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Digitalisation Making People Services Stronger
By Luigi Maria Fierro, Head of HR Strategy and Innovation, ING Bank
Artificial intelligence and advanced analytics are enhancing the human side of HR, freeing the department up from its many administrative and transactional tasks to become a more strategic partner for the business.
Traditionally HR has been a bit of a bureaucratic dinosaur. Too many unconnected processes slowed the business down and wasted resources on solving the same things over and over again. But the digital age has exploded people’s expectations for access and immediacy, forcing HR to evolve.
We observe two trends. People want to be able to do more for them, but they also want professional service that is tailored to their personal situation. Technology makes it possible to meet these contradictory needs and create a better employee experience. On one hand it standardises people processes on digital platforms and on the other it uses data to customise people services.
IT Platform Standardization
Every company has its own HR system with its own policies and processes. As companies merge and grow, so does the patchwork of different systems they use. And with IT investment traditionally focused on customer and business applications, HR systems are less integrated compared to other IT platforms.
But in recent years there’s been a trend towards standardising HR systems and particularly the underlying processes and policies, which need to be configured on an integrated IT platform. This standardisation is an opportunity to offer a consistent and integrated employee experience across the company.
In recent years there’s been a trend towards standardising HR systems and particularly the underlying processes and policies, which need to be configured on an integrated IT platform
One that gives people more autonomy, for example to manage their own expenses and absences, and helps managers to make better business decisions faster.
The re-design should start with defining the company’s HR narrative and philosophy, and lead to one single HR footprint across policies, processes, and even data use. As HR evolves into a real data-driven function, standardised IT platforms will be essential for enabling the full use of data analytics. This will overcome existing challenges such as data fragmentation, inconsistent data definitions and a limited self-service mindset amongst managers and employees.
A lack of system integration leads to data that is spread out and duplicated over multiple systems. This in turn results in inconsistent data definitions (for example how FTEs are defined and calculated), which limits the application of analytic techniques. Fortunately, as HR becomes more data-driven, data sources are broadening to show relationships and patterns, making it easier to measure HR’s impact on employee and business performance. Consolidating multiple platforms and standardising processes could also make it easier for people to do more themselves. This will help to shift the mindset of managers and employees towards a self-service model that frees up HR capacity for more value-adding analytic activities.
IT Solutions Customisation
The second trend is customised IT solutions. Each employee has their own needs and preferences. Being able to serve them with the best, most-fitting solution could be a competitive advantage for any HR function. That’s why a number of HR functions are heavily investing in developing customised IT solutions to serve their employees’ needs. The most successful organisations use data to understand these needs. Many use consumer marketing techniques such as segmentation, which enable HR to experiment with custom solutions based on how employees behave on the platform and the services they use.
A challenge is the cost of customisation. Custom solutions should therefore be based on concrete needs with a certain critical mass. This will require moving from a top-down approach to a more viral distribution of IT solutions. The more people like or need a solution, the more they will request it. Distributing it from the common platform will ensure it reaches them quickly, reducing the time to market.
Another challenge is how to integrate custom solutions into the standard platform. The IT systems that employees use should function like apps. Apps show that it is possible to offer different types of users in different countries the same standard IT solutions, but gives them the option to customise their preferences.
To conclude we can say companies should always balance standardisation, which provides the right ecosystem for performances, with customisation, which serves specific needs. This makes it possible to offer personalised HR services that build capability and engagement while harmonising HR processes on an integrated digital platform that stimulates and enhances performance.