Champions of the 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
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 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.
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
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. 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.
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
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
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 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?