Consolidation of IT and HR

The Great Convergence: Why IT and HR Are Becoming One

I’ve spent the better part of three decades in boardrooms and server rooms, advising organizations from NGOs to global Fortune 500s. In that time, I’ve seen countless trends come and go. But what I’m observing now isn’t a fleeting fad; it’s a fundamental, structural shift in how businesses operate. The traditional, rigid walls between internal service departments—most notably Information Technology and Human Resources—are dissolving.

This isn’t just an academic thought experiment. It's a strategic evolution, driven by a long-standing pursuit of efficiency and now supercharged by the maturation of artificial intelligence. We are witnessing the birth of a unified internal services model, a convergence that will redefine the employee experience and reshape the very nature of corporate support functions. If you're still managing IT and HR in entirely separate silos, you're not just operating on an outdated model; you're building on a fault line.

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A Foundation Laid Decades Ago: The Evolution of Shared Services

To understand where we're going, we must first appreciate where we've been. The concept of consolidating internal functions is nothing new. The Shared Services model first gained traction in the 1980s and '90s, primarily within Finance departments. The logic was simple: centralize transactional tasks like accounts payable and payroll to reduce costs, standardize processes, and improve efficiency.

On the IT side, frameworks like ITIL (Information Technology Infrastructure Library) provided a blueprint for managing IT as a service-oriented business. This introduced the world to the disciplined concepts of service desks, ticketing systems, knowledge bases, and Service Level Agreements (SLAs). The model was so successful that savvy leaders began asking a critical question: "If this works for IT, why can't it work for other departments?"

This question gave rise to Enterprise Service Management (ESM), the practice of applying IT’s service management principles to other business functions. Some HR, facilities, and legal departments began adopting ticketing systems and creating service catalogs. Yet, for years, this was often a superficial change—different departments using the same concepts and sometimes software but maintaining their distinct processes, data, and teams. The true convergence was hampered by technological limitations and, frankly, a lack of organizational will.

The Common DNA of Corporate Services

The primary driver behind this deeper convergence is the stark realization of just how similar the *transactional* work of these departments truly is. When you strip away the specific subject matter, the underlying processes are nearly identical.

Consider the parallels:

* **High-Volume Transactions:** An employee resetting a password (IT) and an employee asking about their remaining vacation days (HR) are both high-volume, low-complexity requests that can be resolved through standardized procedures.

* **Tiered Support Models:** Both functions rely on a tiered system. Tier 0 is self-service (a knowledge base or portal), Tier 1 is a generalist service desk, and Tiers 2 and 3 are subject-matter experts.

* **Lifecycle Management:** IT manages the device lifecycle (provisioning, maintenance, decommissioning). HR manages the employee lifecycle (onboarding, role changes, offboarding). These two lifecycles are intrinsically linked, yet are often managed through clunky, manual hand-offs between departments.

* **Compliance and Governance:** Both IT and HR are heavily regulated and responsible for managing critical compliance mandates, from data privacy laws like GDPR to employment regulations.

* **The Quest for Self-Service:** For over a decade, the holy grail for both CIOs and CHROs has been "Tier 0 resolution"—empowering employees to solve their own problems instantly. This ambition was consistently thwarted by clunky portals, ineffective search tools, and siloed information that made finding a simple, accurate answer a frustrating ordeal.

AI: The Catalyst for True Unification

This is where artificial intelligence changes the entire equation. AI is not the *reason* for the IT/HR consolidation, but it is the powerful *catalyst* that makes it not only possible but inevitable. The technological roadblocks that kept Tier 0 as a distant dream are now being bulldozed by AI.

Modern generative AI can:

1. **Understand Natural Language:** Employees no longer need to know the right corporate jargon or navigate complex portal menus. They can simply ask a question in plain language: "How do I add my new baby to my health insurance?"

2. **Synthesize Information Across Silos:** An AI-powered service agent can access the HR knowledge base for the policy, pull the correct form from the finance system, and check the IT portal for instructions on using the benefits enrollment software—delivering a single, comprehensive answer in seconds.

3. **Automate Cross-Functional Workflows:** The classic example is employee onboarding. A single request from a hiring manager can trigger automated workflows that provision a laptop (IT), set up payroll (Finance), enroll in benefits (HR), and schedule orientation—all without a single manual hand-off.

A recent BBC report highlighted how some companies are already using AI to handle core HR functions like writing job ads and answering staff queries. Numerous HR solutions companies like SAP SuccessFactors and Workday have been rolling these solutions for a while now and this is just the beginning. By automating these high-volume, transactional tasks with a high degree of accuracy, AI frees up human capital to focus on more strategic work (Remember when manager self-service started to transform the role of the HR business partner?). This effectively dismantles the justification for maintaining separate, large-scale administrative teams in each department.

The New Operating Model: Converged Hubs and Expert Spokes

So, what does this converged future look like? It is not a complete dissolution of all specialized expertise. Instead, we'll see a two-part model emerge as the new standard for internal operations.

**1. The Unified Business Services Hub:**

This will be the central, single point of contact for all employee inquiries and service requests—be it IT, HR, or even parts of finance and procurement. Powered by an intelligent AI front-end and staffed by cross-trained service professionals, this hub will focus relentlessly on speed, efficiency, and a seamless employee experience. The primary metric for success here will be first-contact resolution and employee satisfaction, not department-specific KPIs.

**2. Strategic Centers of Excellence (CoEs):**

The highly specialized, strategic, and high-touch work will not—and should not—be absorbed into the generalist hub. Instead, these functions will be concentrated in lean, expert CoEs.

* **IT CoEs:** Cybersecurity, enterprise architecture, cloud infrastructure, strategic vendor management.

* **HR CoEs:** Talent management and acquisition, organizational design, complex employee relations, leadership development.

* **Finance CoEs:** Treasury, M&A, strategic financial planning, regulatory reporting.

These CoEs will operate less like traditional support departments and more like elite internal consulting firms. Their role is not to reset passwords but to advise the C-suite, solve the business's most complex challenges, and drive strategic initiatives. This aligns with the long-held discussion of IT and HR becoming more strategic partners to the business—by offloading the transactional burden, this finally becomes a reality.

A Word of Caution: Navigating the Inevitable Hurdles

While I believe this convergence is inevitable, the transition will not be without its challenges. Success requires navigating significant hurdles with foresight and deliberate planning:

* **Cultural Resistance:** IT and HR professionals have different cultures, skill sets, and professional identities. Forcing them together without a clear vision and change management program is a recipe for turf wars and failure.

* **Data Governance and Security:** Combining sensitive employee data (HR) with critical system access data (IT) creates an immense concentration of risk. A robust, unified security and data privacy framework is non-negotiable.

* **Leadership and Governance:** Who owns this new converged organization? Does it report to the CIO? The CHRO? Or does it require a new C-level role, like a Chief Business Services Officer? The answer will vary, but the governance model must be established early and with absolute clarity.

The Future is Unified

For decades, we’ve organized our companies based on functional expertise. But our employees don’t experience their workplace in departmental silos. They experience it as a single journey. The convergence of IT, HR, and other service functions is the ultimate alignment of our internal operating model with that human reality.

This is more than a cost-saving measure; it’s a strategic imperative to build a more agile, responsive, and efficient organization. It’s about creating a frictionless employee experience that empowers people to do their best work instead of fighting corporate bureaucracy.

My advice to fellow leaders is to start looking past your organizational chart. Begin the conversation not by asking "Who owns this?" but by asking "What is the ideal experience for our employees?" Map that journey, identify the friction points between your departments, and you will see the undeniable logic of a unified future. The technology is here. The business case is clear. The only remaining variable is leadership.