Gartner for HR

Creating an Adaptive
HR Technology
Strategy
Creating an Adaptive HR Technology Strategy
Published 10 May 2021 - ID G00750498 - 19 min read
HR Technology Research Team
Initiatives: HR Technology Strategy and Management

HR technology must keep pace with rapidly evolving business and

employee needs. HR leaders can use this report to undertake three
shifts that will make their HR technology strategy and
management more adaptive.

Overview
With the growth in workplace digitalization, HR technology has become the key enabler for
employee experience and productivity. Investments in HR technology are typically long-
term and expensive. To get returns from this large-scale investment, HR leaders must
ensure that the technology implemented can adapt to meet evolving business and
employee needs. To create an adaptive HR technology strategy, HR leaders can implement
a dynamic trigger-based review approach, align solutions with employees’ personal and
professional objectives, and create a governance mechanism to review HR technology
investments as a portfolio, not siloed projects.

Key Findings
■ HR leaders continue to operate in an uncertain and volatile business environment.

■ Investments in HR technology remain strong. Ninety percent of HR leaders say they

plan to either maintain or increase their investments in HR technology in 2021. This
increases pressure on HR technology leaders to deliver ROI and adapt to evolving
business needs.

■ While most HR leaders aim to improve employee experience with technology, half of
CHROs feel HR technology hinders, rather than improves employee experience at
their organizations.

Recommendations
To create an adaptive HR technology strategy, HR leaders should:

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■ Partner with HR COE, IT and business leaders to identify and monitor a list of
internal and external triggers that can lead to disruption.

■ Prepare to respond quickly to shifting needs by outlining how and to what extent the
HR technology strategy and roadmap can flex to meet these needs.

■ Design technology solutions that improve employee experience, productivity and

wellness by creating and updating employee personas that detail employees’
evolving personal and professional needs, motivations, priorities and challenges.

■ Create a governance mechanism to review the health of the total HR technology

investment at your organization, ascertain the relative importance of different
technology solutions, and prioritize next steps based on trade-offs.

HR technology’s role has grown from providing the infrastructure to complete basic HR
tasks efficiently to becoming a key enabler of business continuity, productivity and the
employee experience in a virtual environment. It is unsurprising, then, that in 2021, even
as a third of HR leaders plan to decrease their overall budget (twice as many as in
2020), 90% plan to either maintain or increase their investments in HR technology.1 The
growth in business disruptions along with the expansion of the HR technology market
makes it urgent that HR leaders review how adaptive their technology strategies are in
the face of change. HR technology strategy needs to keep pace with changing business
priorities, employee needs and the technology landscape.

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Creating and maintaining an HR technology strategy that gives the greatest return on investment
(ROI) and aligns with the demands of the business requires three key shifts (see Table 1):

Table 1: Three Key Shifts to Creating an Adaptive HR Technology Strategy

Standard Approach Adaptive Approach

Create static HR technology plans for a Create dynamic HR technology plans for an
predictable future. unpredictable future.

Focus on improving only the end-user experience. Focus on improving the total employee experience.

Manage technology solutions as different projects. Manage technology solutions as a single portfolio.

Source: Gartner
In the following three sections we show how HR technology leaders can improve their strategy
review process, their approach to improving the employee experience, and technology governance
to ensure their HR technology strategy can adapt to changes quickly.

Create Dynamic, Not Static HR Technology Plans

As technology investments usually mean high-cost and high-effort selection and
deployment, it is not easy to change or replace technology solutions in response to a
change in needs. HR leaders must therefore carefully plan how they will flex technology
support and strategy in the face of changing business or employee needs, while
minimizing overall disruption to their roadmap. To do this, HR leaders should actively
determine when they should reevaluate their strategy and partner with team members
across the organization (e.g., IT, HR, the business) to scan for changes in external trends
or business/employee needs. Dynamic HR technology planning differs from static HR
technology planning in three key ways:

■ Planning assumptions — Instead of planning HR technology investments and

initiatives according to a single, most-likely scenario, plan technology investments
expecting change to occur.

■ Review frequency — Instead of reviewing the HR technology strategy or action plans

annually, review them iteratively or based on the identification of specific triggers.

■ Partnerships — Instead of creating the HR technology strategy in silo, create and

review it in close collaboration with business, IT and HR partners.

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Take Action: Adopt a Trigger-Based Strategy Review Approach
Given how fast the business environment and organization needs are changing, instead
of reacting to an event, HR leaders should proactively plan for its technology implications
and outline the direction they will take. Eighty-four percent of organizations report actively
making major changes to their talent strategy to promote new ways of working. 2 To plan
for disruptive events and changes, HR leaders should identify triggers in the internal and
external environment (see Figure 1). These could include a change in business operating
model, mergers and acquisitions, a change in employee experience and expectations, or a
major shift in the technology provider market. These triggers indicate when HR leaders
need to reevaluate their HR technology strategy to support these changes.

Figure 1: Examples of Potential Triggers to Revisit HR Technology Strategy

By proactively outlining the implications for HR technology of these scenarios, and

detailing where technology plans can adapt and where they cannot (see Table 2), HR
leaders can (1) be better prepared to act when needed and (2) establish a good
understanding with business partners on the feasibility and extent of changes that can be
supported.

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Table 2: HR Technology Scenario Plan Example Triggers
(Enlarged table in Appendix)

HR leaders should adopt a mechanism to check in with partners in IT, HR, CoE and
business leadership to ensure they stay aware of emerging shifts and developments and
can identify and act on triggers soon. Strategies created in siloes cannot capture these
shifts. Involving these partners in the creation and review stages also makes it easier to
explain limitations, discuss trade-offs and obtain signoff.

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Improve Total Employee Experience, Not Just User Experience
While most HR leaders agree they aim to improve employee experience with technology,
half of CHROs feel HR technology hinders, rather than improves employee experience at
their organizations. 3 This is because while defining employee experience in the context of
technology, HR leaders often default to a technology-user-centric approach. They focus on
the usability of the technology and how easy it is to find, navigate and troubleshoot the
solution. A pitfall to this approach is that it can ignore how HR technology supports
employees in their objectives and how work gets done. Usability does not trump helping
employees meet their personal and professional goals. Seventy-three percent of
employees say the attribute most important for them in technology adoption is whether
the technology solution helps them get their work done more quickly and accurately. 4

As HR technology’s impact on employee experience evolves, HR technology teams need to

widen their scope from improving the user experience to improving the human experience
with technology. This means enhancing the impact of employee-facing technology on
their personal, professional and social lives. This becomes even more important in the
hybrid work environment where boundaries between work and personal life are constantly
blurred.

Let’s look at an example to understand this better.

While trying to improve the employee experience, organization A applies user interface
and user experience principles to improve the interface of its career management software
(for example, by highlighting calls to action and reducing the number of clicks required).
Employees provided good feedback on the user experience and intuitive design, but their
adoption of the software remained low. This is because organization A failed to meet the
actual need of its workforce for a fair and transparent way to look for internal career
movement opportunities. Instead, the company focused purely on enhancing the usability
of the features it has in place.

On the other hand, organization B started its journey by understanding exactly how its
employees want career management software to help them advance their careers. The
company uncovered employee challenges in finding the right internal mobility and
redeployment opportunities (e.g., lack of visibility, long and confusing process, managers
discouraging internal movements). Organization B focused on how they can fix these
challenges with technology and other measures. Upon deployment, employees adopted
the technology, as it demonstrated it could have real value for them.

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Improving total employee experience differs from just improving user experience in three
key ways:

■ Starting point — Instead of starting by fixing the usability of the technology

interface, start by understanding the utility of the technology for employees.

■ Improvement focus — Instead of focusing only on how to make employees more

efficient, focus on how you can make employees feel more empowered and engaged
by using the technology.

■ Success criteria — Instead of tracking only usage and satisfaction metrics, measure
HR technology’s impact on equity, employee wellness and productivity.

Take Action: Focus on Understanding and Improving Moments That Matter

To improve the total employee experience with technology’s help, HR leaders should build
employee personas and journey maps to understand real employee needs. Employee
personas are an abstraction of the characteristic behaviors, motivations, emotions,
interests and values of a group of employees. They are created from data collected by
interviews and other tools. Personas can be used to understand not just what employees
expect as users of technology, but also what their overall needs and motivations are in
their work and personal lives.

Employee journey maps visualize the start-to-end experience of an employee with a

particular organization process and outline the emotional experience at various
touchpoints along the journey. This gives an insight into employees’ “moments that
matter.” These are experience points with a disproportionately high impact (positive or
negative) on overall employee engagement and productivity. HR leaders can also analyze
the gap between the expected and actual experience for different employee personas
overall and at various touchpoints. HR leaders should use employee journey maps to
understand both how easy to use their technology solutions are, and to assess whether
they align with employees’ actual needs. This can lead to a decision to further invest,
disinvest or redesign a solution.

Case in Point: Collaborative “Game Changer” Identification (Nokia)

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 Nokia realized a change to a hybrid workforce model due to the COVID-19 pandemic
would alter the personas of its HR technology solution end users and wanted the HR
technology roadmap to keep pace with shifting employee needs. Nokia created a
cross-functional and cross-geographical team, including representation from HR, real
estate and health and safety, to create and refine “digital end-user personas,” and their
associated journey maps for critical processes requiring HR technology support (such
as new-hire onboarding). Nokia created personas for different employee groups (for
example, the new hire, line manager and HR professional), using inputs from surveys,
a focus group and one-on-one discussions with employees. The output from the new
digital persona journey maps was a select number of “game changers” — challenges
most critical to the business, the HR process and the employees.

In creating a plan to address these challenges, Nokia realized only adopting a

technology-user-experience view to arrive at a solution for an employee game changer
left it with a narrow understanding of how to address these critical moments. This in
turn could limit the HR technology team’s contribution to the organization’s goal of
offering a smooth overall employee experience. Consequently, Nokia used three lenses
to give a total employee experience view (see Figure 2) and help decide on the most
effective intervention:

■ Human touch — Changes involving employee development, introducing new

human touchpoints, peer collaboration and behavioral guidance

■ Process design — Changes centered around process design, preplanned

initiatives and troubleshooting support

■ Technology experience — Changes concerning tools and system updates, task

automation and the technology user experience

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Figure 2: Nokia’s Balanced Buddy Program Improvement Approach

Manage the Technology Portfolio, Not Technology Projects

Even as most organizations strive toward consolidating their HR technology solutions into
a few suites, in reality, they are unable to fulfill all of the organization’s needs. This means
HR technology leaders invest in point solutions, either to fill gaps left by suite
implementation, meet an emerging business need or leverage innovation in the market
(particularly evident in the talent acquisition space). Gartner’s strategic assumptions from
our Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises say that, by
2025, 60% of global midmarket and large enterprises will have invested in a cloud-
deployed HCM suite for administrative HR and talent management. However, they will still
need to source 20% to 30% of their HCM requirements via other solutions due to gaps in
functionality.

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This creates a complex ecosystem to manage — with various HR technology solutions in
different phases of selection, implementation or deployment. Most commonly,
organizations view these solutions as isolated projects. Actions on different components
of the technology stack are taken independently of other technology investments. HR
leaders are overwhelmed by urgent, immediate and short-term demands such as
implementing new technology, maintenance and managing upgrades. This leaves a
limited focus on managing the existing solutions and planning their life cycle — with
change management time spend dwarfed by more technical design and configuration.

This short-term, project-focused approach results in long-term financial loss and low ROI.
Poorly allocated costs and a low strategic alignment of investments results in a disjointed
and often outdated set of technologies, impeding efficiency and the user experience. For
example, HR technology teams can fail to decommission an obsolete technology and
continue to bear its cost because they gave it limited attention after its deployment.

Without a comprehensive and integrated view, HR leaders cannot be sure whether their
technology investments still address current business needs in a rapidly transforming
business environment, and they have limited visibility into which components they should
flex to meet those needs.

HR leaders focused on improving the ROI of their technology investments should set up a
governance framework that manages the ecosystem of technology solutions as a
portfolio of interrelated technology solutions. They should make decisions keeping in
mind the position of different technologies in their life cycle stages. The action plan
should include only a prioritized set of improvement initiatives based on their business
criticality and feasibility.

By implementing a portfolio management approach, HR leaders can expect:

■ Better visibility and transparency on the overall health of technology investments

■ Better management of the technology risks inherent in a complex technology

ecosystem

■ Flexibility to adapt rapidly to changing business needs

■ Better consolidation of applications and removal of redundancies, leading to cost

benefits

■ Balanced allocation of resources across different capabilities and priorities

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■ Clear ownership of outcomes and better partnership with IT and the business

Managing technology solutions as a portfolio is different from managing them as

projects in three key ways:

■ Planning timeline — Instead of planning a budget only for a solution’s

implementation period (of one or two years), plan for the entire life cycle of the
solution (five years and beyond), including details such as planned upgrades and
expected replacement dates.

■ Technology performance metrics — Instead of only tracking delivery metrics such as

time, cost and user satisfaction, track business metrics such as ROI, adoption and
reduction in process complexity.

■ Partnership with business and IT — Instead of forging a tactical relationship

focused only on the execution of projects, form a strategic partnership focused on
meeting business objectives, driving ROI and optimizing the portfolio.

Take Action: Conduct an HR Technology Portfolio Audit

To effectively manage technology investments as a portfolio, HR leaders should set up a
governance committee consisting of HR, IT and business partners that meets regularly to
review the health of the portfolio and the relevance of planned improvement initiatives.
Figure 3 shows a framework HR leaders can use to view and assess their entire
technology portfolio at a glance, and ascertain and prioritize improvement initiatives.

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Figure 3: Framework to Decide Action on Solutions in the HR Technology Portfolio

This framework can be used to review the overall health of the portfolio and to lead
further analysis and discussion with IT and business leaders. HR leaders should list their
solutions — both suites and point solutions — and partner with IT to rate them on
“business fitness” and “technical fitness.”

Business Fitness

Business fitness is defined as the ability of a solution to support business capabilities or

processes and can be assessed according to the following criteria:

■ Business support — How well does it improve user productivity (of employee or HR
team member)?

■ Longevity — How well does it meet both current and future business needs?

■ Upkeep — How low is the error rate or need for troubleshooting?

■ Information quality — How good is the utility and timeliness of data?

■ Cost — How controllable or predictable is the current and future cost of the solution?

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Technical Fitness

Technical fitness is defined by how maintainable and stable is the technical infrastructure
that supports a solution. HR leaders should partner with IT to assess solutions’ technical
fitness on parameters such as:

■ Reliance on skills and subject matter experts — How dependent is the solution on a
small group of professionals for maintenance or enhancement? High reliance on a
small group of experts for maintaining technology solutions may result in delays to
problem resolution enhancements.

■ Ability to upgrade — How easy is it to enhance, scale or integrate the solutions?

■ Vendor viability and support — How commercially sustainable is the vendor? How
committed is the vendor to supporting and enhancing the solutions?

■ Security — How well does the technology infrastructure protect information from
unauthorized use or extraction?

Solution Categorization

Based on their business and technical fitness, each solution in the portfolio should fall
into one of the following four categories. Discuss the results of the assessment to decide
next steps with IT and business partners. To decide how to assign resources and decide
trade-offs, allocate percentages of the HR technology management budget across the
four categories based on their strategic impact and their time/cost investment. This
categorization helps in prioritizing the right set of next actions as well as making it easier
to discuss and communicate the logic of investment decisions.

1. Maintain — Solutions that meet the business needs well and are technically sound.
Newly acquired solutions or old solutions that are well-maintained or upgraded
usually sit in this category. These applications either did not have to face a high
pace of change or were able to flex and evolve according to changing business
needs. HR leaders should manage these applications as strategic business
investments and identify ways to improve their agility and efficiency as required.

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 2. Redesign — Solutions that are technically sound but do not meet the business need
well. These are applications that pose no immediate technical risk but have not
evolved to keep pace with changing business needs. Often, and commonly in large
core systems like ERPs, only a part of the solution is not meeting business needs. In
such situations, HR leaders can consider reengineering part of the application.
However, if the amount of change required is high (significant change in
functionality and user experience), a replacement approach might be more feasible.

3. Eliminate/Replace — Solutions that neither match business nor technical fitness

standards. For some solutions where the business need is obsolete (for example,
temperature tracking software after the pandemic), decommissioning should be
prioritized to reduce cost. For applications still being used, all dependencies need to
be resolved before deciding to decommission or replace the application. HR leaders
should review the portfolio to find opportunities for consolidation and rationalization
of their portfolio where possible. Ask yourself and your IT partners if there are other
existing applications with features that can be used to achieve the same objectives?
For example, can you introduce the functionality supported by this application to
another suite in the portfolio, thereby reducing the overall number of applications?

4. Upgrade — Solutions that meet business needs but pose technical inefficiencies or
risks. Low-to-medium technical fitness can be caused by the use of old or
unsupported technology, lack of skilled workers, high complexity or high technical
debt. Consult IT to understand its plan on the next steps (e.g., rehost, replatform,
rebuild).

Conclusion
HR technology must keep pace with the speed of change in business and employee
needs. As organizations’ investment in HR technology grows, HR leaders are responsible
for ensuring they manage the technology strategy and deployment to meet current and
future business needs. To do this, HR leaders must take an adaptive approach to
technology strategy and management. They should partner with business and IT to define
how HR technology can flex when triggers are activated, understand shifts in employees’
personal and professional needs to drive a total employee experience, and evaluate their
entire technology portfolio when creating their action plan.

Recommended by the Authors

Top Strategic Technology Trends for HR Leaders

Case Study: Dynamic Digital Roadmap Design (Nokia)

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Benchmarking the Maturity of HR Technology Management

About This Research

This research has been created based on various Gartner surveys and our interactions
with HR leaders across industries on how technology strategies can adapt in response to
internal and external shifts.

Endnotes
1
2020 Gartner HR Budget and Staffing Benchmarking Survey

2
2020 Gartner Workforce Responsiveness Survey for HR Leaders

3
CHRO Agenda Poll Survey 2021

4
2020 Gartner Employee Adoption Index Survey

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Gartner, Inc. | G00750498 Page 15 of 15

Table 2: HR Technology Scenario Plan Example Triggers

Trigger Threshold (If Applicable) Implications for HR What Cannot Flex What Can Flex
Technology

1. Rapid Expansion: Increase For example, a greater than Current workforce We can only consider We can increase the number
in total number of employees 15% increase in employee management tool will need to upgrading, but not replacing of seatholders for technology
bench strength in one year. be scaled to support new the onboarding software as workforce management
workforce. the supplier contract is valid software.
As the number of new hires until 202x.
increases, onboarding
technology will need to be
reviewed for upgrades.

2. Enterprise Acquisition: N/A HR technology will need to Performance management Cloud-enabled workforce
Change in org structure align with the new workflows software is not yet integrated management software
and team structures. to reflect changes in team supports dynamic org
structure from the workforce structure shifts.
management tool. Discuss
with the vendor when they
plan to introduce this
functionality.

3. Reduction in Budget: For example, a greater than Solutions and projects at the Ongoing major projects such From the low- and medium-
Sudden disruption leading to 25% reduction of HR time of disruption will need to as cloud migration cannot be priority technology solutions,
cost constraints technology budget in one be categorized as high-, scaled back or discontinued. evaluate which can either be
financial planning cycle. medium- and low-priority discontinued or scaled back

Gartner, Inc. | G00750498 Page 2A of 3A

 based on their business based on their vendor
impact. contracts.
Based on the size of the Evaluate which
budget cut, technology experimentation and
solutions may be cut back, for innovation projects to put on
example through — portfolio hold.
rationalization or If the cut is greater than 60%,
nonessential technology resizing the team can be
elimination. considered.
Multiyear contracts and
investment commitments will
need to be minimized.

Source: Gartner

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