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HR Transformation: Which lens are you using?

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New findings reveal organizations need to shape their HR transformation journey or be shaped by the forces of change in the digital age.

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HR Transformation: Which lens are you using?

  1. 1. Which lens are you using? 5 September 2017 HRTransformation
  2. 2. 2© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved 2© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved Thegreatdivide Global organizations appear equally divided into two camps with different lenses on where the HR function is headed. The other half are ‘unenlightened’ and faltering amid uncertainty as the digital era redefines the world around them and dramatically rewrites the rules for success. Half are ‘enlightened’ and boldly engaged in the need for strategically managed HR transformation. The inevitable choices businesses and their HR functions face amid today’s unprecedented forces of change are clear: Drive change or be changed. Shape or be shaped.
  3. 3. 3© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved DriversofsuccesswithlargeHRinitiatives Three out of four organizations that undertook HR transformation have successfully executed complex initiatives, for example the implementation of cloud HR technology. There are common characteristics among this group: have changed their operating model alongside their implementation.72% have built a business case that identified clear measures for success.73% are viewed as adding strategic value to the business.89% Driversof success Source: HR Transformation: Which lens are you using? KPMG International, 2017.
  4. 4. 4© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved CharacteristicsofHRfunctionsviewed asstrategic 27% of organizations report that their HR function is viewed as a key business asset that adds strategic value. Of those organizations: reported having moderate to extensive change management capabilities.91% are driving the conversation on the impact of Intelligent Automation inside their organization.66% of strategic HR functions view Intelligent Automation as having a significant impact on the HR function.92% Characteristics ofstrategicHR Source: HR Transformation: Which lens are you using? KPMG International, 2017.
  5. 5. 5© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved CharacteristicsoffailedHRinitiatives While only 11% of initiatives did not meet expectations, there were some common characteristics: reported not changing roles or structure consistent with their transformation.85% did not identify measures for success and managed their program against those metrics.90% reported having moderate to no change management capabilities.75% Contributors tofailure Source: HR Transformation: Which lens are you using? KPMG International, 2017.
  6. 6. 6© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved 6© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved Disruptionspellssuccess Disruption and heightened uncertainty are being embraced by forward- looking business leaders as a unique opportunity to help transform business models and drive new levels of growth and success. say they view technological disruption as an opportunity rather than a threat. have taken steps to challenge themselves in the past year. 65% 68% Source: Disrupt and grow, CEO Outlook Survey, KPMG International, 2017.
  7. 7. 7© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved 38% A third of organizations plan to implement a new HRMS in 2017, up 3% from last year. HR transaction processing (63%) and delivering value-added services (62%) are the leading anticipated benefits from new HRMS. 7© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved Whilesomeareinvesting,manyrisk fallingfurtherbehind Source: HR Transformation: Which lens are you using? KPMG International, 2017. 38% of organizations expect to increase HR technology spending in 2017, up 8% from last year, but 44% will hold spending constant — raising the risk of falling further behind the leaders on transformation. 63%
  8. 8. 8© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved Successful transformation demands visionary leadership that pursues those uncomfortable initiatives required for future success. Leadersaremovingbeyondthe comfortzone of organizations have improved people management. have reengineered key HR processes. have refocused the role of HR business partners. In the past 18 months: 63% 60% 44% Source: HR Transformation: Which lens are you using? KPMG International, 2017.
  9. 9. 9© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved A major projected benefit of new HR systems is better access to data and analytics capabilities. But the leading impediments identified by organizations are: — weak data — a lack of skills to derive insights and enhance decision making. Data acumen is a key issue today. D&A is just the mechanism — you need new expertise to add value. Data-basedinsightsdemand criticalnewskills
  10. 10. 10© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved Within the next year, 36% of organizations expect to employ Intelligent Automation as they redefine their operating model. TakingaboldapproachthroughIntelligent Automation Talent acquisition/ on-boarding Talent management 61% 57% Positioning staff for more strategic work Improved performance56% 54% Primary focus areas are: The anticipated benefits include: Source: HR Transformation: Which lens are you using? KPMG International, 2017.
  11. 11. 11© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved The key obstacles identified on the road to Intelligent Automation include: Significantautomationchallengesremain Costs and funding A lack of budgets and skills for process standardization 47% 37% Source: HR Transformation: Which lens are you using? KPMG International, 2017.
  12. 12. 12© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved The major challenges cited in delivering strategic value from the HR function include: Thequestforstrategicvalue Shortcomings in supporting new HR technologies Inadequate change management capabilities 43% 36% Source: HR Transformation: Which lens are you using? KPMG International, 2017.
  13. 13. 13© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved HRleadershavehitamajorcrossroads meeting expectations — The traditional, outdated HR function needs to be reimagined for the future. — Failing to pursue a strategic, proactive approach to change is increasingly risky as technology megatrends redefine markets, business models, workforces and customer relationships. — But many organizations appear to be in a state of flux — embarking on a transformation journey with no clear strategy, roadmap or destination. 44% 32% 59% HR initiatives are: exceeding expectations unable to measure progress Source: HR Transformation: Which lens are you using? KPMG International, 2017.
  14. 14. 14© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved Successful transformation in the digital age makes it crucial for businesses to have a clear destination and an intelligently designed roadmap to get there. This includes: — a new mindset as the speed of change accelerates — an entirely new vision for the traditional HR function — a deeper understanding of the skills and talent needed for a new era. Businesses must embrace change or be shaped by the forces of change in today’s dynamic digital era. Theroadtosuccessbeginswithaprecise destination
  15. 15. FindingsbasedontheHRTransformationSurvey — 887 executives from 48 countries participated in the study, from February to April of 2017. — 27 industries were represented, across Asia Pacific, Europe, North America, Middle East/Africa and Latin America. 15© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved To find out more: KPMG.com/HRT #HRsurvey Less than 5,000 employees 64% 5,001–20,000 employees 20% More than 20,000 employees 16% (n=887) Survey respondents by organization size
  16. 16. kpmg.com/socialmedia © 2017 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The KPMG name and logo are registered trademarks or trademarks of KPMG International. kpmg.com/HRT

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