A new study reveals organizations that have implemented Human Capital Management (HCM) platforms are seeing dramatic increases in their use of artificial intelligence and data-driven decision making within HR departments.
The report from Strada and ISG found that companies with modern HCM systems experienced a 500 per cent increase in AI and machine learning usage in their daily HR operations, along with a 44 per cent rise in data-driven decision making.
Based on a survey of 190 global companies across multiple industries, the research focused primarily on organizations that had implemented Workday HCM. Among these companies, 91 per cent reported successful HCM transformation projects, significantly outperforming industry benchmarks where typically half of such initiatives fail.
Automation and process improvements
The transformation efforts delivered measurable improvements across HR operations, with companies reporting a 66 per cent rise in system integration and 55 per cent increase in process automation, according to the report.
“Success starts with strong foundations – a solid platform that drives agility and growth, best-practice configuration, and a modern operating model built for the future that supports the business at every step,” said Sean Campbell, Strategic Advisor at Strada.
Organizations also reported a 49 per cent reduction in HR processes being described as complex. Prior to deployment, only 12 per cent of companies described their HR processes as somewhat easy, but post-deployment that figure rose to 45 per cent.
Challenges remain in maximizing AI potential
Despite the significant growth in AI adoption, the research indicates many companies aren’t fully leveraging the technology. The report found 68 per cent of organizations still use AI and machine learning only “rarely” or “sometimes.”
This gap is often linked to persistent challenges including data security concerns, trust in AI insights, and the need for deeper internal expertise, according to the report.
“HCM transformation is more than just implementing new technology – it is about enabling HR to drive business growth, foster engagement and unlock the full potential of its workforce,” said Gaurang Pagdi, Principal Analyst at ISG.
Skills development underway
The report also highlighted that 90 per cent of organizations have already taken steps to enhance digital skills, particularly in emerging areas such as AI and machine learning. While only 4 per cent said they had no skills in this area, 34 per cent described their capabilities as still developing.
