At this point, we all know that technology is hugging us from all sides as it permeates and disrupts business processes from the inside out. But what some are still struggling to grasp is where the major opportunities lie in transforming business functions into something more strategic that embraces technology and creates measurable value. One function that is incorporating most of technologies biggest advantages, but is still facing some challenges, is human resources (HR).
In a 2011 report produced in partnership with SAP, AT&T, PwC, Citi and Cisco entitled The New Digital Economy, the report revealed how the global market is critically influenced by four “Digital Megatrends,” which include: mobility, data analytics, cloud computing, and social media.
Currently, HR departments are doing what they can to create change through implementing these digital megatrends. HR is using cloud computing and mobility strategies so employees and/or contractors can perform their job responsibilities off-site and HR can tap into talent that is free from border constraints. They are embracing analytics and using data for better and faster decision-making. And the use of social media is opening two-way communication for customers and providing easier collaboration for employees.
However, as with all changes and disruptive concepts, there are concerns about the unknown. The Oxford Economic executive summary, The Digital Transformation of People Management, produced in collaboration with SAP, provides the results of an HR-focused survey, which identified the main concerns of HR within the digital megatrends.
The main concerns are as follows:
- With mobile technology, more than half of HR executives are nervous about information security. Rising costs (25%) and consistency of connectivity (22%) also give them pause.
- The most common concern about analytics, cited by about one-third of executives, involves sensitivity to the use of deeper analytics (such as tracking employee skill sets). Over 30% of executives listed the diverse needs of different departments and the sheer volume of data as their top concerns.
- The number-one challenge of cloud computing? Security, say 51% of executives; the next-most common answer, compatibility with existing applications, was mentioned only half as often.
- Appropriate representation of brands by employees on social media is seen as the biggest challenge stemming from that technology. Almost 30% of HR executives say getting buy-in from senior executives is a major hurdle.
And of course, following concerns are opportunities.
The summary provides a few key things for HR to do, which will allow them to compete successfully in the new digital economy.
- Use technology effectively to execute on business imperatives and extend collaboration with other departments, incorporating mobile, analytics, social media and the cloud to ease the transition to a strategic role.
- Consider the competitive risk of not leveraging technology to contribute to business strategy. Organizations in developed economies are not adopting technology as quickly as their counterparts in fast-growing economies and may risk being left behind in the global competition for talent. At the same time, HR executives need to understand the cultural factors within HR and across companies that influence the success of technology adoption and shifting strategic roles.
- Embrace the transition to strategic thinking and driving business results. Says Bob Bennett of FedEx Express, “If our HR strategies do not link to that business strategy, then we are not supporting the company the way we need to be supporting it.”
For more information and to read case studies from FedEx Express and Ernst & Young, download The Digital Transformation of People Management full summary.
4 Digital Megatrends And How HR Can Embrace Them