In the late 1990s, Dave Ulrich argued that HR should stop being an administrative department and become a partner to the business. The model that grew out of his work had three parts. Business partners sat with leaders. Centers of excellence held the specialists in areas like compensation and talent. Shared services handled the transactions. For about twenty-five years, most HR functions have been organized this way.
The model fit how HR delivered. Nearly everything HR did reached employees through a person. Someone with a question found someone in HR, and that person worked it out. So the design problem was getting the right expertise into the right conversation, and Ulrich’s three parts did that well.
What’s changed is that technology is becoming the main way HR delivers. We see this most clearly at companies that are leading with AI agent process redesign and then working out what operating model the function needs as a result. Agents handle much of the routine work. People still handle the issues that matter most, because those need human judgment. But when technology becomes the main way a function delivers, you end up organizing it much the way you would organize IT.
That changes what HR produces. It used to be a service, judged on how quickly and helpfully each answer landed. Now much of it is a set of products: agents, plus the data and technology around them, judged on whether they work.
When companies actually go through this redesign, this is the model they tend to land on.
Product management
HR has its own technology group, its own data, its own designers. PMs lead the cross-functional teams, responsible for working closely with the subject matter experts to develop AI-based product.
Senior business partners
Subject matter experts
Little about these groups looks unfamiliar. What changes is that they sit further from the business and work through Product.
Global services platform
Experience
Not a fifth organization. The rule for which route each request takes, and it gets revisited as the agents improve.
Ulrich’s three parts are still there. What’s new is Product, on the left. HR gets its own product managers, technology, data, and designers, and the other parts of the function increasingly work through what Product builds.
The specialists change the most. Under Ulrich, a compensation expert designed the policy, ran the process, and took the call. Value and delivery were the same thing. Now the expert defines the standard the agent works from, alongside a product manager, and their expertise reaches every employee instead of whoever called.
Senior business partners get thinner: one per business line, working with general management on strategy, the work only a person can do. They can be thin because they pull from the specialists and from Product for nearly everything else.
Shared services becomes a global platform, increasingly automated, and owned rather than outsourced. Outsourcing made sense because the labor was cheaper elsewhere. Once the work is automated, that advantage goes away.
The last piece is experience, which is how a request reaches an answer. There are now three routes: an agent alone, a person supported by an agent, or a person using their own judgment. The important issues go to people. Experience isn’t a new department. It’s the rule for which request takes which route, and someone has to own it and revisit it as the agents improve.
The structure itself is becoming fairly clear. The hard part is getting people to align, because the roles are now different. Most people keep only part of what they used to do. A specialist who ran a process now defines the standard an agent follows. A partner who handled everything now pulls from others. Designing roles around the part that stays, while the rest moves to agents, is what makes this transition so difficult.