Digital transformation continues to accelerate across all sectors, blurring the boundaries between traditional business functions. Nowhere is this more evident than in the evolving relationship between human resources (HR) and information technology (IT). With the rise of software as a service (SaaS) based enterprise resource planning (ERP) platforms, hybrid teams, and data-driven decision-making, a critical question is emerging: could a deeper integration, or even a merger, of HR and IT functions unlock new efficiencies and transform the employee experience?
As our reliance on digital platforms grows, the synergy between people strategy and technology delivery is no longer just beneficial, it’s essential. For many organisations, HR and IT have operated in distinct silos, leading to misaligned priorities and frustrated users caught in a loop of unresolved queries. But what if these two powerful functions came together?
A recent report from the BBC revealed, “Some 64% of senior IT decision makers at large companies expect their HR and IT functions to merge within five years,” this was according to a survey by Nexthink. The news story highlights why some firms have merged their IT and HR departments. Focusing on case studies from the likes of biotech company, Moderna, and customer care software and services company, Covisian.
Fabio Sattolo, Chief People and Technology Officer at Covisian, who merged their teams in 2023, said: "If we bring these two together, we can have a common vision for how technology can have an impact on people and how people can adapt and evolve to leverage the new technology."
Why consider merging HR and IT?
The primary driver behind this conversation is the need for seamless alignment. Many organisations are currently implementing or upgrading their enterprise resource planning (ERP) systems, a process heavily dependent on HR and IT teams working in harmony. When these teams are integrated, collaboration on digital platforms improves, system ownership is streamlined, and people strategy aligns perfectly with technology delivery.
However, when these departments operate in silos, the consequences can be significant. Misaligned priorities, duplicated efforts, and slow responses to change requests are common. You often find business users frustrated with HR, HR frustrated with IT, and IT frustrated with the business, creating an unhappy merry-go-round of accountability. A unified structure has potential to break this cycle.
The benefits of a unified approach
Merging HR and IT is more than just an organisational reshuffle, it can be a strategic move to create a more agile, responsive, and employee-centric organisation. The potential advantages are compelling.
An enhanced employee experience
A unified approach can create seamless digital touchpoints for every employee. Critical processes like onboarding, performance reviews, and accessing payroll information become user-friendly and intuitive. Employees want this information at their fingertips, and it is frustrating when the response is “computer says no." A merged function ensures the focus remains on the user, delivering a joined-up response to queries rather than passing people between departments.
Streamlined implementation of HR technologies
Integrated teams produce the best work. When a team moves in the same direction under a shared strategy, its output will always be superior to bringing two separate functions together for a new project. When you ask IT to build or implement a bespoke ERP solution, you get better results if they have a deep understanding of the requirements and have HR representation involved from scoping through to build. Joint ownership ensures systems are technically sound and fully aligned with HR processes, boosting usability and adoption from day one.
A more agile and transparent culture
Aligning technology and people strategies can have a profound impact on company culture, particularly regarding transparency and agility. Technology can be used to complement your people strategy, and vice versa, rather than having them operate independently. A key part of this is bringing in the right ERP system for your business and its goals, rather than IT making those decisions alone. This alignment is crucial for driving employee engagement and fostering a culture of continuous improvement.
The challenges and risks of a full merger
Despite the clear benefits, merging HR and IT is not without its challenges. The idea of bringing two historically distinct functions together requires careful consideration of the potential downsides.
Traditionally, HR and IT attract very different types of people with very different skill sets. While HR is people-centric and deals with nuanced human issues, IT can be more linear and binary. You would not typically find a hands-on technical expert moving into a HR role or vice versa. The roles attract different personality types and skill sets so bringing these teams together under one roof should, in theory, create a beautifully harmonic operation of complimentary skills, but it is not always that simple.
There are definite crossovers, but there are also plenty of use cases where the two functions do not overlap. For example, performance management and employee relations are only tangentially related to IT infrastructure. A full merger could risk diluting the specialist expertise required in each area, creating a team that is a jack of all trades but a master of none. The cultural clash between a people-focused function and a technology-focused one could also lead to friction and inefficiency if not managed carefully.
Finding the right model for your organisation
So, is a full merger the only option? For most organisations, the answer is no. While a complete structural overhaul might be too disruptive, there are other ways to achieve the desired synergy.
In my opinion, for most organisations, it would be worthwhile to bring the two parts of the business closer together, perhaps under the same director as one business unit, but keeping the actual teams and their operating rhythms separate. This maintains specialist expertise while fostering strategic alignment at a leadership level.
Another highly effective approach is to form a hybrid team. Creating a dedicated group with representatives from both HR and IT who are jointly responsible for the configuration and change control of key systems is a practical happy medium. This model is particularly relevant for managing modern, SaaS-based ERP systems, which require constant upgrades and maintenance. It ensures that both technical and people-centric perspectives are always at the table.
How to evaluate the right path forward
Before embarking on any structural change, organisations should take a measured approach.
1. Assess current bottlenecks: Start by identifying the pain points in the collaboration between your HR and IT teams. Where are the delays? Where are the communication breakdowns? Understanding the specific problems is the first step toward finding the right solution.
2. Define your strategic goals: What do you want to achieve? Are you aiming for better employee experience, faster technology adoption, or improved data governance? Your goals will determine which model is most appropriate.
3. Pilot hybrid teams: Before committing to a full structural change, pilot a hybrid team on a specific project, such as an ERP upgrade. This allows you to test the collaborative model, identify potential challenges, and build a case for a broader change.
4. Consider your size and industry: This kind of integration is most beneficial for large enterprises and technology-leading businesses. For smaller organisations, the complexity of a merger is likely to outweigh the benefits.
The future is collaborative
While full mergers of HR and IT are still rare, the case for closer collaboration is undeniable. As digital platforms evolve and employee expectations for seamless digital experiences rise, the ability to integrate people and technology strategies will become a key competitive differentiator.
The future of work demands that HR and IT operate in true partnership, not just coexistence. Whether through hybrid teams, shared governance, or a carefully planned structural realignment, the organisations that successfully bridge this gap will be the ones best positioned to thrive.
We can help you modernise people processes, structure, and strategy - enabling agile, data-driven people functions that are future ready, inclusive, and aligned with business goals. Find out about our HR digital transformation solutions.
