over and blame the so-called villains. This is not a Bollywood scene after all and hence nothing is black and white, but often grey.
Have the captains of these two departments ever attempted to make the chieftains see what they have been missing? Have they sold the concept of ‘value’ vs. ‘cost’ yet? Have they created an underground tunnel towards each other to double their strengths?
While the first two options may seem too courageous and one cannot really guarantee outcomes here, the third option is reasonably under control and plausible enough.
What if IT can re-invent HR in a way that the function gives a real competitive edge to the business aka VRIO. Any Strategy professor will tell you that every business’s survival rests on whether it has its VRIO DNA sorted out well. V as in Value, R for Rarity, I means Inimitability and O is well, organization.
It’s not a hard algebra to distill how in today’s fierce environments, with global workforces, diversity of every kind concocting new challenges, poaching as a hanging sword, compliance and regulatory mandates as invisible thorned-fences running in loops around HR- with all this, HR becomes not only more relevant than other but also something more.
It’s the new protagonist who can convert every hygiene factor into an X factor by ensuring that talent and its management stays top-of-the-pack and indispensable. It is only through seamless, integrated, ahead-of-time, ahead-of-curve workforce management that any business can convert its fantasy of staying in the market radar for long. That’s not it. We are not only talking about managing an elusive force called talent, but we have also to take into cognizance that this ‘talent’ is more generation-striped, mobile, multi-faceted, colorful, demanding, expensive, irreplaceable, and implacable than ever.
It would be a dream-come true if IT can lend a hand and create a souped-up HR for today and tomorrow. With savvy talent management, payroll, embedded analytics, self-service, integration to other enterprise applications, intelligence with insights, market-aligned sophistication, information leverage, mobility, BYOD, contextual action, exception-handling, hire-to-retire cycle penetration through on-boarding, training, performance management, e-learning and payroll etc complete and seamless for the new age workforce.
Incidentally, recently enough, the same powerful handshake has been hinted at in many surveys and prognosis-capsules by some research firms. For instance, CedarCrestone has talked about how companies can gain 38% more profit per employee with standardization of their global HCM processes. Deloitte also pointed out in a report that effective use of HCM strategies can be linked to increase a company’s ability to respond to economic conditions.
It is not surprising actually to see the 2013 CedarCrestone HR Systems Survey highlight how Enterprise Resource Planning (ERP)-based HRMS solutions are holding their high levels of adoption while adoption of the full suite of workforce management applications delivers administrative savings and cost reductions resulting in 33% higher operating income growth.
Talking of boardroom-relevant stuff, Integrated Talent Management (ITM) seems to continue as the direction linked to highest financial performance as per this survey where it has been emphasized that an ITM on the same platform as the underlying HRMS yields the highest financial performance and lowest cost especially when it comes to expanding to Business Intelligence (BI) of all solutions, with 50% lower BI costs.
Coming back to our obsession with revenues, costs, top line etc instead of value, it is worth noting that average revenue per employee of top performers is $681,903 vs. $352,576 for all others among some highly successful organizations studied in that survey which also gave a glimpse of a measure of profitability of enterprise employees. Note that average profit per employee of top performers was $317,508 vs. $131,157 for all others.
Hence, successful implementations that entail upfront business process improvement work and change management continue to catch spotlight as 77% of top performers have common or somewhat standardized HR processes across the organization, as compared to only 63% for the others in the CedarCrestone 2012–2013 HR Systems Survey.
What differentiates these top performers from others is the undeniable fact that here HR has the power to make changes and is viewed by all level of management as contributing strategic value in 55 % of these top performing firms vs. 41% at others. Top Performers are prone to use methods such as process optimization, Six Sigma programs, stakeholder engagement, and usability studies across user stakeholder communities etc.
With or without figures, the argument goes on strong and formidably deeper. Imagine what wonders can pop up if a sales team’s targets or challenges are routed back to HR so that real-time customer-relationship-improvements with agile answers and nimble-footed training/development efforts are worked out at the back-end. Think of what headaches your arch-rivals will suffer when they fail miserably in breaking or copy-pasting your brand’s quintessential force that is built organically with deeply-embedded and well-aligned work culture and overall organization values. Sketch a scenario where your talent is not a warehouse but a river that pervades all your critical moments-of-truth with the customer, every time, with delight delivered invariably.
A lot of ink has been devoted to the term ‘glass ceilings’ for long. Have we ever pondered over some glass floors or walls? Have we tried to go beyond these metaphysical boundaries and shook a hand or two with other cousins sitting across these walls? Can HCM not be a stream that unifies and runs across all floors and cubicles instead of being one more silo to reckon with or elbow out?
The answers are already out there. HCM is just one way to tie new bonds with the so-called strangers in the family. Discover a new brother today, but first – break the ‘cost centre’ red box. Now!
This article was first published on Ramco’s blog. Ramco HCM is a global HR & Talent Management solution that covers organization’s human capital management needs from hire to retire. This includes Workforce Planning, Recruitment, Workforce Management, Talent Management, Employee Development, Payroll and Benefits.
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