New economic reality driving HR transformation

A real problem (and opportunity) in HR is that most of today’s HR practices are based on methodologies developed at the turn of the century. Companies have changed in nature from industrial to information, the roles and people have changed from assembly-line to knowledge workers, and the work has changed from unskilled to skilled.

Yet the way HR budgets are made, the way performance measurements take place, the way compensation decisions are made, or how management succession decisions are made and so much more have failed to keep up in most HR departments.

It is clear the old ways of doing business won’t work in the new global economy. Fresh thinking is the new order of the day, and HR professionals have a unique opportunity to create new value for the businesses they serve, their stakeholders, and their communities.

“First to market”, “fastest to change”, “agility”. There are many ways to say it, but the edict at the heart remains the same: companies that move fast “WIN”. The saying “Go slow, die fast” refers also to the speed of transformation and not just the transformation itself, which is the driving force behind cloud adoption in HR.

Cloud solutions allow organisations to deploy and deliver HR solutions more quickly, without the barriers normally associated with size or geography.

Once in place, those solutions can scale up or down faster on the cloud as well. The newer cloud systems are designed for a pace of change that the old systems could never imagine would happen, so in addition to superiority of technology, there’s a superiority of functionality that in the end is going to win the day.

Cloud systems are allowing HR to live out its strategies and support the business. It’s essential for any company to remain competitive. And, while SaaS (soft?ware as a service) technology is generally considered evolutionary, its business implications are more likely considered revolutionary. That’s why the real demand for cloud is being driven by business, where there are heightened expectations for agility and flexibility.

Cloud systems can create the possibility of rapid business model innovation, improved service levels, and new ways of controlling costs – powerful stuff for companies responding to the after effects of the economic downturn and the pent-up business demand for HR.

In the near future, many organisations will have to channel spending almost exclusively into cloud systems unless information technology can put forth a most compelling rationale to the contrary.

As for Thailand, while people are rapidly adopting new technologies, progress in the business sector appears to be far behind. We still find companies that want to build their own proprietary, in-house HR applications – a confusing use of investment funds in today’s world, especially considering that the “build or buy” argument has long given way to the “buy or rent (or outsource)” one.

The Big Trends of “analytics, mobility, social business, and cloud” seem to be stuck in extended return on investment assessments or blocked by security and integration concerns. These issues seem to be fading at the conference as little was made of them.

So to survive in a new economic reality, Thai business and HR leaders who are willing to break, and capable of breaking, old habits and implementing transformational changes in systems, processes, business models, and technologies may have a tremendous upside opportunity for themselves and their businesses in the long run.

John DiDominic is an executive director of client solutions at the APMGroup. He can be reached at [email protected]