Critical success factors influencing digital HR transformations

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Critical success factors influencing

digital HR transformations

Martijn Feikens (s1481592) M.F.Feikens@student.rug.nl

P.O. Box 800, 9700 AZ Groningen

Date of submitting: Augustus 3, 2014

University of Groningen, Faculty of Economics and Business Masterthesis Change Management

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Abstract

This exploratory research builds heavily on the study on HRM implementation levers done by Emans, Boeve, and Postema (2011). The research focuses on the critical success factors influencing digital HR transformations, trying to fill the literary gap about this subject. Data was collected using semi structured interviews of implementation experts. Results show four factors that were

hypothesized to be influencing the success of digital HR transformations. In addition to this, four factors were found that were not hypothesized. Supported in both literary research, and this research are the factors of the simplicity, or rather intuitivism, of IT systems used, attention to organizational (both internal and external) politics, attractiveness of the IT system implemented, and the planning of digital HR transformations. Strengths and limitations are discussed, and it is

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Samenvatting

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Introduction

The Human Resource (HR) function is at the center of sweeping changes. Digital technologies are radically impacting the manner in which employees and prospects connect and communicate with organizations. Barring a few exceptions, however, HR functions in most organizations continue to stay rooted in traditional modes of engagement. The talent of the 21st century rapidly graduates towards the use of mobile and social platforms to search for jobs, uses digital technologies to interact with possible future employers, and existing employees use digital technologies to express opinions on workplace issues. All the while HR is lagging behind in the adoption of such technologies (Forbes, “2013: The Year of Social HR”, 2013).

While leaders in HR believe that it is important to implement new strategies to attract, retain, and develop new employees, 75% of them feel they are lacking in the use of social networking technologies (Spitzer et al., 2013). In order to adjust to the trend of digital and maintain the interest of job seekers (Talent HQ, “45 Mobile Recruiting Tips and Trends From #mrec”, 2013), organizations need to adapt to the increasing use of digital technology. Only 26 of the fortune 500 companies have a mobile optimized process to help prospects apply to jobs. Three-thirds of companies still rely on traditional HR recruitment methods such as posting on job sites, and posting advertisements in newspapers or magazines. HR executives recognize that it is important to digitize HR, but feel their company is lacking in progress (Spitzer et al., 2013). Mercer consulting (2006) reported that 50% of HR functions are undergoing a form of transformations, while 33% were planning to either undergo a transformation, or had just completed a transformation effort. Business outsourcing solutions provider ADP (2007) confirmed a similar overview; in a survey of global companies, 85% were undergoing a form of HR transformation, with cost reduction as the primary reason to undergo such a transformation. Secondary reasons that were mentioned are efforts to improve strategic

capabilities of the HR function.

The current trend that is seen in organizations that try to digitalize HR and adapting to modern methods of attracting, retaining and developing new employees, is to implement new HR information systems. Traditional systems, often included in Enterprise Resource Planning (ERP) systems, focused on keeping electronic personnel files, automating payroll, monitoring time and attendance, performance appraisal and some simple form of talent management. New digital HR systems focus heavily on the entire process, while simultaneously being flexible in costs and maintenance. Modern systems are built to streamline the entire HR process with modules offering (online) recruitment, on-boarding, core HR functions (employee data, payroll), objective

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calibration based on the performance and feedback of these tools. Other modules deal with HR functions such as compensation, learning and development of employees, a social platform that can be used to interact with future employees, talent management, succession management, reporting and HR analytics, and strategic workforce planning. These types of systems are often offered as Software-as-a-Service (SaaS), often also called ‘Cloud’ services, meaning they are not running from computers in the building of the organization, but from the supplier site. This allows organizations to be flexible in terms of costs, licenses, location from where the software is used, and maintenance, control and updates. The shift from traditional systems to digital HR systems is in part due to the possibilities it offers, though the main reason is often the cutting of costs. The downside of

implementing such digital HR systems (as a SaaS solution), is the room for customization. Whereas traditional eHR systems offered many possibilities to customize and develop the system (since it is running on local servers), SaaS solutions rely heavily on standardization (Lu & Sung, 2009).

As mentioned above, some of the main advantages of digital HR systems are improved efficiency of HR processes, reduced administrative effort, extended collaboration both internally and employer collaboration with prospected employees, but most often to reduce operating costs of the HR department (Spitzer et al., 2013). Traditionally, HR’s role was primarily driven by administrative and transactional aspects. However, these tasks are time consuming and curb HR’s critical

involvement in strategic and business issues (Ulrich, 1997). Thus, with the advent of digital transformation of HR processes, given appropriate management support the processes can be streamlined and standardized in order to encourage more strategic involvement of HR roles in business issues (Capgemini Consulting HR Barometer, 2013). Another driver is to process digitization results in the reduction of administrative effort, in the long term boosting employee morale, as it enables them to make more effective and worthy contributions to the organization. Extended collaboration of HR with other departments and enable strategic decision-making is one more driver to implement digital HR systems. Making social networking and collaboration available internally allows employees to learn together and solve problems critically, while the use of workforce analytics helps in generating insights and strategic decision making (Nazemian & Ulrich, 2012).

However, implementing an innovative digital HR system also often faces several challenges. What organizations intent to implement often differs from what is actually implemented.

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an ‘integrated, aligned, innovative, and business focused approach to redefining how HR work is done within an organization so that it helps the organization deliver on promises made to customers’, which fails when there is a severe gap between the intended and implemented HR system. Very little research has been done to investigate how to avoid such gaps. While Khilji and Wang (2006) have focused on broad human resource management systems and Holland & Light (1999) conducted a study on the implementation of IT systems,),little research has been done on the implementation of digital HR systems, one of the hot topics of today (Shiri, 2014). This paper tries to fill that literature gap by looking into the factors that are critical for a digital HR transformation to succeed, with as little gap between the intended system and the implemented system. Further insight into this can help modern organizations focus on the right factors when implementing a digital HR system. This leads us to the research question: What are the critical factors for a successful digital HR implementation?

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Background

This theoretical background starts by identifying critical success factors that are known and mentioned in the current body of literature. A distinction will be made regarding the hypotheses formed towards the end, between content, process, and context related factors. This is done to clearly distinguish what the hypothesis is about: The what that is being changed, how it is being changed, or where it is being changed. In order to successfully complete a transformation, content, process and context factors all need to be optimized (Self, Armenakis & Schraeder, 2007). In the literature different names are being used for traditional HR IT systems (meaning HR IT systems dating before 2008), such as eHR, eHRM, HR IT, HR IS, or traditional HR IT. During the course of theoretical backgrounds, these terms will be used, but the same thing will be meant: Older HR IT systems, focused on standard HR administrative processes, such as payroll, time and labor, appraisal management and (sometimes) talent management.

This thesis relies heavily on the work done by Emans et al. (2011). They investigated the factors that contributed to the implementability of HR programs, for example tools that enable HR professionals to carry out their job effectively. A qualitative study was done in eight organizations in order to identify factors that influence the implementability of HR programs. The study aligned the factors with a three-fold distinction, often found in change management literature, that promotes the implementation of organizational changes (Self, Armenakis & Schraeder, 2007): change content related, change process related and change context related factors. Content related factors have to do with what is being changed, process related factors have to do with how change is brought about and context related changes have to do with where this is done. The identification of factors and its alignment with change management distinctions, give tangible steps into what is needed to

implement a new digital HR system. The implementation factors that the study focused on have to promote the implementability of HRM programs in general, but give valuable insights in the implementability of digital HR programs as well. The study hypothesizes the existence of eight implementation levers, three content related ones, three process related ones and two context related ones. The content ones are: 'program adaptability', 'program embeddedness' and `program simplicity'. The process ones are: 'participative program development', 'attention to organizational politics' and 'gradualness of introduction'. The context ones, finally, are 'HRM's co-workership' and `HRM's accessibility'. Of the researched factors, only HRM’s accessibility turned to only have a positive effect. All other factors had both positive and negative effects. Other levers than hypothesized emerged from the data as well: Attractiveness of program content, timing of

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implementation. These levers are used as guidelines to form the hypotheses used in this study, assisted by factors that emerged from other literary sources. Most of these hypotheses form a basis on which is further built in this thesis, though more literary sources are needed to arrive at all hypotheses. For some of the factors (such as emotional involvement, timing, embeddedness and coercion) no literary evidence could be found, and were not hypothesized again.

To be able to determine whether a transformation can be classified as successful it is of importance to assess the gap between the intended HR and implemented HR (Khilji & Wang, 2006), where intended is concerned, practices intended by policy makers are meant. Implemented refers to practices that are operationalized and experienced in the organization by employees. Khilji and Wang (2006) found that HR satisfaction is higher in organizations where exists a small gap between the intended and implemented HR. One of the four identified factors that were identified as important in minimizing the gap was: cultural and structural changes need to be taken into account in order to develop an effective program. The importance of the cultural element in digital HR

transformation, also comes forward from the research of Stone et. al (2007), who argue that increase in diversity may have a large impact on the acceptance of human resource management processes and practices (e.g., recruitment, selection, training, performance appraisal, and compensation and benefits) by both individuals and organizations and the effectiveness of such processes and practices. The moderating effects of both individual culture and organizational culture on relations between HRM processes and practices, and the acceptance and effectiveness of such processes and practices need to be taken into account when initiating a digital HR transformation. This translates into the following hypothesis (3): “High involvement of employees during the development of the

transformation program will have a positive impact on the success of the transformation (Process related).”

In addition to involvement of the employees during the development of the transformation, the adoption of flexible systems is needed to support and accommodate each generation’s working preferences. In organizations who have a multi-generational workforce each generation’s

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the following hypothesis (1): ‘’High adjustability of the used IT program in the digital HR

transformation will have a positive impact on the success of the transformation (Content related)’’. (“Adjustability is defined, then, as the degree to which involved organization members, when

enacting an HRM transformation, have freedom as regards the way they do so, or, conversely stated, the degree to which they are bound by strict rules and procedures” (Emans et al., 2011).

In addressing the needs of different employees, Hussain et al. (2007) investigated human resource information systems (HRIS), on their functionality, affordability and their use in

organizations. Results show that HRIS often increased functionality of the HR department and its flexibility, while simultaneously reducing the operating costs. Gardner et al. (2003) researched how human resources professionals are impacted by heavy use of IT within their department. Findings of the study suggest that IT enables HR professionals to be able to obtain information more easily and have more information autonomy. Heavy use of IT tools also enabled HR professionals to link to other external professionals, in order to obtain data relevant for their respective industry. Heavy use of HR IT systems also increased the time HR professionals spent on IT support activities. This may indicate that ease of use and simplicity might be a factor of importance when implementing IT heavy systems. This is confirmed in the work of Chakraborty and Mansor (2013), who claim that

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Involving the employees, addressing each generation’s needs and the digital transformation itself, stress the importance of communication. Communication about the transformation, its need, its process and its expected results are necessary for a successful transformation. Not only to inform and involve staff, but also to avoid conflict of interests of different stakeholders. For a transformation to succeed it is deemed vital to share a clear statement considering the desired state after the transformation, its top-line advantages, and how it enables business and HR goals and improves customer experiences in the process. This is also found in the work of Stone and Lukaszewski (2009), who expand on the model of eHR acceptance of Stone, Stone, Romero, & Lukaszewski (2006), leading to the following hypothesis(3): High involvement of employees during the development of the transformation program will have a positive impact on the success of the transformation (Process related). Their expanded model provides a more detailed discussion of the communication processes underlying these systems including the effects of media and message characteristics. The researchers argue that organizations and HR professionals should use personalized messages, rich information and two-way communication to gain optimal acceptance and effectiveness of eHR systems.

Communication also helps in setting up expectation levels of all concerned personnel as to how best can they contribute in enabling a successful implementation. When addressing organizational politics and gaining employee involvement in the transformation, top management commitment is also an important factor to lower potential resistance. In the study of Khilji and Wang (2006), was found that management support and commitment to the implementation were critical for the success of the transition. Communicating and addressing politics (by for example showing top management support) within the organization translates into the following hypothesis (4): High attention to organizational politics during the transformation will have a positive impact on the success of the transformation (Process related). (Attention to organizational politics refers to the degree to which power relations within the organization have been taken into account when an HRM transformation was executed). When employees are involved, a diversity of input can be collected. Bowen, Cheung and Rohde (2007) stress the importance of exchange of ideas to share understanding of business objectives, so the organizational strategy can be adapted harmoniously. Their research however had a broad focus on IT system implementations, though this might apply to all IT projects. This leads to the hypothesis (7) that highly diverse input for the digital HR transformation will have a positive impact on the success of the transformation.

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describe in their study how electronic human resources systems are becoming increasingly common in organizations. Furthermore they propose to use blended HR systems. A blended HR system

combines a traditional HR system, with aspects of new digital HR systems, as to have the best of both worlds. Since not everyone is ready to have their performance data collected, but want to continue to have supervisor feedback and face-to-face meetings. A blended model might also improve

perceived control on digital HR systems for employees, by for example offering a traditional selection method, or e-selection. The use of a blended HR system, can create gradualness in a transformation, because traditional aspects are still being used. The work of Strohmeier (2007), suggests the same as the work of Stone et al. (2007). Strohmeier reviewed empirical work on electronic Human Resource Management (e-HRM). Since the development of the internet in the previous decade, application of eHR(M) systems has risen significantly, and with it the academic interest in eHR systems. In this study, research scattered across disciplines and journals is reviewed, enhancing the understanding of eHR systems. The study summarizes its finding in stating that eHR is an innovative, lasting and substantial development in human resource management. The researcher indicates that blended approaches have a positive effect on the success of eHR implementations, due to their gradualness. Following the theory it is expected that the higher the degree of gradualness, the higher the success of the transformation, thus leading to the following hypothesis (5): The more gradual the

transformation is, the more successful the transformation will be (Process related).

In addition to a degree of gradualness in the transformation, planning (Giezen, 2012), is important to a smooth transformation to digital HR as well. Giezen describes the importance of (simple) planning of large (transformation) projects where time and costs are concerned. This prevents the project from overruns on both time and money. This is important since one of the main focuses of a digital HR transformation is cost cutting. This leads to the hypothesis (8) that sound planning of the transformation will have a positive impact on the success of the transformation. To summarize the critical success factors found during the literary study, the following hypotheses were formed:

Hypothesis 1: High adjustability of the used IT program in the digital HR transformation will

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Hypothesis 2: High simplicity of the IT program involved in the digital HR transformation will

have a positive impact on the success of the transformation (Content related). (Simplicity is defined then as, “the degree to which a transformation is devoid of elements that are hard to grasp for the actors involved”.)

Hypothesis 3: High involvement of employees during the development of the transformation

program will have a positive impact on the success of the transformation (Process related).

Hypothesis 4: High attention to organizational politics during the transformation will have a

positive impact on the success of the transformation (Process related). (The degree to which power relations within the organization have been taken into account when an HRM transformation was executed)

Hypothesis 5: The more gradual the transformation is, the more successful the

transformation will be (Process related). (The degree to which the introduction process is split up in a number of small steps while those steps are taken one at a time, rather that simultaneously)

Hypothesis 6: The more attractive the IT program involved in the transformation, the more

successful the transformation will be (Content related).

Hypothesis 7: Highly diverse input for the digital HR transformation will have a positive

impact on the success of the transformation (Process related).

Hypothesis 8: Sound planning of the transformation will have a positive impact on the

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Methodology

Now that the theoretical background and hypotheses are introduced, the research approach will be described, as well as the organizations and the participants involved, and the data collection method and analysis method are elaborated on.

Research approach

In order to investigate what factors influence the success of a digital HR transformation, an

explorative study was performed by interviewing employees of a large consulting company who had experience with digital HR transformations across a number of organizations.

Participants and organizations

This research took place between April and June 2014, and took place in a large global ICT and consultancy company. The organization often functions as implementation partner during implementations of IT systems. The organization employs over 130.000 people in more than 40 countries. The research took place in the main office of The Netherlands.

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Data collection

This study focuses on exploring instead of the actual testing of factors that are critical for digital HR transformations to succeed. To collect data on the critical success factors involved with digital HR transformation, in-depth interviews were conducted. The interviews were held in a semi-structured manner, using respondent scorecards. This gave the respondents insight into the factors involved, while allowing for new ideas to be brought up. The questions, related to the different research variables, are displayed in the appendix. The interviews lasted one hour on average. At the start of the interviews, anonymity and confidentiality issues are discussed and guaranteed towards the respondents. All respondents were presented respondent score cards, which visually outlined the proposed factors. Data that was collected contained substantiated examples of why a certain factor was said to contribute or hinder the success of a digital HR transformation. The interviews were strictly set up, somewhat unstructured, but nonetheless aimed at the collection of well-specified data. During the interview the respondent was made familiar with the factors collected from the literature. The interviews were divided into three stages: All interviews started with broad and open questions relating to the general experience during digital HR transformations, then focusing on experiences with the factors found in literature, and then allowed respondents to give additions to the factors found. The goal of asking about all of the factors, was to invite the respondent to critically consider his or her experiences with digital HR transformations. During the interview, the focus was initially on experiences and opinions of the respondents with the factors. After experiences were established, more questions were asked about the actual facts that lay at the basis to form their opinions and experiences. These facts are the data content on which was focused and needed to be collected. The first half of the interview mostly consisted of asking the respondent about their general experience with digital HR transformations, and whether that experience was positive or negative. The next quarter was focused on the factors, and whether respondent had positive or negative experience with the factors. The last quarter allowed for open discussion to bring up new ideas and possible factors that might influence the success of a digital HR transformation.

Data analysis

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brought up during the last quarters of the interviews. The transcripts were separately coded by the researcher and a fellow researcher doing independent research. The coding were compared to each other and differences were discussed afterwards, leading to the final coding of the transcripts.

Validity and reliability

On the validity and reliability in qualitative research, Golafshani (2003) writes that it is about quality, trustworthiness, and consistency. This research meets these requirements, since interviews were recorded and transcribed. The transcriptions were reviewed and coded by the researcher and a fellow student.

Results

The results of this research are presented per factor and hypothesis, followed by factors that were not hypothesized, but emerged from the interviews (see tables 1 and 2). In addition to this, process and content related factors are compared.

Hypothesized factors

High adjustability of the used IT program in the digital HR transformation will have a positive impact on the success of the transformation. This hypothesis was neither confirmed nor rejected. Respondents indicated that this might have been the case with traditional eHR systems, but digital HR transformation are often initiated for cost reduction purposes, and therefore often focus highly on standardization. The organization, and more importantly its HR processes, need to adapt to the implemented program, and not otherwise. While some form of adjustability had indeed a positive impact on the implementation, it had mostly to do with the configuration part, and not the actual success of the transformation. Low adjustability of the IT program used might even lead to a more successful transformation, since the organization has no choice but to standardize its processes in line with the program. IT programs used in digital HR transformation are often used as Software-as-a-Service (SaaS), and therefore offer very little adjustability.

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High involvement of employees during the development of the transformation program will have a positive impact on the success of the transformation. This hypothesis was more or less rejected. While two respondents indicated that high involvement of HR employees did have a positive effect on the eventual success, but that line management or employees often were not involved. Four respondents disagreed with the hypothesis, since digital HR transformations are often about standardization and cost reduction, leaving little room for diverse input. Where there was room for input, it was solely reserved for important stakeholders and not regular employees.

High attention to organizational politics during the transformation will have a positive impact on the success of the transformation. This hypothesis was confirmed. Respondents claimed attention to organizational politics was very important because of the different departments involved. While more traditional eHR programs relied heavy on support from IT, in digital HR transformations the IT programs used are often highly standardized and more intuitive in both use and configuration. Often these programs are offered as SaaS, and also updated and maintained by the supplier, and not the IT department. Since digital HR transformations often have cost reductions as one of the main goals, not only a CHRO has a major interest in the transformation, but a CFO and a CEO as well. This leads to conflicts of interest; Do we want to standardize the business processes as much as we can to reduce costs, or do we try to adapt the program a little to match the organization? Paying enough attention to organizational politics engages the stakeholders in order to optimize the fit between the transformation and the organizational goals of the different stakeholders. One respondent indicated that attention to not only internal organizational politics was important, but politics between the customer and supplier needed to be managed as well. During the failed transformation the supplier did not allow any information to be publicized about its failing, since it might damage their

reputation.

The more gradual the transformation is, the more successful the transformation will be. This hypothesis was more or less rejected. Four respondents claimed that gradualness actually hindered the transformation. The sooner the IT program was implemented, the sooner the organization could continue with the change management process, and actually make sure employees and line

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success. A very gradual transformation, respondents indicated, sometimes causes stakeholders to lose interest since there is a lack of progress.

The more attractive the IT program involved in the transformation, the more successful the transformation will be. This hypothesis was confirmed. Four respondents claimed that visually attractive programs were more easily adopted by the client organization, its line management and employees. This in turn leads to an eventually more successful transformation. Three respondents did not agree with the factor; they claimed that the attractiveness of the IT program did not have an impact on the success of the transformation, but the intuitiveness of it.

Highly diverse input for the digital HR transformation, will have a positive impact on the success of the transformation. This hypothesis was neither confirmed nor rejected. Four respondents indicated that diverse impact from all major stakeholders had a positive effect on the success of the transformation. Stakeholders had to be presented by a small number of key influencers in order to keep the input of the group manageable. As stated before, digital HR transformations have major IT component, that needs configuration and not development. This causes the options to be limited. While there might be a lot of input and very diverse, it needs to fit within the boundaries of the IT system. Whereas traditional IT systems offered significant customization options where large

amounts of input could be taken into account, new systems rely heavily on standardization. In digital HR transformations, diverse input from key stakeholders on a strategic level was needed in order to move forward with the project. In contrast, three respondents claimed the standardization was so important in some cases, that input from major stakeholders hindered the process of

implementation, and its eventual success.

Sound planning of the transformation will have a positive impact on the success of the transformation. This hypothesis was confirmed. Respondents claimed that planning was very important, though less so than in a traditional eHR implementation. IT systems used are much more flexible, and functionality can be implemented in steps. Software-as-a-Service offers an iterative approach where different modules of a system could be implemented and taken into use very rapidly. Therefore, deviations from an original planning could be coped with by pushing the

implementation of a certain module backwards. Of course the transformation would take more time, but the impact on its success is strongly reduced.

Emerged factors from interviews

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side and implementation partner’s side. Having the right skill and expertise on the team was crucial for the success. At the client side, sometimes employees or managers are involved in the

transformations, but as an activity next to their daily work, which had a negative impact on the success of the transformation. Having dedicated client teams to the transformation was optimal for the transfer of ownership at the client, and thus for the success of the transformation.

Another point that respondents deemed important was the integration of the new HR IT system into the landscape of existing IT systems. IT systems often rely on each other for data, and interfaces are needed in order for systems to be able to communicate with one another.

All respondents added the fact that change management is becoming increasingly important in digital HR transformations. Since SaaS solutions prevail, IT is not the main concern anymore. This has shifted towards adoption new ways of working that come along with heavy standardization. Where traditional eHR implementations had a 10% or 20% of their budget cut out for the change management component, digital HR transformation sometimes sacrifice as much as 60% of the entire budget for change management.

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Table 1. Factors emerged from literature

No. Factor Code Description Example

Freq-uency Respo ndents 1 Adjustability of the IT program Positive Impact

High adjustability of the IT program used will have a positive impact on the success of the

transformation

“This is the case with traditional eHR because of customization, not with digital HR transformations’’ 1 FT Negative impact

High adjustability of the IT program used will have a negative impact

-

No impact

High adjustability of the IT program used will have no impact “Digital HR transformations focus on standardization, where little adjustments are made’’ 7 FT, RB, LK, JV, JB, MW, DS 2 Simplicity of the IT program Positive Impact

High simplicity of the IT program involved will have a positive impact

‘’Intuitive programs lead to high and easier adoption’’ 10 FT, RB, MZ, LK, JV, JB, MW, JK, RR, DS Negative impact

High simplicity of the IT program involved will have a negative impact

-

No impact

High simplicity of the IT program involved will have no impact - 3 Involvement of employees during development Positive Impact High involvement of employees during the development of the transformation will have a positive impact

‘’Involvement of employees is important, but not during development’’ 2 FT, JK Negative impact High involvement of employees during the development of the transformation will have a negative impact “Digital HR transformation are about standardization […] employees cannot contribute during development’’ 4 RB, MZ, LK MW No impact High involvement of employees during the development of the transformation will have no impact - 4 Attention to organizational politics Positive Impact High attention to organizational politics during the transformation will have a positive impact

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conflict of interest needs to be avoided’’ Negative impact High attention to organizational politics during the transformation will have a negative impact

‘’the focus on politics lead to very little communication to employees not involved’’ 1 RB No impact High attention to organizational politics during the transformation will have no impact

-

5 Gradualness Positive

Impact

The more gradual the transformation is, the more successful the

transformation will be

‘’Gradualness, or implementation in phases might have saved the

implementation’’

1 RB

Negative impact

The more gradual the transformation is, the less successful the transformation will be ‘’The IT system needs to be implemented asap, so change management can begin’’ 4 FT, MZ, LK No impact

Gradualness has no impact on the success of the transformation

-

6 Attractiveness Positive

Impact

The more attractive the IT program involved in the transformation, the more successful the transformation will be ‘’Visually attractive and intuitive programs are adopted quicker by employees’’ 4 LK, JV, RR, DS Negative impact

The more attractive the IT program involved in the transformation, the less successful the transformation will be - No impact Attractiveness of the IT program involved has no impact on the success of the transformation

‘’Attractiveness is not the right word, programs need to be intuitive in use’’

3 MZ, JB,

JK

7 Diverse input Positive

Impact

Highly diverse input for the digital HR transformation will have a positive impact

‘’Diverse input from a small number of major stakeholders is important’’ 4 RB, LK, JV, DS Negative impact

Highly diverse input for the digital HR transformation will have a negative impact

‘’Since

standardization is key, we did not want diverse input from across the organization’’ 3 FT, RB, JK No impact

Highly diverse input for the digital HR transformation will have no impact

-

8 Planning Positive

Impact

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can be taken into use very rapidly’’

RR, DS Negative

impact

Sound planning of the transformation will have a negative impact

-

No impact

Sound planning of the transformation will have no impact

-

Table 2. Factors emerged from interviews

No. Factor Code Description Example

Freq-uency Respo ndents 13 Expertise and skills of team Positive Impact

High expertise and skills of the teams involved will have a positive impact

‘’The client side team was involved in the transformation, but as a side activity from their daily work. This had a negative impact on the development of their skills’’ 3 FT, RB, JK 14 Integration in current IT landscapes Positive Impact

High integration into the current IT systems has a positive impact

‘’A key element is data transfer between IT systems. Bad integration means missing some of this data, leading to disuse of certain modules’’ 4 RB, MZ, JB, MW, 15 Change management Positive Impact

Proper use of change management has a positive impact on the success of the transformation ‘’IT is playing a decreasingly important role, whereas change management is much more

important due to the standardization of business processes’’ 8 FT, RB, MZ, LK, MW, JK, RR, DS 16 Communication Positive Impact

Good communication has a positive impact on the success of the

transformation

‘’Bad

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Discussion

In this section the research question will be answered. After that the implication of the findings are discussed. The strengths and limitations deal with the key points that could be improved in future research. Finally a conclusion is drawn concerning factors organizations need to focus on when conducting a digital HR implementation.

Critical success factors during digital HR transformations

This is the first exploratory study on the factors that determine the main success of digital HR transformations. It shows significant contrasts with more classical HR IT implementations in several areas. One of the main differences is that digital HR transformations often feature a new HR IT system that replaces an old system. Where a traditional IT system need a significant amount of time to be developed, designed, tested, and implemented, an IT system used in digital HR transformations is often much more flexible. A new system mainly needs configuration, interaction with its users (mostly through training), and can be implemented in several iterations to keep impact low.

This research shows several strong deviations from hypotheses. Whereas traditional e-HRM programs were largely focused on IT, digital HR transformation have a much larger change

management component. Of the eight hypotheses, four were confirmed, two were rejected, and two were neither confirmed nor rejected. In addition to this, four extra factors were identified and explained by the respondents. Of the hypotheses, three were focused on the content of the digital HR transformation, and five on the process of the transformation. Two of the content hypotheses were confirmed, and two of the process hypothesis were confirmed. The factors critical for the success of a digital HR transformation are simplicity, or rather intuitivism, of IT systems used, attention to organizational (both internal and external) politics, attractiveness of the IT system implemented, and the planning of the transformation.

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Gradualness in the form of slowly doing a digital HR transformation was not a factor critical for its success. Stone et al. (2006), however proposed the use of blended model (use of both new HR systems and regular HR processes) which was mentioned by respondents. Digital HR systems include several modules, which can be implemented in an iterative process, very much in line with the blended approach.

Strengths and limitations

One of the clearest limitations of this study is the lack of interviews with respondents that have experienced a digital HR transformation from a client perspective. While some of the

respondents had experience with both being on the implementation side and on the client side, most experiences were from implementation side. Another limitation is that the respondents all worked for the same implementation partner.

In turn, there are some strengths as well. All of the interviewees had broad experience with eHR programs as well as digital HR transformations, which provided insights in different kinds of situations. The respondent that had experienced a failed transformation could very well substantiate why certain factors had a negative effect on the success of transformations. Furthermore,

respondents had experience with transformation is very diverse organizations.

Future research

Further research should focus more on testing actual digital HR transformations and doing so in a qualitative manner. The purpose of this research is to gain familiarity with digital HR

transformations, and the factors that are most responsible for its successes. It provides new insights into digital HR transformations, in order to formulate a more precise problem or develop hypotheses for future research. The results of this research are not quite useful for decision-making by

themselves, but they can provide significant insight into a given situation. Although the results of this qualitative research can give some indication as to the why a certain factor has an impact on the success of a transformation, it says very little about the how or when. Therefore, future research should focus on quantitative data collection methods, spreading across multiple groups of

respondents, in various organizations, both implementation partners as well as client organizations who are undertaking, or have undertaken, a digital HR transformation.

Conclusion

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some of the factors however. Supported in both literary research, and this research are the factors of the simplicity, or rather intuitivism, of IT systems used, attention to organizational (both internal and external) politics, attractiveness of the IT system implemented, and the planning of the

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References

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Appendix

Interviewprotocol masterthese: Critical Succes Factors when

implementing digital HR programs.

Dit interview wordt gehouden in het kader van een masterthese onderzoek. Dit onderzoek gaat over de factoren die er toe leiden of een digitale HR implementatie een succes is of niet. Het doel van dit interview is om te achterhalen of bepaalde factoren daadwerkelijk een positieve of negatieve invloed hadden op het succes van een digitale HR implementatie.

Te interviewen: Experts (implementation staff)

Doel van het onderzoek: Inventarisatie maken van de factoren die experts ervaren als de kritieke succesfactoren om een digitale HR implementatie te laten slagen.

Intervieworganisatie Capgemini

Doel van vragen: Feiten vinden die te maken hebben met het succes van digitale HR implementaties

Duur van het interview: 60 minuten

Rapportage: In these rapport

Gegevensverwerking: anoniem

Geluidsopname: alleen voor gebruik interviewer

Introductie: per mail, een week van tevoren

Te behandelen:

Interview procedure

Selectie van de geïnterviewde Anonimiteit

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Vragen:

Nr. Vraag Notitie Reden

1 Welk programma was van toepassing bij deze implementatie? Samengevat antwoord Algemene vraag omtrent het betreffende IT systeem 2 Wat waren de positieve en negatieve

ervaringen bij de implementatie?

Samengevat antwoord

Respondent voorbereiden op vraag 8.

3 Wat waren de oorzaken van de positieve en negatieve ervaringen? Samengevat antwoord Respondent voorbereiden op vraag 8.

4 In welke mate was de betreffende factor aanwezig bij de implementatie?

Codering in getal Informatie vergaren 5 Op wat voor manier was de factor aanwezig? Samengevat

antwoord

6 Wat is het bewijs van de aanwezigheid van de factor?

Coderen (Feit, observatie, ervaring, indruk, eigen mening, mening van anderen)

7 Speelde de factor een positieve of negatieve rol?

Coderen (positief of negatief) samen met getal

8 Op wat voor manier speelde het een rol? Samengevat antwoord

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Variabelen:

Factor Positieve impact Negatieve impact Geen impact Mate van

impact Aanpasbaarheid van het

programma

Eenvoud van het

programma Betrokkenheid van medewerkers bij ontwikkeling Aandacht voor organisationele politiek Geleidelijkheid van implementatie Aantrekkelijkheid van het programma

Diversiteit aan input voor

Critical success factors influencing digital HR transformations