HR technology is the bedrock of many people teams, but updating this technology hasn’t always been a top priority. Lattice’s 2027 State of People Strategy Report reveals how that’s changing.
The right HR tech helps drive tangible business outcomes, like driving employee engagement and aligning everyone around the same company goals. But the complex nature of managing people also makes it difficult to measure those outcomes and justify the value of an investment.
As organizations become more data-driven and budget-conscious, CFOs rely on hard numbers and need to understand what they’re getting in return for every investment. For HR leaders, that means making the case for HR tech in terms of business outcomes, not features and functionality. It also means working with finance to define what success looks like, how it will be measured, and understanding what could stand between an investment and the results it's expected to deliver.
To help build stronger partnerships between HR and finance, we’ve examined four HR technology trends from the 2027 State of People Strategy Report, alongside advice from HR and finance professionals on how to evaluate HR software, avoid common pitfalls, and demonstrate its value.
1. Updating tech is HR’s fastest-growing priority, up 28% since 2025.
It’s not surprising that employee performance and engagement remain top priorities for HR. But the technology that helps support these outcomes is also getting its moment in the spotlight. The 2027 State of People Strategy Report found that updating HR tech is the fastest-growing priority for HR teams globally, up 28% since 2025.
For these teams in particular, it’s the leading priority:
- High-performing teams
- European HR (particularly France)
- Blue-collar companies
- Large and enterprise companies (500+ and 1,000+)
- HR teams of six or more people
- Respondents who are ‘really excited’ about AI
One reason for this shift may be that organizations are increasingly recognizing the true cost of ineffective HR tech. “The only thing more important than the people in an organization is the technology that supports them,” explained Trice Stevenson-Wright, an executive people and operations leader and advisor. She pointed to the potentially costly consequences of failures in people systems, which can span the entire employee journey, from talent attraction and onboarding to retention and exit interviews.
For CFOs, those consequences make the decision to invest in HR tech about more than just the HR budget. The right systems can give better business visibility into what is often an organization's single largest cost — its people. “Payroll is usually the biggest line on the P&L, often bigger than every other expense combined,” said Lisa Press, a US CPA and FMVA-certified finance leader and founder of Lisa Press Consulting.
“When HR asks for tools that improve headcount visibility, that's not an HR request; it's a request to get better control over the company's single largest cost,” Press said. “CFOs who treat it that way, instead of as a departmental nice-to-have, make faster, better decisions.”
Once the decision to invest in HR tech is made, the next step is arguably more important: choosing which technology to invest in. And new data suggests this is where many organizations get it wrong.
2. Nearly half of HR teams regret a recent software purchase.
Updating HR tech might be a priority, but that doesn’t mean every tool delivers the expected return. The 2027 State of People Strategy Report found that 47% of HR teams say they have buyer’s remorse over at least one HR software solution from the past two years.
Top reasons for they regret their investment include:
- Functionality falling short of expectations: 50%
- Integration challenges: 34%
- Poor usability: 34%
Integration is particularly important because HR tech rarely operates in isolation. A new platform needs to work with the systems an organization already relies on, or it risks creating more work, not less.
“One of the biggest missteps an organization can make is purchasing new HR technology that doesn't talk to any of its other systems,” explained Stevenson-Wright. “So while you have this shiny new toy, what you've actually created is more manual process work for your people and operations teams.”
Stevenson-Wright added that this can lead to data-integrity issues and negatively impacts the employee experience. “And then the organization never actually realizes the value it bought into.”
The answer isn’t necessarily to choose the latest platform, or the one with the most features. Chuck Marcelin, director of HR at HVPG, explained that before he brings in any new tool, he wants it to hit close to five things: “Better technology, better pricing, better customer support, meaningful AI or automation value, and clean compliance for our industry.”
He also explained that vendor honesty is an important consideration. “I trust a vendor more who tells me their tech is a 6 out of 10 and their support is excellent than one who tells me they’re better than every competitor on every dimension, because the grass is never that green.”
In other words, updating HR tech shouldn’t be about finding a platform that promises to do everything better than anyone else. Instead, it’s about finding technology that does what the organization actually needs. But even when a company chooses the right HR software, there’s another potential issue: how well it gets rolled out and adopted.
3. High-performing HR teams are six times more likely to identify rollout issues than low-performing teams.
When HR software doesn’t deliver the results or ROI people teams were hoping for, it can be tempting to blame the tool itself. But high-performing HR teams understand the real explanation is often more nuanced.
The 2027 State of People Strategy Report found that among high-performing HR teams, 43% were more likely to blame internal rollout issues than the tool itself, compared to just 7% of low-performing HR teams.
Stevenson-Wright noted that this may reflect high-performing teams’ ability to better discern rollout and change management issues from actual technology issues. “These teams have the experience and expertise to have full visibility into the product lifecycle, so they're better able to distinguish between the what and the how.”
The “what” is the technology itself. If it meets the organization’s requirements in terms of capabilities, it might not be the issue. The next question is the “how.” Stevenson-Wright said at this point, organizations need to consider the following:
- Do you have a change management plan?
- Do you have adequate project planning?
- Are all stakeholders identified and involved?
- What are you doing relative to enablement?
- How are you bringing leadership, managers, HR business partners, other functional partners, frontline managers, and employees along for the journey?
Marcelin added that a failed HR tech implementation is more than a wasted budget line. “It’s a trust problem. Every tool switch touches real people's daily workflows, and if it goes badly, that damage follows the HR leader who championed it, sometimes for the rest of their tenure.”
4. Analytics is the fastest-growing category of HR tech.
As people teams turn to technology to uncover the data needed to inform better business decisions, it’s logical that people analytics and reporting is the fastest-growing category of specialized HR software, increasing from 33% in 2025 to 41%.
But it’s also the category of HR tech that’s most likely to fall short of expectations. Pratik Mahajan, senior data analyst at JP Morgan Chase, said it could be because organizations evaluate the software before evaluating the decision it is supposed to improve. “For analytics platforms in particular, more dashboards do not automatically create more insight,” he said.
He added that the failure often lies upstream from the tool: “Fields that are optional in the HRIS, definitions that differ by region or business unit, and records that look populated until someone validates them.”
Mahajan also explained that a technically strong people management platform sitting on fragmented data simply makes that fragmented information more apparent. “Teams frequently attribute any shortcomings in an analytics rollout to the platform and opt for an alternative. The second tool inherits the same data and generates the same disappointment,” said Mahajan.
The lesson for CFOs and HR leaders is that better technology isn’t the same thing as better information. Before investing, organizations need to establish what decisions they need to make, what data those decisions rely on, and whether their existing systems and processes can provide that information.
And answering those questions relies on HR and finance working together — not just when it’s time to approve a technology budget, but from the beginning of the decision-making process.
“Alignment is not HR’s responsibility alone, it needs to be a shared responsibility across the executive team,” said Dave Druzynzki, CPO at Fleetworthy. “The highest performing organizations don’t wait until the org strategy is set and then bring HR into the conversation; they build the people strategy alongside the business strategy from the start.”
Building a Better Partnership Between HR and Finance
Taken together, these statistics show why HR technology shouldn’t be treated as an isolated HR decision. The strongest, most effective investments start with a shared understanding between HR and finance, centered on:
- The problem you’re trying to solve
- The investment required
- How you’ll measure success
That means HR leaders need to approach CFOs and finance leaders using the language of business outcomes, rather than simply making the case for a particular tool or feature.
“Stop pitching feelings, start pitching numbers,” suggested Press. “Saying ‘This will boost morale’ gets a polite nod. ‘This cuts time-to-fill by three weeks and improves 12-month retention by 8%’ gets budget approved. If you want finance to say yes, speak finance.”
Press added that the strongest HR tech business cases she’s seen were never HR walking into finance's office to defend a decision they'd already made. “They were built side by side, HR bringing what they know about people, finance bringing the discipline to forecast and prove it. That partnership is the actual unlock, not the tool itself.”
That approach also means agreeing on what value looks like before the investment is made. While cost savings are a large part of building a case for HR tech, they’re not the only way to demonstrate ROI. Mahajan said HR can also make the case in operational terms.
“Although cost savings are important, meaningful ROI can also be gained by finding employees more quickly, getting them productive sooner, retaining key staff members longer, and avoiding time lost reconciling contradictory information,” said Mahajan. He added that the strongest case for investment isn’t simply that a tool provides better reporting; it’s that it allows the organization to make a specific workforce management decision faster, with better evidence and measurable consequences.
That doesn’t mean finance expects every benefit to appear as a dollar figure. Stevenson-Wright says HR teams should also consider employee engagement scores, efficiency ratios, productivity within the HR function, the quality of new hires, retention, performance management, and development outcomes. “Meaningful ROI in these cases isn't necessarily going to show up as a line item on the P&L,” she said. “These are all very relevant metrics for measuring the ROI of your HR tech stack. It may not be as intuitive because you might be inclined to think that, for a CFO, you need to just bring dollar signs. But all of these different metrics matter. Together, they tell a much more holistic story about whether the investment is actually delivering value.”
The key is to establish a baseline before implementing any new technology, so it’s easier to track the change over time. This approach also gives HR and finance a shared way to evaluate whether the investment is delivering, and to identify where things went wrong if it isn’t.
But building that kind of cross-functional partnership requires patience. Ashley Alvarado, director of people strategy at Away, emphasized that it takes time to build this kind of rapport with leaders and employees. “It doesn't happen overnight. It's years of consistently showing up as a trusted confidant, a strong thought partner, and someone who keeps people strategy aligned with business strategy.”
Make HR Tech a Shared Business Decision
For many organizations, updating HR tech has become an increasingly important investment. But simply buying new software doesn’t guarantee better outcomes. The value comes from choosing the right platform, implementing it effectively, and measuring its impact.
For CFOs and finance leaders, that means looking beyond the initial price tag and considering how HR tech can improve outcomes like performance, productivity, retention, and data-driven decision-making. For HR leaders, it means creating a business case around measurable outcomes and building a partnership with finance before making any investment.
When HR and finance combine their expertise from the start, it’s easier to make more informed decisions, set clearer expectations for success, and maximize the value of those investments over time.
For more insights into how HR teams are approaching tech investments, read the 2027 State of People Strategy Report.
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