How on earth can it be August 1st? For that matter, how on earth can it be 2017? After taking off three weeks for vacation and business travel commitments, it’s time to be back considering new research and data of interest to the HR community. And here’s an interesting report from Oracle and MIT Technology Review.
My friends at Oracle sent it to me, and I’m glad they did. The report might signal the start of a new era of respect, cooperation, and, dare we say, organizational friendship between HR and Finance. Finance and HR: The Cloud’s New Power Partnership is a recent publication providing interesting data, analysis, and commentary about the Cloud’s opportunity to drive greater partnership, cost savings and actionable data through a strong HR and Finance relationship. It’s a quick read at 14 pages, and it’s based on survey data collected from 700 respondents that included senior managers and their mid-level management counterparts from Finance, HR, and IT, as well as more holistically inclined C-level executives. Organizations participating were from the Americas, Europe, the Middle East and Africa, and Asia. About 75% of the participating companies generate annual revenue between $250 million and $1 billion from a range or industries. So a global sample of large employers. Just the segment that would be wrestling with the Cloud opportunities. And just the segment that would see value in a closer relationship between HR and Finance.
Among businesses that participated in the survey, 35% plan to create a shared finance and HR function within a year… 42% of respondents say they are motivated by improvements in productivity and performance. Respondents view closer finance and HR collaboration in the cloud as a strategic necessity, promoting operation excellence and accelerating innovation.
Wait a minute. I think I felt the ground move! Shared Finance and HR function? Within a year? That’s an eye popper right there. Not because it doesn’t make sense: it really does. HR is becoming more data driven every day. And Finance has been data driven for years. Getting them together to analyze people data’s impact on the business and its growth plans is critical. And getting HR and Finance together through a technology bridge makes sense. Both HR and Finance need more and more data to manage the business. More and more analytics capabilities. More and more ability to predict the future based on today’s data. It’s fascinating to me that technology may be the puzzle piece that finally brings HR and Finance together. And the results – so far – look substantial:
These outcomes, though pretty generic, show an enormous upside opportunity for HR and Finance to migrate jointly to the Cloud. When do we ever get these kinds of outcome ratings on large-scale organization change initiatives? Or just on HR projects? Or just on Finance projects? It seems as if organizations are succeeding in generating real benefits from moving to the Cloud by creating teams from natural adversaries. And how interesting it is that the IT team is the attractor beam bringing HR and Finance together.
The report shares a few short case studies – from the education, energy, and financial services sectors – that underscore the benefits of integrated ERP-HCM Cloud systems deployments. (Note: this is a white paper. Underwritten by Oracle.) There are a number of interesting graphs in the report all underscoring these benefits. And they’re interesting to think about.
This is a quick read and it could help inform your thoughts about moving more HR functions to the Cloud. And to get you thinking about the inevitability of working more closely with your colleagues over in Finance. Better to have some informed opinions before your CEO, CHRO, CFO, or CTO starts asking questions…
HR professionals worry a lot about whether their CEO thinks they are strategic business leaders. Turns out it isn’t the CEO that HR professionals need to worry about. It’s the CFO.
This is according to global survey data collected from three Oracle/IBM sponsored research reports produced by the Economist Intelligence Unit in April and May 2012. CEOs made up 57% and CFOs made up 43% of the 235 respondents.
The resulting infographic is one of the more readable and useful ones of its type that I’ve seen. Among the data points:
80% of CEOs and CFOs want the head of HR to be key in their company’s strategy planning
Only 38% of those CEOs and CFOS say that is currently the case
Only 10% say the head of HR is “extremely” key in strategic planning right now
Only 37% of CEOs and CFOs say their relationship with the head of HR is “close and trustful”
Just 28% of CEOs and CFOs say their relationship with the head of HR is among their “most valued” professional relationships
But here are the real zingers:
But here’s the real irony: CFOs are more confident about HR’s understanding the needs of the business than they are about the business of HR! Low confidence by CFOs that HR can lead the HR function, can evaluate employee performance or can identify and recruit key talent.
That’s not good news – especially since CFOs spend significantly more time with CEOs than CHROs do. I wonder what the CFO and CEO are talking about with regard to HR? Is the CFO supporting the CHRO? Given this survey data, I wonder.
Maybe CEOs aren’t HR’s biggest challenge after all. Maybe CFOs are the ones toward whom HR professionals should be aiming their strategic attention. Maybe instead of pining after furniture HR should be pining after spreadsheets!
The survey – conducted in May 2012 – included 235 C-level executives, 134 of whom are CEOs. A total of 38 countries were represented from North America (47%), Western Europe (40%), Eastern Europe (8%) and the Middle East (4%). A range of industries were included and half of the companies had $500 million or more in annual revenues. Additionally, 6 in-depth interviews were conducted with 4 CEOs and 2 respected academics.
While the Economist Intelligence Unit authors tried to spin the results in a positive way, there’s just no getting around the conclusion that even big company CHROs are having a hard time getting access to the strategic business discussions at the top of their organizations. While 76% of the surveyed CEOs say their relationship with the head of HR is close and trustful, only 55% report that the head of HR is a key player in strategic planning.
What I found really interesting was the perception by the authors that the way to greater inclusion in strategic decision making is to become “a confidante and informal executive coach” to the CEO. “If the CEO has repeatedly relied on the head of HR for certain important matters, and they still see eye to eye, he or she is more likely to invite the HR head to participate in other areas as a matter of course.” So, developing a personal, “therapeutic” relationship with the CEO is the first best practice the report’s authors recommend. But you’re doomed, I guess, if you don’t see eye to eye.
Becoming liked and trusted by the CEO is the way forward to weighing in on strategic business decisions. This, despite the finding that 50% of the surveyed CEOs spend 5 hours or less a month – in either one-on-one or group settings – with their head of HR. I wonder how you figure out if you even see eye-to-eye in less than 5 hours a month.
The report has lots of interesting – and depressing – data, and you should probably take a look. But I think this gets filed under: Duh!
The Economist Intelligence Unit’s bottom line appears to be that CHROs whose CEOs like them get more involvement in the business. I hope IBM and Oracle didn’t spend big bucks on this research.
*Here’s Sally Field’s famous Oscar acceptance speech:
Last year I wrote about the HR Technology Conference and titled my post “HR people doing business. Wait. What?” I attended this event for the first time last year and was struck by the business activity going on at the conference. It wasn’t about swag; it wasn’t about recertification credits; it wasn’t about getting autographed books. Some of it was attendees really having buying conversations with vendors; some of it was vendors doing business with other vendors; and some of it was organizations having hiring discussions with candidates who happened to be attendees, vendor employees, speakers, etc. And all that was happening this year as well. You just can’t escape the feeling that business is going on when you walk the halls and floor of this conference.
There was an added dimension to the floor this year. And maybe it was there previously and I just wasn’t aware. But there was lots of money at this conference looking for investment opportunities. I talked with a number of VC and other investors who came to see what was new and to make relationships for investment purposes!
There’s a lot of money flowing into the HCM space these days – untold numbers of VC outfits; strategic buyers like IBM, Oracle, Salesforce; the public markets with IPO offerings like Workday. With talent issues being top of mind for every business leader with a Chief in their title, it’s no wonder that money is seeking opportunity in this field.
And you could absolutely feel it at HR Tech which concluded in Chicago yesterday. Investments were being poised to happen in start-ups as angel investments, start-up investments, series A, B and C investments as well as outright purchases. The talent management issues of organizations all over the world are creating opportunities for innovative solutions that will help us get better talent more efficiently with a great likelihood of longevity. That’s what we want as business leaders. And money was there looking for opportunities to make that happen.
As Mark Hurd, President of Oracle, told the conference attendees, “I want the best people at the lowest cost that I can get them.” Exactly. As an organization leader who “gets” HCM’s value, Hurd is no longer in the minority of C-suite leaders. And that means greater emphasis on productivity and efficiency and cost. And that opens the door wide to innovation and investment.
The HR Technology Conference is the one conference to attend to find out how to make your HCM infrastructure more productive, more efficient, more cost effective and more future oriented. It’s the one conference to attend to meet senior business leaders who are focused on winning through talent and systems to manage that talent. It’s the one conference to attend to get a glimpse of what will be possible in the future to ensure organization success. If it isn’t on your agenda for next year, it should be.