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Many organizations invest in HR and payroll technology expecting transformative efficiency, only to find the solutions create new complexities and fail to integrate seamlessly. The core issue is a fundamental disconnect between the promised capabilities of new systems and the practical realities of existing organizational data and processes. This gap often results in inefficient workarounds, increased support costs, and a failure to achieve the desired return on investment, a challenge frequently highlighted by industry analysts like Brian Sommer.
A primary challenge is that investment in HR and payroll administrative tools often receives lower priority in an organization's overall digital transformation budget. This leads to the purchase of partial, non-comprehensive applications that act as stopgap measures rather than complete solutions. As enterprise software analyst Brian Sommer noted in a Source by ok.com podcast, organizations often end up with one or two applications that don't fully address their needs because comprehensive budgets aren't available.
Even when a more robust, cloud-based system is purchased, the implementation can be flawed. Vendors may perform a simple data transfer from old systems to the new one, a process Sommer calls "mapping right over all their problems." Instead of solving underlying issues, this approach embeds them into the new platform, creating a significant long-term customer support liability. The result is data that doesn't flow correctly across different applications, such as payroll data that cannot directly populate key elements in the finance system's balance sheet.
Faced with integration gaps, companies are often forced to create manual interfaces or build custom sub-systems to make data connections happen. This process, referred to as "massaging the data," is not about manipulating numbers unethically but rather about building inefficient bridges between disconnected systems. These custom-built programs are a drain on internal IT and HR resources but become necessary to ensure basic functionality, such as transferring payroll information to the general ledger. This highlights a critical failure of many tech solutions to offer true, out-of-the-box integration.
External factors further complicate the resolution of these issues. Government regulations around hiring and termination are constantly evolving, and societal shifts like the pandemic or "The Great Resignation" create a moving target for HR technology. Providers struggle to "freeze" a problem long enough to fix it comprehensively, as the real-world environment is in a constant state of flux.
Despite the challenges, certain advanced technologies are creating marked departures from traditional transaction-focused systems. Sommer identifies artificial intelligence (AI), machine learning, chatbots, and robotic process automation (RPA) as genuinely transformative. For example:
However, these tools carry risks. They require skilled management to ensure they function correctly. An Applicant Tracking System (ATS) powered by AI, for instance, could inadvertently amplify existing biases if not properly configured and monitored. The technology is only as effective as the expertise behind its implementation.
A significant concern is the inconsistent customer service often experienced after a system is implemented. Sommer describes a syndrome where providers focus heavily on acquiring new clients but pay less attention to retaining them. Clients can find it difficult to get support for ongoing issues once they are "locked in" to a platform. Furthermore, leadership changes at tech providers can impact service; visionary founders may be succeeded by managers more focused on "hitting the numbers" than on delivering long-term value, leading to a culture that is "long on marketing and short on delivery."
To maximize the success of an HR technology implementation, organizations should:
The goal is to move beyond stopgap solutions and select technology that genuinely connects HR and payroll tools to organizational reality, thereby unlocking their full potential to drive efficiency and insight.
