2025: What will your HR Technology and Service Delivery model look like?
As the astrophysicists at the European Space Agency needed to spend several years developing the Rosetta space probe mission before its launch in 2004; a 10-year operating timeframe and a 4-billion mile journey to comet 67P/Churyumov-Gerasimenko, we are also faced with a challenge (maybe not quite so tough) of planning what our HR Technology and Service Delivery models will look like to support our businesses in 2025 and beyond.
When you consider a 2-year timeframe to select your HR Technology and then implement a transformed HR operating model with a 7 to 10 year operating lifespan we are suddenly in 2024 – 2027.
HR Technology and its supporting Service Delivery model is rapidly moving away from the traditional On Premise behemoth HCM platforms with the Service Delivery model supplied by a disparate, non-integrated vendor base across Payroll, HR, and Application Management outsourcing services.
The HR technology landscape is clearly transforming through a hybrid phase with a variety of enterprise Cloud HR platforms, function-specific Cloud tools, and the legacy On Premise HR platforms operating interdependently; with the future still uncertain as to how dominant the enterprise Cloud HR platforms will become versus the niche function-specific Cloud tools. What is clear is the Cloud operating concept is here to stay; along with the critical realization that customization is the death of innovation.
So how does this affect the Service Delivery ‘wrapper’ in my 2025 vision? By embracing the concept of outsourcing the transactional and administrative on a global scale and across all related disciplines, an organization can focus on execution of the broad business and specific HR strategy without trying to develop all of the services internally. This (re)focus on ‘core business’ will allow the adoption of world’s best practice and evolves the services wrapper to align with business and technology demands while reducing operational costs.
- Global Payroll Outsourcing is critical for the 2025 model as it ensures one vendor will manage all payroll requirements, provide standard integration to the HR technology (Hybrid or Cloud), deploy global process standardization, meet compliance needs, reduce operational costs, and reduce internal vendor and contract management issues.
- Transactional HR Outsourcing will become widespread since the standardized Cloud HR platforms have become more outsourcing friendly with their non-customized, fast deployment, which, combined with maturity in outsourcing services, proven global process standards, faster time-to-benefit and cost reductions is driving organizations to outsource the transactional and administrative HR processes.
- Cloud HR Release Optimization is critical as Cloud HR vendors are delivering automatic and mandatory platform updates every 3-6 months. Your 2025 HR technology landscape, potentially featuring multiple IT platforms, will need an HR technology specialist to ensure the optimization and integration of the entire HR technology operating model.
- Hybrid HR Application Management is the services wrapper which plans and executes technology architecture management including system upgrades, configuration changes, testing, data migration, and system administration across multiple HR platforms
- Analytics & Reporting are central to the HR strategy execution and within the 2025 HR services delivery model it becomes a specialized service provided by an outsourced services vendor who can use their scale, platform knowledge, and global best practices to deliver the analytics required.
My prediction for the 2025 HR Technology and Service Delivery model will feature a hybrid HR technology environment with a single, global, specialized vendor providing a full catalogue of services including Payroll Outsourcing, Transactional HR Outsourcing, Cloud HR Optimisation, Hybrid HR Application management, and an analytics and reporting service.