HCM: Beyond Learning Management
By Adam Miller

Champions of HCM technology claim that it's enabling HR and training departments to realign and leverage information across functional areas to maximize organizational effectiveness.

How we got here

How did the industry get to this point? The path is instructive.

The genesis of the LMS industry is simple, but follows two paths: the growth of e-learning, in general, and the requirement to manage this phenomenon. In both cases, the impetus was self-evident: companies were searching for ways to increase employee development options, embrace a new wave of technological innovation, manage ongoing learning investments, and reduce costs.

In the case of e-learning, companies initially turned to computer-based training through CD-ROMs, which saved costs but was cumbersome. That is why the Internet was such a phenomenon for the learning industry. As a result of the Internet, employees could access ongoing training over a network, at any time from anywhere, served up through Web browsers. Additionally, content could be updated with a few mouse clicks, with new additions replacing old content.

In parallel, the content employees could access, predictably improved. From static pages of text on a CD-ROM to the Internet age, educational materials became far more dynamic and interactive, allowing an employee to have a far richer educational experience. From there, new types of courses with interactivity, such as simulations of oft-used personal productivity computer programs helped the industry grow to where it is today: a fully simulated learning environment where an employee can interact as needed with the course materials.

The demand for technology-driven training and savings spurred the emergence of enterprise-wide learning management systems. Learning management tools evolved as an effective means to reduce administration costs and use automation to track training delivered to geographically dispersed employees. These tools were also used as an effective reporting mechanism, allowing a company to have some insight into the skill-level of its workforce.

The learning management system, or LMS, followed a similar technological path to most application software. Introduced as programs that required both client and server-based software, this paradigm soon evolved as the Internet took hold, resulting in Web-based applications that were far easier to implement and access. Now an organization could provide access to a network filled with useful interactive content for every employee in the company.

The next level

What dawned on organizations provides the underpinnings for the HCM era: Why not tie these employee development tools to the overall development of the organization so that a corporation could start to improve the performance of its workforce by targeting the development of each of its employees?

With the opportunity and accompanying technological ingenuity, a new question arose: Who would use these tools?

Given the decentralized nature of HR functional areas, the objective of integrating individual employee development with performance, and aggregating this information to assess high potential employees and organizational strengths and weaknesses, faces significant obstacles. Most companies have these efforts operating in parallel, but not integrated and aligned against broader company objectives.  For example, many Fortune 1000 companies have performance management apparatus. These same companies also provide ongoing training, and upper management succession planning. However, each project is typically managed independently, with separate teams and tools. 

But with integrated technologies that can tie these groups together, and share the information seamlessly, HR departments become free to operate and organize cross-functionally. Not only does this create a more valuable human resources function, but it also promises to embed a more holistic approach toward organizational development into the company.

HCM changes organizational development

Supporters of HCM technologies believe that the human capital management phenomenon has helped to connect disparate functions within an organization through common software applications and centralized analytical tools. Through common infrastructure, various functions within a human resources department can connect to a wealth of data and, in turn, deliver important information to those who need it.

Through the use of ongoing e-learning, a company can tie employee development to performance management automatically, linking the impact of training investments to ongoing performance metrics set up within the performance management organization. These performance management tools can administer 360-degree employee assessments, compile that data, target the appropriate outside judges of performance and create a career development plan that coincides with a particular employee’s strengths and weaknesses. This plan is then linked back to the learning management system, where an employee can go to improve in the areas targeted in the assessment. Additionally, these tools provide an analytical layer that can highlight overall competency strengths and weaknesses from division to division, for example, and develop learning plans accordingly.

In terms of retaining talent, tying learning management and performance tools to talent management efforts provides a more strategic way to identify, develop and retain high-potential employees. Furthermore, this method takes this process out of the boardroom and down through the organization, so that talented employees are targeted earlier in their careers. Not only does this provide a company with a deeper executive bench, but it also boosts morale as more employees are viewed as significant to the success of the organization.

What’s next?

With the emergence of on-demand human capital management systems, corporations now face a choice. To obtain the benefits offered by such systems, they must realign their HR and training departments, and be willing to forgo prior investments in functionally specific but non-integrated applications. The benefits of integrated human capital management systems should easily outweigh the costs of such a transition.

First, rapid deployments available through on-demand applications minimize the up-front risks. Second, the typically modular design of such applications enables a phased deployment that can meet a corporations’ need for controlled change management. Third, the return-on-investment (ROI) available through integrated HCM technology is substantial—not only do companies receive the value offered by a traditional learning management system combined with the benefits of a third-party or proprietary employee performance management system, but also companies realize returns from their integration.

These benefits include more targeted—and therefore—cost effective training, earlier identification and development of high potential employees, and ultimately higher retention. These benefits, in the end, equal a more focused, effective and goal-oriented workforce that comes to work ready to contribute toward the common goals of the company.

The HCM revolution is taking hold. Ongoing learning has changed forever, and now includes advanced tools to drive a workforce that is more closely tied to their talents, their goals and the overall vision of the company. What are you waiting for?

 Published: March 2005