HR transformation and the cloud | KPMG | AU
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HR transformation and the cloud: set and forget won't work

HR transformation and the cloud

The power of the cloud has not been missed by Human Resources functions, but transforming to the latest technology won’t reap rewards if people aren't engaged early and focused on gaining optimal outcomes.


Partner, People & Change

KPMG Australia


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As Human Resources (HR) functions seek to transform their operations to compete in a digital, fast-paced business environment, they are rapidly taking up cloud computing solutions with the goal of achieving greater efficiencies, insights and a competitive edge in the recruitment market.

However, KPMG's 2016 Global HR Transformation Survey has revealed that many organisations are not gaining the full benefit of their investment.

"If you look at transformation projects in any context, including HR transformation, 70 percent don’t achieve what people expected," says Catia Davim, Partner, People & Change, KPMG Australia. "When you go into why that happens, nine out of 10 key factors are people and change management related topics."

Organisations that take a 'plug and play' approach to the cloud are failing to recognise the importance of taking their people on the transformation journey, resulting in lack of engagement with the new ways of working – no matter how beneficial.

"When you push and go live with systems, you can have marvellous machinery but you may not even use 50 percent of its capabilities. This is usually because it is not aligned with the interests of the business, it was not designed with the business, or it was not designed with a business outcome in mind," Davim says.

Cloud appeal

It is easy to see why HR functions are embracing the cloud. The advanced systems on offer can help maximise recruitment success, offer deep data and analytic insights to aid decision making processes, smooth out talent management, aid employee/manager communications, assist with leadership planning, and at the simplest level ensure all employee details and payroll activities are well managed.

"The big difference between cloud and non-cloud is the ability to create a system that is permanently being made up-to-date with the latest innovation within the system itself. It makes the whole process far more agile," she says.

Creatures of habit

Despite these obvious benefits, employees often find change daunting, prefer their old ways of working, or may not see the point in change if there is no immediate benefit to their own role.

"The big challenge is that change relies on human behavior and engaging people to change the way they do things. You can spend millions on going live with systems, which is wasted if the system is badly used and you don’t gain the benefits."

This issue must be tackled from the outset of any transformation project, right when the business case for change is being developed, Davim says.

"People focus on the cost for the technology, but underestimate how much it is going to take to engage people to change their behaviour and interact with the benefits of the system."

Often the people who define the business plan for transformation are not necessarily the ones to implement it, or use the end product. For example it could be a project management team assigned to upgrade systems, or the Information Technology department selecting and rolling out the change.

"When you get the new technology people are confident, but then they get surprised if the business is not extracting the benefits."

Aligning with the business at every step

This is where a properly strategised people and change management process is essential, in order to ensure that the technology in fact suits the needs of those using it, and so people are engaged in the change journey from the start.

"There needs to be a balance between the project team that is pushing ahead in terms of delivery, but also connecting with the business so that they are designing things that are going to create real solutions for the business. It can't be done in isolation," Davim says.

It is vital that any transformation must be business strategy driven, not technology driven. Any transformation must start with a business goal and follow a roadmap to achieve that goal.

"The focus of change must be where you want to take HR management and how it is helping to drive your strategic agenda. Technology should be a function of the business, it should not be primarily a technology implementation."

This approach will help people see the benefit of change in their own role, as well as for the broader business vision.

Outcomes are the key

A traditional measure of success in project management is delivering on time, and on budget. But Davim says the real indication of impact comes from asking deeper questions of the HR function.

"Are we actually achieving the proposed outcomes? Are we becoming more efficient in the way we deal with the business? Are we becoming faster in the way we recruit people? Are we attracting the right talent?"

Answers to these questions will show whether the implementation was powerful, or more engagement with the people at the frontline of the change is needed.

"It takes engagement at all levels – from leadership to ensure strategic alignment, to middle management to ensure the department is in alignment and the frontline who are the implementers of the solution. This all makes a transformation project easier to implement, and ultimately helps bring the returns."

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