If you’ve been involved with HR tech over the years, you’ll know that this space has seen significant changes in what’s known as its fundamental architecture. In the early 1990s, we saw the widespread move from mainframe architectures to client-server architectures – that’s what led to the rise of PeopleSoft. More recently, we experienced the shift from on-premise client service to cloud-based SaaS (Software as a Service) systems – and that’s what led to the rise of Workday.
Now though, another important architectural change is on the horizon. This is something referred to as “composable architecture”.
Here’s how Massimo Pezzini, head of research at Workato describes the change: “The application portfolio of a company in five years from now is going to look much more different than it is today in terms of the architecture — more building blocks composed together and less and less of these gigantic application suites, which are super-rich in functionality, but also very inflexible, very hard to deal with.”
HRDs can choose what they need
The way Massimo describes it – and pardon my oversimplification here – is that we used to have several large applications (e.g., HRIS, ATS, LMS) that would be integrated via Application Programming Interfaces (or APIs). Then we began to move to having an intermediate layer of some kind of data warehouse that would combine the data in one place in a way that would make it much easier to use. Now, over the next 10 years, we will likely move towards composable applications where we will have hundreds of much smaller systems that are easily changed and reconfigured. They are knitted together with low code or no code solutions and hence we end up with a system that is much more agile.
This new architecture means that when you are looking for new functionality, for example, some compensation tools, you won’t feel pressured to use the module that came with your ERP. You’ll choose the best one for your needs knowing it can be easily integrated with all your other applications.
Where things could get fuzzy
But…one conceptual change that goes along with the shift to composable architecture is that the line between integration and automation gets fuzzy.
You can’t have automation without integration, and integration doesn’t add much value without automation. Companies coming out of the robotic process automation space like UiPath will become more adept at integration, while companies coming out of the integration space, (iPaaS), such as Boomi, will get better at automation. Then, of course, there are firms like Workato that already combine integration and automation.
That said though, the close combination of integration and automation will improve the impact and efficiency of your HR systems. It can also make data governance easier than if you had many poorly integrated tools.
Questions for HRDs
The good news is that as an HR professional, you can celebrate the fact that you’ll never have to understand composable applications in the kind of detail an IT professional will.
However, even if a high-level description is all you need, a change this dramatic should still give you pause:
- Does this mean the big ERP system we spent so much effort on will gradually be replaced with something quite different over the next decade?
- Does this mean we’ll need HR pros who are good at no code/low code software to help take full advantage of this new architecture?
- Will this affect data governance and compliance?
I suspect the answer to all those questions is yes.
What to do now
So, what actions should you take now?
Firstly – don’t worry. There is no need to over react. No one is coming to throw out your beloved HRIS in the next few years.
However, if you are looking more than three or four years ahead then you should be consulting with your IT team and your vendors about how you might begin to navigate to this new model.
I’d also suggest that irrespective of how fast this new architecture comes to fruition, you will need more and more people with tech-savvy in HR. Even if you plan to work with contractors to do no code and low code work, it will help immensely if you have people on your HR team who understand it.
Finally, on the governance and data compliance side, changing architectures just reinforces the fact that you need to have a strong governance committee that has a view of where things are going not just where they are today.
A good place for HR to start is to look for gaps in the employee experience and consider if the composable approach (i.e., smaller apps, integration, automation), might help. As you fill the gaps you’ll evolve into this new architecture.
I hope you are feeling a mix of excitement and trepidation.
The excitement is that IT architectures are evolving in a way that will remove many of the headaches we face today. The trepidation is that any big change requires a lot of work and inevitably creates risks you will need to manage.