Does your IT team or your HR team absorb the costs of HR technology?

HR has to absorb the HR tech cost in its own budget. Every year, there will be a discussion about high priority HR tech initiatives in the short and long term. IT will advise on the cost projection and HR will include this in its budget.

In our group, the costs of HR technology are shared between IT and HR, depending on the nature of the expense. Typically, IT absorbs costs related to infrastructure, integration, licenses, and security, since these fall under our responsibility for enterprise systems. HR absorbs costs tied directly to HR-specific applications, functional requirements, and business-driven enhancements

My answer is: It depends on the organization’s operating model. Too often, the question gets narrowed down to HR systems, when the bigger issue is how the company sees IT as a whole.

Why just HR? If we’re going to talk about who pays for what, then shouldn’t we also ask the same about cybersecurity, networking, or even basic end-user support? Singling out HR misses the bigger picture.

The real difference comes down to whether IT is viewed only as a cost center. If that’s the case, then the conversation is usually about who gets stuck with the bill, and it can turn into a back-and-forth. But when IT connects its costs directly to business value, things shift. The discussion becomes less about “who pays” and more about “what do we get for what we’re spending?”

That’s where having a service catalog helps. If every department can clearly see what services are available, what they cost, and what level of quality they can expect, then they can make informed choices. HR, Finance, Operations, any of them can decide whether they want more, less, or a different level of service. And when the business needs to cut expenses, those decisions are transparent and collaborative.

So, instead of asking whether HR or IT absorbs the cost of HR technology, the better question is: does the business really understand the value of the services it’s using? When costs are clear and tied to value, IT stops being just another expense and becomes a real partner in how the business runs.

HR & IT shares the cost. Like HR covers tool licensing, subscriptions, and user-related costs & IT support costs like: Data integration, Implementation & Security.

HR team as all business units have their own budget.

IT delivers technology for HR, but HR pays for it.