HR technology is the number one area of investment for HR leaders, however many leaders have a high level of regret with their HR technology purchases, according to Gartner.

We spoke with Harsh Kundulli, senior director analyst in the Gartner HR practice, to discuss how to prioritize the right technology investments, what makes a strong HR technology strategy, and how HR leaders can avoid regret with their purchase decisions.

Journalists who would like to speak with Harsh Kundulli regarding this topic can contact Mary.Baker@gartner.com or Gerri.Weinberger@gartner.com. Members of the media can reference this material in articles with proper attribution to Gartner.

Q: How can HR leaders avoid regret with their HR technology purchases? 

A: The key to avoiding regret with HR technology purchases is to create an overarching HR technology strategy to guide purchasing decisions. Without a robust and frequently updated HR technology strategy, organizations respond reactively to a specific technology need or crisis, rather than with calculated intent. They fall into the trap of buying too many and often expensive technologies that don’t work well together to achieve desired HR and talent outcomes.

To overcome this challenge, HR leaders must create a holistic technology strategy that incorporates these four key ingredients (see Figure 1): 

• Define Business Outcomes: Articulate a vision that defines a list of prioritized business, HR, and talent outcomes for the organization to achieve with HR technology, such as employee experience, cost optimization, or talent agility. This should act as the HR technology north star.
• Capture Gaps and Requirements: Align on the HR areas or business capabilities the organization must prioritize for technology investment over the next three years. What are the organization’s gaps and needs within these prioritized HR business capabilities?
• Determine Best-Fit Future State: Assess the technologies on the market to understand their pros and cons. Often, HR leaders will realize that no single technology will meet all their needs. They must look at their holistic “portfolio” of HR technologies and assess which combination is the best fit to enable their prioritized HR business capabilities.
• Develop Roadmap: Develop a roadmap that defines all the initiatives the organization must achieve - spanning people, process, technology, and data. This type of holistic approach will drive organizational readiness for the adoption of HR technologies.

Q: Why are HR technology leaders regretting their HR technology purchase decisions? 

A: Over the past three years, we’ve seen the scope of the HR function drastically increase. HR leaders are being asked to do more and getting requests on a wider variety of topics. HR leaders are increasingly relying on technology to respond to these new requests.

HR leaders are struggling to prioritize the right technology investments, due to several challenges:

• Managing competing internal priorities: What HR leaders, IT leaders, managers and employees want from HR technology may not always be the same. If HR leaders let the loudest person in the room have their way, they could be led down a path to a “wrong” solution that is not a good fit functionally, technically, or culturally for the organization.
• Navigating a complex vendor landscape: Today’s HR technology market is extremely saturated  and many vendors may claim to do it all. The key for HR leaders is to choose the right technology for the right business capabilities. If they get wrapped up in vendors’ marketing messages, they may end up buying too many technologies with overlapping, underused or missing capabilities and fail to realize a return on investment.
• Tackling emerging technology: Both the challenges above are exacerbated when HR leaders consider emerging technologies. For example, a Gartner survey of 105 HR leaders in June 2023 revealed that 76% agree they will be lagging in organizational success if they do not adopt and implement generative AI within 12 to 24 months. But there is a general lack of clarity on the low-risk, high-return use cases for generative AI. We have seen that technology investments without clarity into how it will be used inevitably lead to disappointment.

Q: Should HR leaders collaborate with IT leaders while creating an HR technology strategy? 

A: Absolutely. HR leaders have a big opportunity to engage and collaborate with IT leaders by incorporating HR business capability modeling (BCM) as part of their technology strategy creation. 

HR BCM is a technique used to visualize what an organization should do within the HR function to achieve desired business and talent outcomes using its HR operating model. Creating a successful HR BCM requires identifying and documenting business direction and strategy, disruptive trends, the concerns of business and IT executives, and target business outcomes. 

Implementing HR BCM can help HR and IT leaders:

• Agree on a common view of the HR function’s current and desired future business capabilities.
• Prioritize HR areas for technology transformation and connect technology investments with business and talent outcomes.
• Assess HR technology portfolio options and choose the best-fit portfolio functionally and technically.

About the Gartner HR Practice

The Gartner HR practice brings together the best relevant content approaches across Gartner to offer individual decision makers strategic business advice on the mission-critical priorities that cut across the HR function. Additional information is available at http://www.gartner.com/en/human-resources/human-resources-leaders. Follow news and updates from the Gartner HR practice on X and LinkedIn using #GartnerHR. Members of the media can find additional information and insights in the Gartner HR Newsroom.

Mary Baker
Gartner
Mary.Baker@gartner.com

Gerri Weinberger
Gartner
Gerri.Weinberger@gartner.com