Why HR Software is Essential for Digital Transformation

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Digital transformation is an essential strategy for many businesses these days, as it creates huge opportunities to increase efficiency and productivity across the entire organisation, drive business growth and deliver value.

The CIPD’s People Profession 2030 report identified digital and technological transformation as one of five key trends that will shape the future world of work; while a 2023 report by the Hackett Group found that digital transformation is key in the current economic and employment landscape, with 45% of executives confirming they would be accelerating their digital transformation efforts.

HR software plays a pivotal role in any digital transformation initiative, as it enables people to make better decisions, respond more quickly to challenges, and save time through automation.

“HR software is essential for digital transformation and can enable an organisation to bring its people strategy to life,” says Helen Armstrong, CEO and founder of Silver Cloud HR. “Without the software to manage, record and analyse the people data that organisations need to make better decisions, many digital transformation projects would never make it off the ground or have the desired impact.

Automating and digitising processes

HR software modernises and streamlines HR processes, enabling the entire workforce to function efficiently in a rapidly changing technological landscape, adds Nancy Alsaberi, head of people at SaaS Genius.

“Digital transformation relies on data-driven decision-making,” she continues. “HR software centralises employee data, enabling HR teams to analyse trends, identify skill gaps, and make informed decisions about workforce planning and development. Also, modern HR software enhances communication and engagement through features like employee self-service portals, social collaboration tools, and recognition platforms. This aligns with the digital transformation’s focus on creating a collaborative environment that engages the whole workforce.”

According to Zoe Wilson, director of ReThink HR, data-driven decisions should be central to any business function – and the people function is no different.

“If HR has outdated systems that, for example, take an age to pull a report and still may not be accurate, it can affect the function’s integrity – from its employees to the boardroom. Support, or ‘enabling’ functions, should be working together to understand its people and performance. That’s hard to do if systems don’t work well together, or if data can’t be analysed across functions accurately.”

Digital transformation success through HR software

 HR software plays a key role in the success of a digital transformation project because it enables leaders, managers and teams to spend their time on strategic initiatives that drive innovation and business growth.

Helen Armstrong adds: “Digitising HR processes is the catalyst for success – enabling organisations to establish a foundation for holistic digital transformation – fostering collaboration, scalability and improved workforce management.”

A unified approach is also essential to the success of digital transformation, so it’s important to ensure all systems integrate seamlessly with each other and everyone is on board.

“Integration with other digital tools is hugely important,” comments Helen Armstrong. “A seamless flow of information across departments can contribute to the cohesive digital ecosystem that is necessary for transformation to thrive.”

Early discussions between business leaders are key to unlocking the potential of a full digital transformation, remarks Zoe Wilson.

“End user engagement, awareness and upskilling to use new technology is essential to its success,” she says. “There is no point in having amazing systems, if no one fully understands its capabilities or how to utilise them. It’s about ensuring all key stakeholders have a seat at the table when scoping, implementing, rolling out and assessing return on investment. They need to have ‘skin in the game’ and understand how all the moving parts will work together, not in isolation from each other. Integrations are a huge timesaver and make everyone’s lives easier if scoped, configured and used correctly – but it often takes a collaborative approach to get the details right.”

Engaging employees

The employee experience is also a vital part of digital transformation because much of the success of that transformation relies on a motivated and engaged workforce. Plus, in the age of hybrid and remote working, never has there been a more important time for organisations to ensure employees have a positive experience as this leads to higher engagement, productivity, and retention rates. And this is where HR software can help.

“Employees who feel supported and connected are more likely to stay motivated and perform at their best, regardless of their location,” says Nancy Alsaberi. “Effective HR software facilitates these needs and allows for seamless communication, collaboration, and access to resources, ensuring that remote and hybrid employees feel connected, supported, and valued.”

As team members are often now more dispersed, the importance of personalising the employee experience has grown, says Helen Armstrong. “We all work in different ways, we are motivated in different ways and, as such, need to be communicated to in different ways. 

Creating a cohesive and engaging work environment is a tough challenge and made even more difficult in the absence of HR technology that can facilitate all the above. The right HR software plays a pivotal role and can enable the tools and processes needed for virtual onboarding, as well as facilitate remote performance assessments and maintain transparent communication to engage employees.”

On the flip side, we know that poor workplace technology can have a detrimental impact on employee experience and performance. For instance, outdated, inefficient or unreliable software can often lead to dissatisfaction, disengagement, and increased stress, which in turn can lead to higher turnover.

“Ineffective technology hampers communication and collaboration, especially in remote or hybrid setups,” remarks Nancy Alsaberi. “Miscommunication and difficulty in sharing information can lead to misunderstandings and errors. High-performing employees may become disengaged or even consider seeking opportunities elsewhere.”

Enhancing employee experience

However, through using streamlined, automated processes, via a robust and unified HR platform, the employee experience can be vastly enhanced. For example, the more transactional elements of HR software, such as booking leave, filing expenses, or accessing documentation, can be a valuable driver of good employee experience.

“These transactional elements contribute to a positive employee experience by promoting convenience, autonomy, and efficiency,” says Nancy Alsaberi. “When employees can easily request time off or access information with just a few clicks, they experience a sense of empowerment and reduced administrative burden. This, in turn, frees up their time and mental energy to focus on meaningful tasks, leading to higher job satisfaction and a greater sense of value within the organisation.

“Easy-to-use interfaces and intuitive navigation reduce frustration and anxiety related to technology use,” she adds. “This promotes a more positive perception of the organisation’s technology landscape. Streamlined processes also showcase the organisation’s commitment to providing a modern and user-friendly work environment, further enhancing the overall employee experience. Providing modern and efficient HR software also signals to employees that their workplace cares about their experience.”

Self-service features for tasks such as annual leave requests can serve to empower employees, adds Helen Armstrong.

“It gives them autonomy, makes them feel trusted and enables them to achieve what they need to in a quick and simple way. This reduction in manual processes and more streamlined approach saves time and enhances transparency. When employees can effortlessly manage routine tasks, their engagement increases as does their perception of the company’s commitment to their wellbeing, which helps to shape a positive employee experience, fostering a culture of efficiency and empowerment.”