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HR, IT must both contribute to human capital management

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The quality of relationship between a company's human resources and IT divisions has a profound affect on the progress of operations, writes Richard Rayne, MD of On-Site Training. Organisational success is dependent on a combination of people, processes and technology – so interaction between these two departments is crucial.

Human relations types and IT pros wouldn't seem to have much in common. It's your extroverted, people person who wants to make sure everybody at the company is happy vs. your introverted engineer who wants to make sure every node in the network is up.
Stereotypes aside, HR and IT do have quite a bit in common. Both are horizontal organizations that touch every part of a company and therefore have a unique view. Both are looking to use that knowledge to help businesses be more successful. If businesses truly believe it takes a combination of people, processes, and technology to achieve organisational success, then human resources and IT had better reassess their relationship.
The state of business has evolved into an increasingly global, "always-on, always-connected" information-based economy. Today people must work together across geographical and organizational boundaries using the latest technology to enable them. Business has evolved in such a way that we are totally dependent on our IT systems. Nothing proves this better than the recent power shortages we have experienced.
Does HR have the relationship with IT to be able to contribute its analyses and recommendations on IT solutions that will enable its employee to deliver more efficiently?
Traditionally, the two have operated in parallel spheres of the organisation, but those orbits are now overlapping. HR is more technology-dependent than ever, while IT is increasingly involved in decisions about ERP, performance management, and other human capital management (HCM) systems. And like IT, HR has fallen prey to outsourcing, perceived by many as a transactional machine that lacks strategic value.
It's time for the CIO to build corporate partnerships with the HR executive and line-of-business managers. Working together, they can truly focus on the effectiveness of their human resources and elevate HR's business value. Broadly speaking, HCM should evaluate, assess, integrate, and manage corporate talent and assets. But since HR technology funding often draws skepticism, HR executives should seek out CIOs as allies who will collaborate on and champion the development of business cases and ROI analysis for HR investments.
Yet with so many other priorities demanding their attention, why should CIOs put HR automation high on their to-do list? Here are some reasons:
* HCM is a key component to the overall business strategy.
* Changing business conditions and labour markets require a new approach to HR program delivery.
* Companies investing in HCM technology to support the transition from HR administration to strategic HCM are setting up high-performing organisations.
What's required is a broader mind-set from both sides. HR must realize its larger role and build bridges within the company. IT, for its part, needs to see HR improvements as a valuable corporate asset it can use to optimize processes.
Admittedly, HR hasn't made a strong case for itself, even though most departments are having a difficult time understanding their current human assets and how to best optimize them. Managers tend to focus on day-to-day management of individuals and don't think about long-term workforce planning and what will be needed to drive their organisation into the future. They lack adequate decision-support tools about their human resources.
In the current tight job market, lines of business might be having a hard time finding the right combination of business and technology skills to move forward. And in some cases, it might become obvious through rudimentary performance-management processes that teams aren't focused on the right activities or on achieving results. With a predicted shortage of talent in the coming years, it's necessary to develop new ways to manage, develop, and measure the impact of a team on the overall results of the company. Critical to success will be deployment of innovative and improved technologies that provide the data and decision-making capabilities to better manage the workforce.
They find ourselves both fighting for a seat at the table in terms of corporate priorities, both struggling to figure out what it means to manage their respective functions on a global basis.
Simply put, by aligning talent and core competencies of the organisation, HCM can bring coherence and prove results. To ensure peak performance and improve operational results, organizations are integrating business drivers that affect both the bottom line and strategy.
HCM focuses on processes such as recruiting, performance, training and development, and succession management, thereby helping businesses boost performance. HCM should be distinguished from run-of-the-mill HR. Because the traditional HR department typically oversees details and transactional activities that offer little
value to the organization, it's viewed as a cost center. Much like many basic IT tasks, conventional HR is about efficiency, compliance, and cost control.
In contrast, HCM is about strategic talent management, which optimizes and leverages every employee and delivers incremental value to the business. It's about building organizations that accept these challenges:
* Adapting to changing business conditions.
* Accessing information to make better decisions.
* Guaranteeing that business operations are secure and protected.
* Achieving stated business results.
* Capturing the skills, knowledge, and leadership of the retiring workforce.
* Leveraging technology and outsourcing services to create an environment that provides continuous support and learning.
* Ensuring that executive leadership sees HR as a strategic partner.
This is a big shift. Not unlike IT, HR needs to align with organisational strategy and demonstrate results, introduce change, and develop skills in a global enterprise. It must deal with the aging workforce, economic shifts to service jobs, 'hyper-competition', and the fast pace of emerging technologies, which have all changed the landscape of business as we know it. The fact that organizations are placing greater emphasis on people management as the critical element in determining success or failure should put HCM in the spotlight.
HCM is about leveraging the knowledge, creativity, and efforts of employees; recognizing the value they each bring to the table; and unlocking their potential. It can place decision-making tools in the hands of line managers and operations that are as close to the customer as possible, providing them with the information to make accurate value-based discernments.
Technology is what ultimately empowers decision-makers at the most critical point in their transactions, and true HCM can exist only if enabling and agile technologies are available. That's where the partnership with IT is needed.
Once talent-management processes are rolled out, organisations acquire a wealth of data on employees, including past performance ratings, leadership behaviors, skills and competencies, certifications, and career interests. A database should be built that allows this wealth of information to enlighten decision-making.
Again, technology is the key enabler, as integrated systems such as ERP can automate many HCM processes. For example, a manager doesn't necessarily need to know how to build an employee-development plan upon completing the performance review; the IT system can do it automatically.
Critical talent is the ultimate competitive advantage an organisation can have to differentiate itself from its competitors. To maximise that advantage, an organisation must proactively manage its workforce. It's not simply a matter of finding the best and the brightest; it's about defining how best to use critical talent to outperform the competition. Jointly leveraging technology and HCM initiatives creates a high-performing organisation.
Collaboration between HR and IT obviously has to be a joint effort. But since the human-capital management (HCM) strategy and will probably originate with HR, these action items are directed at CIOs and IT executives who may need to get up to speed on HR's requirements before they can form true partnerships.