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This Time, It’s Strategic

Technology has streamlined the human-resources department. Can it be pushed to do more?

It’s time to look under the human-resources hood again. After an extensive technology overhaul in HR, employees now routinely use a number of self-service applications to complete tasks like enrolling in benefits programs, managing vacation time, and making sure their personal information is up to date. With much of this “administrivia” now automated, companies hope they can turn their attention to developing a more flexible, competent workforce. That’s where the CFO comes in. These more sophisticated automation efforts will be complex and expensive. And they will require dynamic and integrated systems, which can be developed only through a close partnership between HR and IT.

That’s easier said than done. At first glance, IT and HR couldn’t be more dissimilar. One relies on an army of techies to harness the power of a vast array of computers, software, and related systems, while the other relies on a staff of highly communicative (in theory) “people persons” to guide employees through any number of job and personal issues. HR’s success hinges more on “high touch” than high tech.

But look more closely and it becomes apparent that they actually have a lot in common. The IT department believes that technology still has much to offer by way of strategic advantage, a promise HR is working to deliver as well. Both departments have fought for greater corporate legitimacy, and both view outsourcing as a threat and an opportunity.

Yet they crave more respect. Often perceived as cost centers, HR and IT departments believe they can contribute far more to the organization than simple efficiencies. Increasingly, HR departments can point to a range of IT initiatives as proof they are continuing to evolve toward a more strategic role, while IT can point to those same initiatives as proof that technology can go well beyond the transactional to the transformational.

When Premera Blue Cross, a regional health plan that serves more than a million people in Washington and Alaska, reorganized its HR team last year, IT considerations were front and center. The Montlake Terrace, Washington-based organization created a new HR technology department, uniting a disparate group of IT specialists who were previously dedicated to such specific HR functions as recruiting, compensation, and training. The goal, according to Barbara Magusin, senior vice president for HR at the $2.8 billion company, was to form “a creative think tank focused on how IT can serve human-capital management.”

Human-capital management (HCM) is a term much favored by forward-thinking HR executives (and even more so by the consultants and vendors that serve them) because it emphasizes the skills, experience, knowledge, and potential that employees possess. By recruiting the best people, training them, and retraining them as businesses adapt to new situations, companies can, the argument goes, gain a significant competitive edge over rivals that treat employees as a mostly undifferentiated pool of laborers to be added or shed as conditions warrant. The ultimate employee benefit, in a sense, is to value workers more highly and develop them accordingly.


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