6 Best Practices To Make the Most of Your HCM System Implementation
Here’s how cloud-based HCM systems are playing a fundamental role in helping brands create the “irresistible organization”.
While companies require human capital management (HCM) systems, using them can be challenging, with unsatisfactory results. Kathi Enderes, senior vice president of research, Josh Bersin Company, discusses a few best practices that can help CHROs make the most out of their HCM systems to improve the employee experience.
All organizations need human capital management systems (HCM). But as anyone who has ever worked on one will know only too well, they tend to be large, costly, and time-consuming, and there is a bewildering amount of choice at the enterprise level. Furthermore, many companies and leaders end up disappointed with the results.
We wanted to see if there was a better way to derive HCM success, so we examined systems implementations worldwide to see what best practice exists out there. Over the last 18 months, we gained insight from 25+ companies on what excellence with Cloud HCM looks like.
One of the first and most significant things we found is that HCM success (or failure) is never down to just the technology. In fact, technology deployment is the easy part for many projects. How you involve employees and line managers with it and what partners and support systems you have in place prove far more important in practice. Some of the key lessons we identified are detailed below.
Never Be Frightened to Customize
When you buy a new house, you want to make it your own and ensure it works for you. You change the furniture etc., to make it feel like your home. Human capital management systems are the same, as no two HCM users have the same requirements. We witnessed this when we saw very different use cases for staffers at large healthcare organizations and McDonald’s. An ER nurse needs something very different from a drive-thru restaurant worker, for instance. Therefore, look to understand your workforce’s unique requirements and needs and adapt the system to suit the way that works best for your environment.
And, beyond initial implementation, never feel you are locked in forever. Like the same way you update and maintain your house, keep talking to your employees and flexing the system to ensure it keeps up with their changing needs. Take McDonald’s, for instance. The firm uses a modular approach with Oracle Cloud HCM for core HR, payroll, and time, ServiceNow for transactions, and Paradox to make store hiring as fast as ordering a meal. Combined with the company’s HR transformation to a product model, the HR team knows it is an ongoing project, not a once-and-done implementation. And toward that, “How do we standardize processes, obtain greater insights into our employee data, and at the end of the day, make the experience simpler and seamless so our employees can spend more time taking care of our customers?” explains Michael Oldham, senior director, HR operations, McDonald’s Corporation.
See More: What is Human Capital Management (HCM)? Definition, Process, Platforms (tools) with Examples
A Radically Simplified and Better Employee Experience
Sometimes in HR, we tend to think systems or processes that seem simple to us should be as easy to use for other employees. But an ER nurse or their manager does not have time to work through a five-step approval process or finish a process with seven layers of screens that seems straightforward to you. They need something quick and intuitive. You should remove this upfront complexity and instead migrate it into business rules or the back end of the system.
Why does this matter? Ultimately, your employees can only give as good a customer experience (CX) as you provide them in the employee experience (EX). So, while they seem like technical implementations, HCM systems are at heart EX solutions.
To deliver effective EX applications, you need to involve your employees. The pandemic posed significant challenges for Tata Chemicals, for example, when they aimed to create a “single version of the truth” and develop a better experience for their manufacturing employees. Involving them along the way, including naming the new system “MyWOW” (for My World of Work), was key to the team’s success.
You need to design your HCM system with the employee experience in mind: is this process easier to accomplish now than before? Take AirAsia India, for example. The airline is hyper-focused on an amazing customer experience and does not want its employee experience to lag. Working with system integrator Tata Consultancy Services, the HR team decided to leverage Oracle Cloud HCM as a basis to simplify and streamline for their over 3,000 “AllStars” (as they call their employees). “Every process should be a simple, three-step process. If it becomes too complicated, people won’t be able to use it,” explains Anjali Chatterjee, CHRO, AirAsia India.
Use HCM as a Foundation for Talent “Intelligence”
If a great EX is a foundational layer, in the middle, you need what we term talent intelligence.
Talent intelligence is a way to keep scoping the future workforce and its needs. It includes understanding what skills your competitors are hiring for versus what skills you have in the organization. It asks what capabilities are emerging in your markets and which ones are declining. And what are the key trends in terms of skills, capabilities, roles, and jobs in your market to future-proof the organization?
A good HCM system is a foundation for talent intelligence because it contains your job roles and definitions and pay scales, employee and data, and your demographics for your DEI work. I would go so far as to say that deriving the insights you need is impossible without HCM, so setting up your HCM properly from the get-go is key. In fact, one of the recurring HCM disappointments we discovered in our research was that thinking about the insights you want to derive after the fact will not work. For instance, if you implement the system from a transactional perspective and then need to extract insights on skills, it will be challenging to get that data. Thinking about what analytics and insights you want to retrieve up front is, therefore, important.
Supporting Employee Growth
A huge target for any cloud-based HCM journey you embark on is a focus on empowering your people to grow. We call this growth in the flow of work. Again, that is practically impossible without an HCM in place. If you do not know what your organization needs, how can you work with your employees to move in the direction you need the organization to go? A close connection between your business and people strategy and all your people systems is becoming more and more important.
The Right Partner for Cloud-based HCM Success
Different companies in different industries in different geographies all told us the same — an HCM system integrator partner that understands your industry and specific geography at a detailed level is critically important.
A good system integrator will have many clients in your geography, and they can offer you the benefits of lessons learned from other customers. Judiciously leveraging that knowledge can make or break an HCM implementation. Equally, working with a system integrator that does not reflect your organization’s values, culture, and leadership models can negatively impact the success of your move to a new way of doing HCM.
Simplify the Technology Stack Beyond HR
Oftentimes, companies migrate to a single cloud-based HCM from a legacy environment encompassing dozens or even 100+ systems.
All of these enterprise-level finance, supply chain, and marketing systems are supported by or integrated with the HCM system. This level of integration could simplify not just your HR tech stack but also your wider tech landscape.
If you end up with a simplified employee experience because your tech stack is less complex, any employees who have to touch these systems will have a simpler experience, too.
And that is an outcome that will definitely not disappoint.
What best practices have you implemented to make the most of your HCM systems? Share with us on Facebook, Twitter, and LinkedIn.
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