42% of organizations plan to replace existing HR systems with Cloud; However only 24% realizing full business value
While businesses are pursuing cloud-based strategies to revolutionize the HR function, many are discovering HR transformation requires much more than simply plugging into the cloud to fully deliver on its promise of improvement, according to the recently released KPMG 2016 Global HR Transformation Survey.
Download the complete 2016 HR Transformation Survey report and follow the conversation on Twitter @KPMG using the hashtag: #HRsurvey.
According to the survey, expectations for cloud computing to deliver revolutionary new business benefits are largely failing to materialize. It found that leading organizations need to successfully integrate people, processes and technology, if they want to realize the greatest benefits from a cloud HR system.
Formerly known as the “Towers Watson HR Service Delivery and Technology Survey” now in its 19th year, the findings reveal an uneven landscape among businesses on the HR transformation journey – one largely dominated by unmet expectations as investment in cloud HR soars. [KPMG acquired Towers Watson’s Human Resources Delivery practice in September 2015.]
“Investment in cloud technology continues to soar, but it is clear that many organizations still need to implement intelligently designed strategies that are crucial in maximizing cloud computing’s impact,” says Michael DiClaudio, Advisory principal in KPMG’s U.S. People & Change practice. “Unfortunately, some HR functions are ‘hitting the wall’ and getting stopped in their tracks due to their narrow focus on new technology.”
Firms planning cloud-based HR systems
The global survey of 854 HR executives from 52 countries shows that a growing number of organizations that have selected new HRMS technology are opting for cloud-based solutions, while others are studying options and could opt for cloud.
Findings from the survey include:
• 42% of respondents say they will replace their current HR system with a cloud-based one
• 63% expect improved “value-added” benefits to the business
• Just 24% report that cloud HR brings the ability to reconfigure the HR function to drive great business value
Revealing that the promise of cloud HR benefits does not always match the reality, only 20 percent of businesses surveyed reported improved availability of workforce analytics, including predictive analytics, while 13 percent reported improved collaboration and feedback between employees.
This report comes on the heels of the KPMG U.S. CEO Outlook 2016, which also points to developing and managing talent and implementing disruptive technology. More than one-fifth of CEOs listed talent development and management as a key strategic priority, and two-thirds said their organizations are not doing enough to disrupt business models.
“Businesses need to overcome the common impulse to simply plug into new technology – what’s missing is a clear vision for the future of HR and strategic change management that brings the vision to life by integrating people, processes and technology,” said Robert Bolton, partner, KPMG’s Global HR Center of Excellence, and an author of the HR Transformation survey report.
“The survey should serve as a tale of caution on the critical need to include organization and change management for true HR transformation,” he added. “Without it, many firms have embarked on a journey that could be long, costly and ultimately unfulfilling.”
During February-March 2016, 854 executives from 52 countries participated in the survey. One-half of respondents were from companies that operated at a global level. Respondents represented a wide cross-section of industry sectors, led by Financial Services (19 percent), Industrial Goods and Services (15 percent), Technology and Telecomm, Media (14 percent) and Professional and Business Services (12 percent). Forty-four percent of respondents were from organizations with more than 5,000 employees, and 40 percent were vice presidents and/or heads of the organization’s HR function.
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