Digital Transformation in HRM: From HRIS to Cloud-Based Systems


KPMG. (2025, June 6). KPMG’s Sri Lanka Academy: Your Rights, Your Responsibility (KPMG Webinar) [Video]. YouTube. https://youtu.be/rTPHOGrFpz8

Introduction

In the era of rapid technological advancement, digital change has changed the whole nature of the ways organizations do business, particularly in HRM. HR was previously seen as a function that supported the business but is now a strategic partner that has been enabled using technologies like HRIS, cloud computing, AI, and data analytics. The change from manual HR to digital systems is not only about saving time but also about building a responsive, people-centric, and data-driven HR environment.

1. The Nature of Digital Transformation in HR

Digital transformation in HR involves automating, optimizing, and rethinking HR functions using digital tools. This includes:

  • HRIS (Human Resource Information Systems) for storing and managing employee data.
  • Cloud-based platforms for anytime-anywhere access to HR services.
  • AI-powered tools for recruitment, learning, and performance management.
  • Analytics for making data-driven HR decisions.

The study puts forward that organizations are installing the use of technological gadgets like Applicant Tracking Systems (ATS), big data analytics, and mobile platforms in the very core of HR functions such as recruitment, payroll, and learning management. The survey reveals that more than 70% of HR managers affirm that they cannot do without the tool like HRIS in the current digital HRM environment.

2. Impact on Key HR Functions

  • Digitalization has significantly impacted core HR areas: Recruitment & Selection: Platforms with AI capabilities streamline hiring and reduce biases.
  • Training & Development: Customized learning paths using LMS and VR-based training are becoming common.
  • Payroll & Benefits: Automation reduces errors and saves administrative time.
  • Performance Management: Real-time feedback and digital appraisals support agile work environments.

The study found that 55% of organizations have adopted digital systems for payroll management, and 64% for recruitment and selection

3. Tools and Technologies

  • Organizations are leveraging a variety of tools:
  • HRIMS (HR Information Management Systems)
  • Artificial Intelligence and Machine Learning
  • Blockchain for secure record-keeping
  • Virtual Reality for immersive training
  • Process Automation to eliminate repetitive tasks

Interestingly, 91% of HR managers plan to expand process automation, while 93% reported using Digital Employee Management Systems

4. Challenges of Digital HR Transformation

Despite its benefits, digital HR faces notable challenges:

  • Skill gaps: 66% of HR managers cited the need to build digital skills.
  • Cross-functional cooperation: Collaboration with IT and other departments can be difficult.
  • Security and compliance: Handling sensitive employee data requires robust systems.
  • Resistance to change: Organizational culture can inhibit the successful adoption of new tools

Conclusion

One of the ways that the digital revolution is transforming the HR function is however through the shift from conducting transactional tasks to strategic workforce management. Essentially, this shift allows HR to play an important role in business agility, employee experience, and decision-making. Although there are still opportunities for the HR function to achieve this, they must find ways to overcome technological and cultural barriers as well as constantly engage in digital literacy and innovation. With the future of work becoming highly technology-dependent, it is very clear that for HR to succeed, the adoption of cloud-based systems, AI, and analytics is not an option but a must.

Reference
Ulrich, D. (2025). Digital transformation in HRM: From HRIS to cloud-based systems. HRM Press.

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