Digital transformation project: IBM HR department (group 11)
This report focuses on the IT strategy of the HR department of IBM. IBM has about 350,000 employees worldwide and 3,658 employees are situated in the Netherlands. In a company this size, the HR department is of great importance for optimal business practices. HR is an independent entity within IBM, which reports to the worldwide organization based in the US. The Dutch HR department receives guidelines from the global HR department in the US, which should be implemented locally. Therefore, the HR department in the Netherlands performs mostly an executive role. The HR department of IBM strives for data-driven decision making. At IBM, the implementation of IT in the HR department is in an advanced stage. Various tools are used and large amounts of data regarding employees are gathered.
However, parts of the information in these data are still hidden, because of lack in data analysis. This lack is caused by two factors. First, the existing tools are appropriate for data storage and sharing, but are not usable for analysis and subsequent actions. Secondly, human capital is missing in the form of HR employees who have the needed capabilities to perform and act on the data analysis.
In order to address IBM´s current business problem within the HR department, an HR analytics solution is recommended to be implemented within the IBM HR department. It is suggested that IBM’s HR department chooses the HR analytics service provided by IBM itself, since IBM provides an easy-to-operate end-to-end solution and the product is designed on the basis of values and beliefs of IBM.
This IBM HR Analytics solution enables the HR department to gather employee data in a structured manner and most importantly, it allows the department to analyze this data. With the obtained information, HR can compose tangible action points and goals. The information can provide insights in what is currently happening in the workplace and what can happen in the future. Research has shown that the implementation of HR analytics solutions can result in increased employee satisfaction and performance and reduced employee absenteeism and turnover rates. Furthermore, this solution can help the IBM HR department to more effectively recruit and attract new employees that best suit the organization. IBM HR Analytics can aid in identifying employee (personal) characteristics needed and can ultimately result in happier employees who better fit their job.
With the implementation of IBM’s HR Analytics, numerous risks are involved and will determine the success of the implementation. These risks concern employee privacy and compliancy issues, ethical questions and the usability of the performed analyses. Finally, the use of analytics can ultimately lead to the reduced need of HR staff. This can result in reduced motivation and engagement of HR employees, since they might fear losing their jobs to the new system.
IBM HR Analytics is the most feasible option for the IBM HR department to implement. First, it is financially feasible since it represents an ROI of 2.18. Second, it is technically feasible, as the old and new systems are easy to integrate, internal IT consultants are available and no fundamental architectural changes are required. Finally, the solution is operationally feasible if two conditions apply. First of all, employees who can work with the software and translate results into actions are required. Secondly, the HR department should even more focus on data-driven decision making.
When implemented, the IBM HR Analytics solution is expected to be in full operational use after two years, assuming that systems will be synchronized and employees will be able to perform data analyses and use the obtained information accordingly.