SME News March 2018

SME NEWS / Q1 2018 25 HR Focused on Unlocking Value of Digital Transformation; But Less than Half Have the Necessary Resources & Skills in Place “Suddenly, companies are getting much more serious about enabling digital transformation in 2018. But HR simply isn’t ready,” said Tony DiRomualdo, senior research director, Global Human Resources Executive Advisory Program, for The Hackett Group. “It must step up its game in areas that can directly affect the success of these programs, such as leadership, culture, skills and change management. And talent has been a top priority for some time, yet many HR organizations are still struggling to develop leaders who can succeed in today’s often frenzied and uncertain global business environment. “Taken together, the gaps in these areas represent a tremendous challenge,” said DiRomualdo. “Unless HR can find a way to overcome these deficits, they are likely to hold back their company’s digital transformation efforts, and hamper their companies’ overall ability to compete.” The Hackett Group’s research found similar gaps in HR’s ability to address critical capabilities within its own organization. The ability to mine, analyze, model and forecast human capital data to improve business and workforce decisions is a widely recognized priority, but most HR organizations have not effectively developed the skills, tools, and technology/data infrastructure needed. HR organizations are also finding it very difficult to respond to the volatility of the business environments in which they operate. Whether the issue is cost structure, service mix and value-added capabilities, or alignment to business objectives, many HR organizations lack the capacity to rapidly change their priorities, programs, and capabilities to keep pace with changing business demands. Three other critical areas where HR’s own capabilities were extremely limited were also spotlighted in the research: talent management; HCM applications platform modernization; and HR staff skills alignment. HR organizations appear to be focused on addressing their capability gaps in 2018, the research found. This encouraging trend started in 2017 – previously, HR’s priorities for change did not address areas with the greatest need for improvement. But with more than a dozen critical development areas and limited resources, it will be difficult for HR to make progress in all of them. “HR organizations need to seize the opportunity that digital technologies offer to reinvent themselves and permanently elevate their role and status in the enterprise,” said Franco Girimonte associate principal and North American Human Resources Executive Advisory Program Practice leader with The Hackett Group. “To do this most effectively, we believe they should focus in three areas. Improving fundamentals like technology and process are a key starting point. At the same time, they need to take at least small steps to create or extend advanced capabilities in digital technologies, analytics, and more. “Finally, HR must find ways to more effectively help the enterprise achieve its strategic goals,” said Girimonte. “Some good ways to do this include focusing on supporting the culture change that accompanies digital transformation strategic, and ensuring that people executing strategy within HR have the right skills, behaviors, and mindset. HR staff require exposure to business strategy and training in business acumen to deepen their understanding of the enterprise.”