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How The Web Will Change the Structure of HR

May 18, 2001
Related Topics: Human Resources Management Systems (HRMS/HRIS), Internet, Featured Article
Here's a look at HR's technological journey from ERP to Web,and how ultimately the Web could change how Human Resources itself is configuredin an organization:

Portals and the Web
    Today's new browser-based HR portal technologies, with point-and-click easeof use, mixing text, data, and video, are changing the way we manage humanresources. These technologies are the new vehicles by which critical informationabout people is now captured, edited, stored and retrieved, and shared withothers who need that information.

    Managers and employees can now directly access this information and makeon-the-spot decisions about employment, development and pay without involvingthe HR function, and without using antiquated paper-based processes. Thisinformation sharing also takes place between systems, new or legacy, whetherit's via the Internet, corporate intranet, or extranets, and puts a premium ondata structures.

    The biggest development over the past several years on the technology front,enabling this direct employee access, is the Web-based HR Information Portal. AHR Information Portal is a set of applications that provide users a singlegateway to customized and personalized information. These portals bring togetherinformation both from sources within the organization and outside theenterprise.

    They are also the underpinnings of the new "HR Store" ande-commerce HR, where employees can directly shop for discount travel, homemortgages, and other items such as child care and elder care.

    But even more significant is the ability to use Web-based applicationsthrough HR Portals for knowledge management, organizational learning, anddistance training. Companies are now combining classroom teaching with otherlearning forms such as real work projects and knowledge databases using theInternet as a delivery channel. Individualized instruction programs can now bemade available anyplace, and at any time.

    This description of cutting edge Web-based HR all starts with access to aWeb-based HR home page, which brings together a company's plans and programs forthe user.

    These HR home pages and their links represent the end products of a HRstrategic technology planning and transformation process. The transformationprocess integrates the various components of HR service delivery fordramatically improved ease of customer use and lower overall cost, compared withearlier HR technology systems.

    Along with Web technologies, employee self-service is another basic idea thatmakes possible the new HR Portals. Although self-service does not necessarilyrequire HR Portal or Web technology, they greatly enhance its capability.

    Self-service enables employees and managers to directly access theirinformation for decision-making and make updates to their data from their PCs orworkstations. This capability is especially useful for dealing with complex HRtransactions such as career planning, retirement calculations, handling openenrollment, and stock options.


History of HR information systems
    In the early 1990s client/server systems became the ideal configuration formost companies, and they began the somewhat arduous task of migrating theirlegacy systems to these new packages designed under the more advanced structure.

    They offered advantages in functionality, storage capacity, performance, andlook and feel to the users, and gave the companies an opportunity to re-engineerand streamline their HR processes at the same time.

    Re-engineering in the early 1990s was all the rage since it was based uponmany of the same principles and ideas as the quality initiatives, which provedso successful in the manufacturing and supply chain areas. The plan was to applythose quality techniques to the HR area. So the approach, strongly backed by theIS professionals as well as the HR folks, was to redesign the HR processesbefore they put in the new technology.

    In that way they would fit the new technology to the new process and not haveto change it later. It seemed to make great sense, and the newer client/serverproducts were marketed with this in mind. In fact, another initiative in thesystems world was contributing to this thinking as well: Enterprise ResourcePlanning (ERP) systems.

    Most companies were dealing with an increasing number of systems that werebuilt with inherent differences while the maintenance and upkeep of them wasabsorbing an inordinate amount of the IS resources, people and money.

    The systems had different software languages, hardware platforms, and datastructures, and perhaps the time had come to replace most if not all of theseseparate computer-based systems with a single suite of integrated applicationsand modules.

    These new ERP systems were designed and built to work in harmony; with asingle set of databases; and common processes and standards, which would applythroughout the enterprise. Leading the pack were global software vendors such asSAP, PeopleSoft, Oracle, Lawson, and Baan who expanded their client/serverproduct lines to compete in this market. They offered applications in all majorareas of business including manufacturing, purchasing, logistics, finance, andHR.

    So the HR and IT departments thought it made perfect sense to abandon theolder HR systems they had been using and to move to the newer products andre-engineer their processes at the same time.

    However, history tells us it did not quite work out as planned. Thecomplexities of business are such that tackling a full-scale ERP project for amid-sized or large organization was a massive undertaking, affecting almostevery department's work, and requiring dedicated resources from user departmentsand IS far beyond anything they had tried before.

    Many companies are still in the midst of determining how far they want to gowith this effort since they are enormously expensive and time consuming. Also,the HR modules are usually somewhere down the priority list, since themanufacturing and logistics processes usually go in first. Many HR modules arestill being implemented; thus, many ERP projects may never get to work on the HRneeds.

    Even where HR was able to acquire a client/server product and install it as asingle project, not connected with an ERP initiative, the road has not beensmooth. It turns out that there are so many processes and sub-processes to workon in HR, that the projects were being delayed for years while process teamstried to figure out how they wanted the processes to be handled with the newtechnology.

    Many companies abandoned the re-engineering work and moved on to installing a"plain vanilla" HR system. For some companies who were able to fighttheir way through the development and implementation phases, with or withoutre-engineering, it often took years and millions of dollars to do so.

    This was far beyond what the companies thought it would take at the start,and often these projects were so costly that any benefit from the implementationwas gone. The client/server toolkits, promised to be easy-to-use by HR novicesbecame complex. The software programs, applications, and databases that comprisethe systems turned out to be extremely difficult to load, modify, and put intoproduction. Not that this was all the fault of the software companies.

    Users demanded more functionality in the products before they would buy them,and legislation and compliance demands grew over the years. The combined effectthough of the complexities and unsatisfactory track record of lots of goodcompanies was enough to put fear into almost any IS manager's heart. As aresult, many companies have halted their plans to install such systems.


Web-based systems to the rescue
    With this brief history, we can see more clearly why the Web-based technologyappears so attractive. Implementation times for applications run in weeks ormonths, not years. The systems are visually appealing and XML, HTML, VisualBasic and SQL logic is fairly easy to understand.

    But Web-based systems cannot easily replace all HR systems' functionality,and still are not equipped to fully replace the complex nature of HR processing,such as a multi-state payroll system. Therefore organizations still must spendsignificant sums to maintain and upgrade legacy HR applications until technologyfinds replacements cost-effective. But companies are exploring alternatives tocostly client/server ERP projects and are finding some answers.

    Some question if, at the end of the day, this Web and HR Portal technologyhas really helped the HR function, employees and managers, all that much. Weband HR Portal technology are dramatic advances not because of the technology,but because the Web has been integrated with self-service, HR services centersand other Web applications.

    As a result, the services available to employees are much more advanced thenever before. So from a customer service and usage standpoint, HR Portals are abig step forward.

    From an implementation point of view as well, Web-based systems are easier tobuild and implement, and the major vendors have now expanded their ERP productlines to include these capabilities, putting themselves in a better position tocompete with the vendors of Web solutions.

    Using this technology for decision making purposes, sharing data, andperforming routine transactions will grow dramatically in the years ahead andperhaps be as important as the telephone as a communication device as bandwidthgrows.

    It's easy-to-use, can-handle multi-media, is accessible virtually anywhereand is relatively inexpensive. Difficulties in security have been overcome withfirewalls and encryption. Most companies are using their corporate Web sites toadvertise jobs, collect resumes, complete employee and manager transactions,including accessing sensitive data over the Internet, not just the corporateintranet.

    This means that technology is finally reaching the end users faster, and alsodirectly, without intermediate or derivative applications. The employees andmanagers are the targeted users and the systems are not just being used as atool to help the HR function, with a side benefit for the others.


The new HR department
    Due to the impact of these technologies and fundamental business changes, theHuman Resources Department, as we know it, is gone. No longer do we have asingle group of people where you can find out all about the benefit plans,salary programs, and career opportunities in a company.

    Today's companies are simply too diverse in terms of their products andservices, and global reach, to be able to operate under a common set of HRprograms, administered locally, the way organizations were able to in the past.And with this business diversity came a bewildering array of new compensationand plans, training and development programs, union agreements, and relocationpolicies to contend with-just to mention a few.

    Another large influence on HR complexities is a growing scarcity of skilledworkers, especially the "knowledge" worker. These people, able tounderstand and build the systems of the future, demand a changedemployer-employee relationship.

    Pension plans based on working for one company for 40 years no longer havemuch appeal. And authoritarian management styles, outdated compensation plans,and overly strict employment arrangements didn't fit the needs of the youngercomputer-literate workforce either.

    Management challenged the very relevance of the HR function itself, as wellas the HR programs offered. No wonder then that traditional HR plans andprograms, and the traditional HR function, found themselves obsolete.

    What we are dealing with now in most companies is a HR function undergoingprofound transformation to adopt a new mode of operation: The ability to offerindividualized HR plans and programs to each employee.

    HR plans and programs need to be streamlined, tailored and packaged to meetthe specific needs of each employee, similar in concept to the customer-drivenmodel that businesses have adopted. And, using the latest HR Portal technologywill deliver and administer these in a self-service mode since it enables fasterindividualized service at much lower cost. In sum, the HR function isdramatically changing its focus on several fronts.

New Technology Transforming HR

From: To:
Local Global
Administration Self-Service
Internal programs Outsourcing
Transactions Business information
Employer-oriented plans Individualized employee/manager plans

    It must be remembered that today's Human Resources departments are stillrequired to deliver a myriad of plans and services to the managers and employeesof an organization, and beyond those groups to their dependents, as well as toretirees and applicants for employment.

    Further, these plans are required to comply with legal regulations andcontractual agreements.

    The number of such HR plans and programs that need to be administered cover awide range of subjects such as:

  • Health and Welfare plans -- including STD, LTD

  • Pension and investment plans

  • Compensation -- salary administration, bonus and incentive plans

  • Payroll administration

  • Expatriate administration

  • Performance appraisal

  • Separations

  • Diversity and EEO/Affirmative Action Compliance

  • Training and education

  • Employee communications

  • Employee development

  • Management development

  • Employee relations

  • Organizational effectiveness

  • Succession planning

  • Labor relations

  • Recruiting and sourcing

  • Safety and environmental health

  • Transfer and relocation

  • Executive resources

    The challenge is in how to enable HR to deliver Web-based plans in acost-effective manner. And shifting the work while it is ongoing is not easy,since the plans must be continually administered in an efficient manner; theplans themselves change due to changes in regulations and plan design; and thetechnologies are always evolving.

    So merely having a desire to improve and a vision for how to use technologyto handle some of the work is not sufficient. We need well thought-outmethodologies on how to bring about successful change.


The new model for HR service delivery
    At the center of the interaction with the technology is the Web-enabled HRPortal and self-service network, which will be the gateway through which thetransactions that involve access to the human resources information databasesystem, and well as with other major internal and external systems.

    Also prominent in the delivery picture is the Human Resources Service Center,which handles day-to-day inquiries from employees and managers regarding plans,policies, as well as specific questions around such issues as compensation, openjobs, payroll and benefits.

    In the future, it is envisioned that such service centers will also be usedto handle deeper management inquiries such as those involving performancemanagement and staffing, whereas today those interactions are best handled bythe HR business partner.

    The HR work itself within the new model gets redesigned and repackaged intothree basic types, and the allocation will change depending upon where the workis performed. The three types of work and new roles for the HR staff in the newmodel would be as follows:

Strategic partnering with the line businesses

  • At a leadership and senior level
  • At the local, generalist level

Centers of expertise housing the required HR functional specialists

  • Can be centralized or localized

Service center administration

  • Centralized.

    For some of the current HR staff, the work after "E-Engineering"will remain mostly the same if they were involved in the work before thetransformation. Primarily this is the work of HR strategists, policy makers, andgeneralists. But this will be a minority of the HR workers. Most will find thattheir work has been altered in some fashion.

    Some will find that the work they were doing has been shifted to technologyand can now be handled through the Portal or self-service, or the work has beenoutsourced to a vendor. Perhaps it will have been physically transferred toanother site in the country or region, or out of the country altogether. Whereonce they were the focal point for the activity, they may no longer be. Thatcomponent of their work will be gone.

    Some of the HR specialists will move into centers of excellence units,perhaps within a shared service organization.


Professional HR staff impact
    The following is an outline of the positive impacts on several of the HRroles under the new HR Model:

  1. HR vice president and senior managers

    • Implement new HR plans and programs quicker.

    • Develop new service delivery pathways with vendors and suppliers.

    • Permit faster access of information to customers.

    • Ability to develop standard HR programs and processes and deploy themquicker and at less cost.

    • Ability to access meaningful HR enterprise-wide business information onproductivity measures, key dashboard data, and process results.

    • Provide a key component for developing a best-in-class HR organization.

    • Focus on growing and developing organizational strength across businessunits and geography.

  2. HR business partners and consultants

    • Ability to quickly and easily provide senior business managers withinformation about their entire organization, regardless of organization orbusiness boundaries.

    • Ability to respond quickly to line management and customer needs.

    • Ability to standardize and monitor programs/processes within businessunits (if not enterprise wide).

    • The focus shifts to value added work from transactional-based work.

  3. HR directors and HR business heads

    • HR business resources will be able to spend time on business issues andactivities, not supporting corporate activities that might be distractions.

    • Access to other HR systems resources whether global and regional HR whenneeded.

    • Access to expertise located in centers of excellence.

    • Access to specialty resources and solutions (e.g. automated applicationssuch as those provided by Oracle, PeopleSoft, SAP, Synergy, Aspect, Resumix,Restrac etc.)

    • Use of common tools and systems will reduce maintenance and support costs.

    • The focus shifts to value added work from transactional-based work.

  4. HR functional specialists

    • Ability to standardize and deliver HR programs and processes faster and atless cost.

    • Access to global and regional HR systems resources when needed.

    • Access to expertise located in centers of excellence.

    • Access to specialty resources and solutions.

    • Use of common tools and systems will reduce maintenance and support costs.

    • The focus shifts to value-added work from transactional-based work.

    Essential to this model is that the key HR staffs within the business groups,and the corporate and regional offices work in close contact with seniormanagement to help ensure that the HR plans, programs and the delivery ofservices are aligned with the overall business objectives.

    Other changes to the work will take place as well. With the growth ofoutsourcing and the introduction of shared services units, it becomes necessaryto reexamine supplier activities that could be managed centrally or regionally.Also with the HR work now redesigned, a new role that of handling more complexemployee inquiry tasks has taken shape. And, all are dependent upon technologywhere there will be new jobs as well.


New vendor manager role
    A role that is still emerging is HR vendor management. The purpose of thisrole is to oversee the growing list of outside suppliers to HR and including thevarious contracts and service level agreements (SLAs) that have been signed andput into place.

    Here is where the process measurements are key, since many of the vendors arenow monitored by such metrics. Many if not all areas of HR could potentially beoutsourced, with such areas as payroll, staffing, relocation, benefits anddisability management, HR service centers, and HRIS operations among those mostlikely affected.


Customer service representatives' key new role
    The HR Customer Service Representative handles a wide range of inquiries fromthe various groups they support; employees, retirees, managers, and outsidesuppliers and vendors. They are trained to either handle the incoming callsand/or e-mails directly, or to walk the customer through the transaction on thespot.

    They have access to a HR database, applicable policies and practices througha knowledge base, and a case management tool. Whatever they need to enable themto perform their job within reason is provided. Appropriate time for follow-upand completed documentation regarding the transaction is built into theposition.


Expanded HR technology positions crucial
    Technology is the underlying foundation upon which the new HR organizationwill operate. The traditional HRIS positions such as analysts, programmers,database administrators, will be needed, as well as telecommunicationsspecialists, LAN, PC, and Web specialists who develop, maintain and keep securethe various HR, payroll and benefit systems.

    These roles will continue to be shared with the Information Technologyorganization.

    However, several new technology roles have been added to help bring about thenew HR model. These include:

  • A knowledge base specialist is required to build and maintain the neededpolicies, practices and procedures to support the employee and manager selfservice initiatives in a way that allows employees and HR staff to access theapplications via the Portal or service center in the appropriate manner.

  • An overall HR Information Manager who will establish and maintain with theSubject Matter Experts the standard definitions, usage, access privileges, andprivacy rules for all HR data elements.

  • Service center technologists who will deal with supplying data to theshared services unit, handling case management systems, CTIs, call-pathing, etcand tying that unit to the HR Portal and other HR functional units.

  • Portal communication specialists who build and maintain the Portals andWeb sites, who create and transmit the important HR information messages andcontent to the various groups relating to ongoing activities and the changemanagement programs.

  • Enterprise data mining and Data Mart experts to build and support neededtemplates and information sets of HR and mixed HR/business and productivity datafor managers and HR users.

  • Field systems analysts, including global and regional representation, todefine the needed local and regional HR data needs and to support the users intheir locales.

  • E-Engineering analyst and Business Process Redesign (BPR) consultingcapability to integrate and streamline work processes to maximize both costsavings and the power of technology through the Web, workflow, and self-serviceand collaborative transaction systems.

  • A quality control and measurements capability to maintain the desiredlevel of data cleansing, accuracy, and customer service.

    The incumbents in the new global roles and positions must be able to dealwith the varying levels of technical sophistication found in other countries aswell as the various legal and privacy regulations that apply. Certainly thesechanges demand new competencies for the HR staff to fulfill their new roles.

    In the future there will be an increased emphasis placed on interpersonalskills, consulting skills, "pure" HR functional knowledge, businesssavvy, and technology. Global awareness and experience will be at a premium.


    The emergence of HR Portals and self-service technologies has created a majornew opportunity for the HR function. With these solutions, and theRe-Engineering and E-Engineering methodologies that go hand in hand with them,organizations can at last alter the HR structure and roles to provide moresupport to the line businesses; reduce HR delivery costs; and develop new andexciting services for its customers.

    At the same time HR can give them more personalized plans and programs.Organizations moving to the new model of operation will have a strongcompetitive advantage since they provide new business information to managers,reposition HR professionals to build more productive workforces, and unleashpowerful new tools to increase learning and education.

From Web-Based Human Resources by Alfred Walker.Copyright © 2001 byMcGraw-Hill Companies, Inc. Reprinted by permission of The McGraw-Hill Compamies,Inc. All rights reserved.

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