AIHR Live – Episode 4 with Tako Zoutman

In this interview, I talk with Tako Zoutman. Tako is an experienced HR professional who has always focused on HR systems, data, and transformation. This is exactly the topic of this new episode of AIHR live.

Erik van Vulpen: Hello everyone, and welcome to AIHR Live. I’m here with Tako Zoutman. Tako, welcome! Can you please briefly introduce yourself?

Tako Zoutman: Yes, I can. I am Tako. I’m working in HR as an independent HR consultant and since the last 10, 15 years specifically focusing on HR system technologies, data and transformation. Interesting work, but that’s what I’m doing and then supporting organization in that area.

Erik: Fantastic. Today we’re going to talk about HR systems, because I think a lot of people in HR, they really know how to work with people but the system side is a bit scary. Why is it so important for HR to stay in the lead when it comes to their systems and their system management?

Tako: Basically because it is about their systems. The system itself is not that relevant, but I think more and more organizations start to realize that systems are supposed to support organizations. If HR is not in control around the systems, they are being led by the choices that someone made in the systems.

If it’s not HR, and if it’s just not connected to basically the why question, what do we need? What kind of thing do we need for the organization? Then you potentially end up with systems which will lead you to a next step, which you might not have thought about before.

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Erik: Can you give an example of that happening in daily life?

Tako: It’s an interesting example. In HR systems, a lot of providers, suppliers are telling great stories about it. Everything is possible, everything is an Apple lookalike and those kind of things. It’s very attractive, but if you talk about, for example, a time application which a lot of organizations like. They want to have time registration, but if you start talking about time, you also start talking about what do we currently do with time?

What do we need it for? What is the purpose of registering time? For a finance manager, there’s a totally other reason than for an HR manager. One of the challenges with time registration is always who’s owning, by the way, the topic. But two, it’s always, HR complicates time most of the time due to legislation. Let’s say, legislation around leave, sick leave or legislation around fathership, father leave when you get a child.

For finance, they’re not that relevant, but it complicates a process. If you want to install a time application, it sounds sometimes easy, but you have to think about how to prepare. What am I currently doing to do that? For example, if workforce planning is done in an Excel sheet, how do you want to introduce a digital way of doing time registration? Because these two are connected to each other.

Erik: We’re diving right in. I think that’s good. What you’re saying is that for finance, when finance will be at the lead requirements for the user requirements will be very different compared to when HR is in the lead?

Tako: Yeah. Talking about HR system is good, but I hope people realize it shouldn’t be the start of the aim of talking about it. The system itself shouldn’t be in the lead. It should be the aim, the goal of the organization. What do we want to achieve? If you have defined that in a proper way, hopefully via having a good strategy, how to go forward.

How do we want to facilitate our employees? How does it match and how does it match with improving our business results? If you have defined that, then based on that, define your requirements. Align it with your other stakeholders who are there, and then start looking at the real system. The technology.

Erik: You’re saying we need to start with the why?

Tako: Yes.

Erik: Just talk about analytics. As always, start with a business problem. Start with the why. Also when you’re talking about systems-

Tako: Basically, that’s the case.

Erik: You need to start with the why. You have had a lot of experience consulting in HR and working with HR systems as an HR director, and also in consulting roles. In what percentage of the cases, your experience has HR been in the lead and in what percentage of the cases has, either IT or a different department been in the lead?

Tako: It depends, of course, a lot about the size of the organization. What I generally have seen that in larger organization IT departments are much more influence than in the smaller ones. That’s also because you see each other easier and it’s also a question, where is the budget located? I’ve noticed that when the budget is located outside the department like HR for the IT component, IT is in the lead.

Which is understandable, but then you need to check and to work with IT to make sure they understand your needs as an HR department. You really need to invest time in making them aware, and on the other hand, you have to invest in their way of communicating, as well. I’ve been working with IT departments, which have been very knowledgeable about the technology.

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The business of HR for them, it doesn’t matter whether it’s HR or finance or it’s a process or a functionality. Then you potentially end up in conversations, IT talking techie and HR talking HR. Looking at each other and don’t understand or think they understand, and then you get the issues.

Erik: Say you’re in an organization where the budget lies with IT? How do you then work together and make sure that you have a role in the process as an HR manager?

Tako: One of the things that I’ve seen working in organization is that in HR, you have to realize it should have people who are able to talk like IT, and the other issues around it as well. I see a lot of organizations where IT starts working with account managers or those kind of roles, that have an obligation to understand their business.

My aim and what I’ve always said to organizations, “You need to do the same. You need to have someone in your organization, HR, who understands the challenges of technology. Is able to talk with the technology partners,” whether that’s inside or external, doesn’t matter. HR IT, HR technology, is a serious role and should be a serious activity inside any HR department.

Erik: My next question is when it comes to HR systems, how do you as HR keep influence in, well, the decision of buying the software and also in the implementation? Because the implementation project will probably take take much longer, how do you guarantee that you’re up-to-date and you stay active in that implementation?

Tako: I think it starts in the beginning, already. If you set up governance around the project when you’ve decided you want to move towards another system or technology, you need to ensure that in the governance model you have secured your role and position as an HR department. Who takes the decision, you need to clarify that up front. If you do have to do it as well, while you’re doing it, you could end up in endless conversations sometimes.

The other part is, during the project, the world outside is not standing still. A lot of these projects take time. Six months, 12 months, 18 months are normal time for, especially for the larger implementation. It suggests that the world around is not moving, and that’s not true. When you set up your requirements in a proper way, you need to ensure that these requirements are updated during the project as well.

That’s the role HR needs to include in setting up a project, is that constantly the check is being done. Are we still in line with what’s happening in the business? If a business for example, decides to do a change in strategy or, that would be interesting because then you need to check directly, “Hey. Are we still fitting with that?” as well.

It can even be, because of course, legislation has an influence on a lot of things in HR systems. Are we able to capture them? Did we agree already with our supplier to capture it during the project? How do we manage that? I always said, “Work as agile as possible,” because that gives you a possibility to influence, to change, to move around during the project.

Erik: You need to work in an agile way because business strategy might change, because of GPR regulations.

Tako: GDPR regulation, yeah.

Erik: For example, that they’ll mess things up in a significant way for some organization, for some implementation projects. Also there’s, the market is changing really rapidly. The number of IT …

Tako: Providers.

Erik: IT providers and HR software providers are skyrocketing. How do you keep up in the changing landscape? That also has to do with agility, I assume. How do you keep up with that rapidly changing landscape when an implementation project can take 12 to 18 months?

Tako: Basically what you see happening in the market, you see a new layer of partnering is starting to exist. There are already quite some companies who are in that middle layer active. They support you as an organization in figuring out, this is our need. That’s their typical consulting activity. Then the next thing was investigating what’s available in the market.

You’re right. If you look at basic HR systems in the Netherlands, it’s already about 200 of these providers. Small, big ones. Figuring out which one is the best, that’s already a job itself. I don’t think it’s possible for anyone to keep up on all, but get yourself informed. Talk with your clients, competitors in the market. Make sure they understand what they are doing.

Get a grips. Go to a conference once in a while just to see around, to look around what’s there. Again, based on your requirements, what is your need? Why do you want it? If you’ve defined it, you will notice that you are able to look much smarter to the market with a much more focused, let’s say, orientation than if you start looking with these HR systems.

Erik: What’s also interesting, I think, is that one of the questions we often get is, “Hey, where do I get started?” Because there are indeed, hundreds of providers. Where do I even get started? That’s a real concern for a lot of HR people, that they have a sense of what they need. They might also have a business problem. Let’s hope that they won’t dissolve.

They have a sense of what they need. First of all they say, “Hey. Make sure that you know your user requirements. Make sure that you know the problem that you’re actually trying to solve.” Even if they know that, how do you find the right supplier and the right partner to work with? Because you can go to a conference, but then …

Tako: Yeah, and a conference, that’s information gathering. I am advising people to do that in the first stage of the project because it gives them also the opportunity to deep dive a little bit and get an understanding what kind of requirements you might have, that you are not aware of.

Erik: See how different systems work – it’s very informative.

Tako: Exactly.

Erik: It’s very informative.

Tako: The second thing is that, you need to figure out what kind of support do I need? That is depending on, how do we work as an organization? What is our culture? I was yesterday with a very small client, 500 people. Very informative organization and I was thinking, “Okay. If they want an implementation partner for an HR system, I’m not going to ask the big consulting company,” because basically they work from a structured, more standard way.

The question is how are they able to adapt to their way of working? On the other hand, finding someone who matches exactly with your way of working is also tricky. You need to have someone who matched but also is able to challenge you because the rest is quite regularly in the fact that you do it like you’ve always done it. In these kinds of projects, you need to figure out how should we do it in two years or three years so we still are able to facilitate the organization at that time?

Erik: Then where do you get started as an HR manager? You know the requirements. What’s the next step?

Tako: Get advice. Get advice from your peers. That’s what I’ve learned in the last few years. Make sure you meet your peers. Peers are not only HR managers, but it could be others as well. Talk with IT managers, talk with finance managers. Everybody is struggling with digitalization and systems. You’re not alone in the world. Talk. Go out. Go out of the office. Get out of your location. Meet people and via that, allow yourselves to introduce yourself in the great world of digitalization.

Erik: I think that’s excellent advice.

Tako: If you don’t like it, because it could be, it’s one of the challenges that HR might not always being the best, interested in technology. That is rapidly changing. If you don’t, get someone who likes it, because those are the people are like to start googling around and figuring out. To be honest, take half a day behind your computer and you already get a lot of information which starts grabbing it.

Then at some point you’ll need to decide, am I going to do it alone? Together with IT? Do I have enough support in my IT department for example, for this? Do I trust these people? Then you need to figure out what kinds of support you’ll need for it. I know there are organizations who are very good in benchmarking all the providers. There are some smaller consulting companies who have very interesting methodology that which they more or less use.

When you have your requirements, they put it in their engine and then based on that in an updated database, you get info about, these seem to be the best messaging products for your needs. You can do it yourself, but on the other hand the world becomes so complex and vague, I think it starts to be relevant to make sure that you have the correct support for that.

Erik: No, I think that’s a fair call. One more question I think that we left unanswered and that they still want to ask you is about the budget allocation in IT, versus for HR. In an ideal world, say you could create your own organization and I know you will be the HR director in that organization. Would you have your own budget? Or would you say, “Hey, that budget is better allocated in the IT department, as a design option”? Would you locate it in HR or in IT? I know you’re thinking-

Tako: It’s quite a tricky question.

Erik: I’m curious to know why.

Tako: Because there are benefits on both sides.

Erik: Can you explain the benefits for both sides?

Tako: Basically if it is in IT, it depends on how an organization looks at budget. I’ve seen organizations where the budget is just meant to make sure it’s just as small as possible for supporting activities. In that case, I would advise to have the budget in HR. Because then you can challenge the budget according to business cases. What is it going to benefit us as an organization, according to my responsibility as an HR director?

Currently we are paying this. But to be honest, that can be done by IT as well. I’ve seen both sides and it seems to work, although I think if the budget is not in HR, which means the budget of HR systems is part of a larger budget where finance and all the other departments are included as well, it becomes one of the factors which is relevant for decisions about budget, or expenses around this.

If you are responsible for your own IT budget, HR is the one and only element that is influencing the discussion. You can exchange it even with the fact that you have your other parts of your budgets as an HR director. Because you have your own staff, you have systems. You might have training budget.

To be honest, if you can juggle around a little bit with all those budgets, you’ll have potentially other opportunities in designing a business case than if the budget is in IT. There is no ideal world, because this depends quite a lot on where, let’s say, how an organization’s working. Both can be done but, you’ve got to figure out what’s the best for you.

Erik: Fantastic. Well Tako, thank you very much.

Tako: Yes, thank you.

Erik: Everyone, thank you for listening. My laptop just made the sound of the battery running out, so we’re going to wrap up the interview. Thank you very much, and I hope to see you in the next episode!