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This Time, It’s Strategic

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

Stepping Up

Even as HR departments learn how to win the hearts and minds of IT, they are also forging tighter connections to finance. For example, Zurich’s HR department not only partnered with the company’s finance team to put metrics online, but it is also developing a purchasing system linked to the HR system to drive expense approvals.

For their part, CFOs seem to be of two minds about the value of HCM. When surveyed by CFO about what steps are needed to improve HCM, the top answer, cited by almost half of all respondents, was “increased use of technology.” But only one in four respondents plan to invest more in HR IT in the coming year.

Accenture’s Jensen says that when his firm surveyed a broad swath of C-level executives regarding workforce effectiveness and productivity, CFOs emerged as the most skeptical group. “CFOs recognize the value of human capital,” he explains, “but they struggle with how to best spend money on it in order to get effective results.”

Jason Averbook, CEO and co-founder of Danville, California-based Knowledge Infusion, an HCM consulting firm, suggests that if HR departments don’t make the case for their strategic value, they may cease to exist. At most companies, automation and outsourcing have reduced the administrative cost of HR to a fraction of 1 percent of revenue, leaving little room for gains. If HR can’t explain its strategy for optimizing the workforce, the cost of which can approach 60 to 70 percent of revenue, then a chief learning officer or chief performance officer may emerge from some other department within the company.

While it’s a rare head of HR (or even HCM) who has the word “chief” in his title, no one in a senior role is prepared to be left handling the administrivia while some other executive leads strategic workforce initiatives. Bolstered by their experience in automating the grunt work, HR executives vow to further leverage IT in more compelling ways. Perhaps they now realize that in order to optimize the performance of the rest of the workforce, they need to optimize their own.

Scott Leibs is editor of CFO IT.


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