Call it dealing with the whole person. Disconnected strategic human resources applications—incentive management, employee performance management, workforce scheduling, and training and learning management—offer CIOs an integration opportunity that could bring new benefits to the enterprise. Merge those applications into a closed-loop system, analysts say, and the enterprise can reap the same kinds of rewards with its "human capital" management as it has with its supply chain management. And CIOs could help drive real ROI for the company by approaching HR systems strategically.

"If you don’t integrate these systems, the business will still run today," says Sandra Lee, director of talent management at biotech firm Invitrogen. "But if you don’t start now for the long term, you’re going to be paying for it a few years down the line."

Past HR-oriented IT efforts focused on operational systems such as payroll, usually with just minor CIO involvement, but analysts and consultants say strategic HR applications have more potential to benefit the enterprise, especially as baby boomers retire during the next decade, creating labor and knowledge shortages. When that happens, business success will ride on making the best use of staff. Compliance requirements such as Sarbanes-Oxley have also caused some organizations to examine HR management as a whole, particularly compliance-oriented training, and that has helped raise the profile of the greater strategic HR need, analysts add.

With the CIO’s help, HR is also now ready to tackle strategic issues such as performance management, training and succession planning, says Lisa Rowan, program manager for HR management and staffing services at IDC (a sister company to CIO’s publisher). That’s because the HR information systems for employee records, payroll and benefits management are now largely in place or outsourced. "They’re getting to the point where the HR information system is taking care of the administrative burden," she says, freeing HR executives to tackle strategic issues. CIOs should help champion and lead these efforts, she says, rather than continue the past strategy of letting HR staff fend for themselves, since a strategic HR IT effort could greatly help the entire organization.

Today, the various strategic HR applications—often called human capital management applications by vendors—are regularly installed as standalone departmental applications with minimal CIO involvement. "A lot of people put in a bunch of single components and never look at the whole system," says Larry Carr, a business professor at Babson College who’s writing a book on management control systems.

Piecing It Together

Linking some or all of these systems can allow more intelligent use of HR applications. For instance, using an integrated human capital management system, a company could assess hiring strategies by tracking new employees’ performances after they are hired or apply incentives methodically and automatically based on "soft" goals such as effective leadership.