Digital HR Transformation in Defence – how can organisations harness the power of technology and Generative AI to improve employee experience and HR operations?

The role of HR has shifted, leading to new responsibilities and expectations of the function that have moved beyond HR as a reactive people function to an internal business leader. HR professionals are being called on to lead their organisation¹ through large-scale, digital HR transformation to help maintain competitive advantage in an increasingly digital age. This is from a recognition that harnessing technology can support HR in delivering against expectations of leadership and the workforce, in that digital HR can drive a better employee experience through access to HR services at the touch of a button; and support business outcomes through AI-driven predictive insights for performance, behavioural change and specialist skills. Defence organisations come with their own unique set of challenges that the HR function must expertly navigate, while learning from other industries how to make digital transformation stick.

The world of work has changed drastically in recent years with organisations leveraging the power of technology to adapt and thrive. The UK Ministry of Defence (MoD) has recognised the importance of building a “Digital Backbone” to underpin the step-change required to maintain operational advantage for the British Armed Forces². HR is also focused on harnessing technology to improve the employee experience and HR operations³ through programmes such as Corporate Service Modernisation. As the workforce calls for more personalised career experiences, HR can utilise technology to drive learning opportunities based on skills and improve the overall offer to its people and optimise HR processes such as recruitment and performance management. The emergence of generative AI is further raising the expectations of the workforce, but it can also be used as a tool to accelerate digital change.

• Digital transformation is challenging for all organisations due to a host of factors, with one of the core challenges across industries being the ‘brownfield’ nature of their HR technology and data architecture. This often results in HR processes that have adapted to work around this complexity and these processes will require re-engineering when a new platform is implemented. Specifically for Defence, there are additional challenges that they face with HR technology such as system access and connectivity for those in the UK and overseas
• A very complex current state with differing terms and conditions, security requirements and allowances, and
• Having a requirement to track locations for epidemiological reasons but understanding that there are sensitivities around tracking certain locations. Partially as a result of this, Service Personnel and civilian staff often interact with HR systems through dedicated personnel ‘administrators’.

The shift to Digital HR opens up empowerment and enablement of the workforce to self-serve the HR support they need, when they need it, wherever they are based – procuring a new digital tool with aligned processes supports a better user experience and greater HR efficiency. This requires a cultural shift away from the reliance on personnel teams for routine requests that are established as self-service processes in other industries.

So, what can Defence do to make digital transformation successful? 
 

There is much to learn from other industries; below we explore some of the key learnings from organisations that have successfully implemented digital HR transformation.

1. Visible and enduring leadership

Visible leadership is key to any successful transformation journey – digital or otherwise. Senior leadership must visibly invest their own time and credibility in delivering the transformation, as well as empowering others to move the programme forward. They must own the development of a shared vision and benefits case so that there is a single aiming point to work towards as programmatic leadership changes over time. Consistent leadership across a long-term digital transformation programme is challenging in defence organisations given the assignment lengths for leadership - there may be benefit in disrupting this to support driving towards a digital-first organisation. If this is not possible, it could be sensible to explore agile delivery methodologies so that features can be rolled out iteratively, with a single leader driving a feature (or features) through to implementation; this will help bring the workforce along on the change journey where they can see tangible, positive improvements to their user experience.

It is also critical to keep governance as simple as possible. Central to this is identifying who has authority to make decisions. There is a tendency to try to consult with all assumed authorities across the organisation without clearly understanding who the ‘core decision-makers’ are. In addition, the objectives of digital HR transformation include a strong focus on user experience, so users need to be included in the design of the digital solution.

To manage the optimal amount of consultation, the Bureau of Global Talent Management (GTM) at the U.S. Department of State leverages a federated governance model to streamline decision-making while also ensuring that end users are represented. Since 2020, the GTM Chief Technology Officer (CTO) has served as the product owner for GTM Next - a cloud-based employee service delivery platform built on ServiceNow that automates HR activities and creates a personalised employee experience. Housing eight unique applications (e.g., case management, onboarding, performance management, etc.) built on a case management foundation and used by over 27,000 customers throughout the enterprise, the GTM CTO has identified a unique product advisor to sponsor each application through end-to-end deployment. Identified product advisors sit in the offices that shape policy and process at the core of each application and are empowered to bring the employee perspective as well as to make design decisions that best meet customer needs. These application-specific product advisors also provide input early regarding change management and readiness for their specific customer population leading to user adoption and higher customer satisfaction upon release. However, when design decisions or proposed change requests have the potential to impact multiple applications across the platform, the GTM CTO serves as the arbiter to gather additional information from each product advisor and make the final decision.

2. People-centred transformation 

Transformation programmes are typically met with some level of resistance. To help combat this, it is important to answer the question: “what’s in it for me?”. Identifying and communicating positive changes and early wins for end users will enable the overall success of the programme as people have a vested interest in embedding the change. 

A global hotel chain delivered a UK payroll transformation and focused on communicating the improvements that would be felt within the workforce. The organisation made the strategic decision to move their UK payroll processing in-house, leveraging the Oracle HCM Cloud Payroll capability. This decision was due to the existing outsourced processes lacking flexibility and requiring many manual calculations and adjustments to be made resulting in complex payslips and increased effort. To support bringing this change to life for people, a large focus was placed on communicating the individual benefits that would be felt across the organisation. This included simplified payslips, faster on-boarding to payment for team members paid hourly and quicker turnaround time for payroll changes. Alongside these benefits, it also created a better experience for onboarding new hotels to the system (thereby delivering customer benefits) and reduced the administrative burden on managers and HR.

3. Digital transformation as a gateway for additional change

A new IT system alone is not enough. Successful organisations recognise the potential for digital transformation to unlock something much bigger. It creates the perfect opportunity to simplify processes and processes, make structural change and cleanse workforce data. Organisations should grasp this opportunity to redesign processes for the new digital system rather than digitise existing processes; using digital transformation as an opportunity to review ways of working can support the organisation to operate more effectively. In 2018, a UK retailer procured a new HR system which supported the organisation in moving to a centralised HR model and outsourcing its payroll processing⁴.

Organisations often focus on the end goal of implementing a new system, and later regret it. Either through not fully appreciating the wider case for change, or because limitations on time and resource drive towards a ‘minimum’ definition of programmatic objectives, the intent for wider change falls by the wayside. It’s important for organisations to maintain a focus on the larger goals that can be delivered through digital transformation, such as increased employee experience, and optimised HR processes and operations.

4. Start small and build iteratively

Historically, many organisations, including Defence, have tried to deliver digital HR transformation as a monolithic programme of work e.g., Joint Personnel Administration (JPA) implementation in 2006⁵. Other organisations have found that an iterative approach to transformation is more successful. Many organisations are now opting for a hub and spoke model where they have a core HR tool with a wider ecosystem of HR apps to deliver the end-to-end HR service. This model lends itself to the ‘start small and build iteratively” mantra as HR apps can be deployed overtime based on organisational priorities. However, for this model to be successful, it’s important to ensure the organisation has the technical capacity to adopt and deliver new processes in this way.

When taking an iterative approach, it’s important to think strategically about the sequencing and end goal(s) of the transformation to ensure the solution meets the overall requirement. If taking each process area in turn, ensure interdependencies are fully understood and effectively managed to avoid disruption to ongoing HR activities. Defence organisations can sometimes aim to do too much in a single process – believing that this will drive simplicity. However, this can have the converse impact of driving added complexity. Simplifying multiple individual processes but having more of them may be a more adaptive approach.

HR departments have much to consider when embarking on a Digital Transformation. Whilst the transformation may deliver numerous benefits to the HR Team through reduced administrative effort, it’s important to ensure the benefits to the leadership, the wider organisation and the individuals within it are understood and visibly championed by senior leaders to drive towards success.

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References

¹Katie Neal, “Is there a future for HR?”, Deloitte Future of Work Blog, Is there a future for HR? | Deloitte UK, 11 June 2020

²Charles Forte, Digital Strategy for Defence, Assets Publishing Service, 20210421-MOD Digital Strategy Update Final.pdf (publishing.service.gov.uk), April 2021

³Rick Haythornthwaite, “Agency and Agility: Incentivising people in a new era”, Assets Publishing Service, Agency and agility: Incentivising people in a new era (publishing.service.gov.uk), June 2023

⁴Zoe Wood, “Sainsbury’s to cut 2,00 jobs across UK”, The Guardian, Sainsbury's to cut 2,000 jobs across UK | J Sainsbury | The Guardian, 17 October 2017

⁵“Annual Report and Accounts 2006/2007”, Assets Publishing Service, Armed Forces Personnel Administration Agency Annual Report and Accounts 2006/2007 HC 583 (publishing.service.gov.uk), 2007