An increasing focus on the ‘people dimension’ as the most critical component for success among Australian businesses is driving upgrades of human capital management (HCM) systems, according to analyst firm IDC.
IDC’s 2017 Asia/Pacific Software study revealed that employee productivity and profitability is the most critical business priority for organisations across Australia in the next 18 months, and a focus on employee satisfaction and experience is the number one initiative Australian organisations will endeavour to undertake to improve customer experience.
“Employees are equally, if not more, important than customers; employee engagement and productivity contributes to the company’s success and helps to significantly increase the overall customer experience,” said Anastasia Antonov, market analyst, IDC.
This increasing focus is being reflected in growth in the HCM market in Australia: according to IDC, in 2016, the market grew 5.2 per cent year-over-year reaching US$129 million, and is set to maintain this trajectory.
IDC’s study found that 83 per cent of Australian businesses plan to upgrade and modernise their current ERP systems, as their existing systems are unable to support current and future business needs and are too cumbersome to maintain.
With a multi-generational workforce requiring different drivers and incentives for better employee performance, maintaining archaic HR systems is no longer an option for organisations which consider themselves to be top market performers.
“Every transformation and adoption of a new HCM system is unique. It is critical for all members of the organisation – from C-level executives to IT and HR teams to be involved in transformation and to provide the needed change management support, resources and toolsets to empower employees at the individual level and optimise talent,” said Antonova.
With Australian businesses placing high importance on big data and analytics capability in the coming years, 78 per cent of businesses in Australia have either already deployed or are planning to deploy workforce analytics solutions to increase visibility and improve employee engagement.
“The talent management function in most organisations have pondered over the idea of leveraging the quantum of data under its belt for years. Unfortunately, only a few have succeeded in utilising the tools and technologies available to build a truly refined and harmonious data-driven HCM system,” said Sabharinath Bala, senior research manager, IDC.
“Australian firms have now started to explore the usage of data-driven intelligence and workforce analytics with an organisation-wide context making the involvement of the HR team an integral part of this journey, to identify the risks and opportunities associated with these initiatives. HR teams are now inching toward being a regular and crucial fixture on the executive table.”
Find out more about IDC’s perspectives on the HCM market: Human Capital Management Applications: WorkSource as a Critical Digital Transformation Dimension for Business Success in Australia