Today, the huge Glendale, California-based holding company—which operates four major divisions, including Nestle Beverage Co. and Nestle Brands Foodservice Inc.—is converting all 23,000 U.S. employees' payroll to a single system. That should save time and money, and allow HR to play a far more strategic role in running the organization. Instead of running and maintaining dozens of different systems that only allow reporting at the local level, client/server technology is creating new opportunities to manage information enterprisewide.
That's if Benson can hold onto the fiber-optic reigns. There are database servers to worry about and network configurations to fret over. There's relational database software to manage and desktop PCs to monitor. There are applications to run and people to train. And, most important of all, there's work to get done—lots and lots of work. Adds Benson: "If you want a client/server system to function to its potential, you have to spend a lot of time managing it and examining the way you do work. There's no point in migrating to client/server from a mainframe if you aren't committed to overseeing it and changing the actual work processes."
Over the last five years, the words client/server have drifted into the lexicon of human resources departments like Benson's. And for good reason. These sophisticated computing systems, which are a step up from network systems, have allowed HR and other corporate fiefdoms to use PCs to process work more quickly and effectively than ever before. They can eliminate dreaded paper shuffling and much of the other administrivia that can sink an enterprise. Today, client/server drives systems handling payroll, benefits, administration and more. It can link computers and software companywide, while automating data exchange in ways that can astound the savviest HRIS consumer.
Today's leading-edge HR systems are based largely on client/server technology. Among them: kiosks and interactive voice-response systems that allow employees to update their own records; internal "Web" sites that allow HR to distribute directories, benefits information and many other data; and highly automated workflow software that automatically routes proposals and hiring requests through the company's chain of command. "Client/server offers tremendous functionalism and power," says Barry Hall, a senior consultant at the San Francisco office of Coopers and Lybrand LLP.
That may be true. Many companies that have embraced the technology have realized gains they could never have imagined just a few years ago. But if the information revolution has proven one thing, it's that gain usually doesn't come without some pain. For every organization that gets it right, at least a half-dozen others find themselves floundering in a sea of digital distress. Too often, client/ server systems fail to achieve their promise, and ultimately devour huge chunks of money and time. If they aren't properly designed and configured, they can slow data processing down to glacial proportions. Monitoring data flow and tackling the logistics of data distribution falls somewhere between science and art. And then there's security. Although it's important to provide the necessary data for people to do their jobs, it's crucial to ensure that critical information doesn't fall into the wrong hands.
"Client/server can offer huge benefits over legacy computing environments. There's no question that it offers greater flexibility, easier access to information, and it often saves money and resources at an enterprisewide level. But one of the benefits—unfortunately—isn't manageability," says James Greene, a market analyst for Summit Strategy Inc., a Boston-based consulting firm specializing in client/server systems. "Client/ server is difficult and complex. It demands a lot of attention."
Adds Rick Martin, principal of Atavista Associates, a Washington, D.C.-based consulting firm specializing in client/server architecture: "Organizations using client/server successfully realize it won't solve the business problem du jour. It's a tool for driving a fundamental change in thinking about work processes. Unless you're willing to reengineer work to fit the computing model, you're simply automating all the inefficiencies of the past, and you're probably better off sticking with the legacy system."
In fact, the difficulty in converting to client/server is causing many HRIS managers to pause. A study conducted by Sentry Market Research, part of Sentry Publishing Company Inc. in Westboro, Massachusetts, recently found that approximately three-quarters of Fortune 1000 companies have slowed their efforts to convert to client/server systems—mostly because of hardware, software and network problems. As Ray Giemza, director of HR projects at the Carolina Power and Light (CP&L) company in Raleigh, North Carolina, puts it: "Managing a transition to client/ server is a complex and demanding task, involving long-term strategy."
Client/server requires a change in mindset.
The legacy environment with its mainframe computers and thick-walled IS department has always demanded centralized control. There was never any question where information resided and who was in charge of distributing it. You requested a report, and a week to 10 days later you received it from IS. Under that computing model, various departments within a company—personnel, accounting and marketing, for example—operated as separate data islands. It was difficult, if not impossible, for the IS department, and the entire organization to know exactly what was going on elsewhere in the company at any given moment. And trying to piece together data from various departments to see the big picture was a challenge that few companies could successfully tackle.
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Client/server has changed all that—at least in theory. It's more than a network: "It's one of the most complex systems the human race has ever created," says Martin. When configured properly, it allows workers to tap into data from across the hall or across the world almost instantly. By storing a huge database on a server—a powerful workstation, minicomputer or mainframe—and using a powerful relational database program that can retrieve and sort data with lightning-fast efficiency, the end user at the desktop (the client), can grab information and plug it into his or her PC. Using a spreadsheet, reporting tool or other application, it's possible to generate reports and analyze business developments. What's more, data can be added or altered from the client desktop PC, and the companywide database instantly will reflect those changes. But the capabilities don't stop there. So called smart agents, highly specialized applets (tiny codes or applications) of software, can route messages and data through a chain of command automatically. Once an individual has approved a transfer, promotion or whatever, the system can forward the electronic document to the next person until the task is completed.
And that's only part of the allure. Client/server dispenses with arcane codes and mind-boggling procedures associated with batch processing and mainframe computers. So-called second-generation systems provide a standard graphical interface, such as Microsoft Windows, which provides a common look among applications and usually translates into increased productivity. And some of the more advanced HRMS applications can interface with a wide range of database formats and hardware platforms, including DB2, Oracle, Rdb, Microsoft SQL (structured query language) Server and Sybase SQL Server. There's no need to know how data resides in the database in order to to use it. And, unlike host-based systems that limit users to accessing a single program at a time, client/ server allows multi-tasking on several applications. "Users can define the specific programs and environments that work for them," says Rick Bergquist, vice president of technology for Pleasanton, California-based PeopleSoft Inc.
Client/server has its advantages. Ken Ward, manager of employee services at BP Oil of Cleveland, Ohio, realized that in 1993. As the oil industry endured an ongoing slump, the 30,000-employee organization began looking for ways to create greater efficiency and lower its costs. "We had to find a way to continue to do business with fewer people and eliminate an IT setup that was a debacle," he explains. At the time, BP Oil had PCs scattered across the company—all running different operating systems and applications. Few PCs were networked, and exchanging data was nothing less than a "nightmare." Individual users often had outdated and invalid data on their systems, while redundant data clogged hard drives organizationwide.
Today, BP Oil is a far more streamlined company. The firm has cut staff by a whopping 50%. The HR department alone has reduced its headcount from 70 in 1994 to 26 today—resulting in a cost savings of approximately $2.5 million a year. Yet, despite the cutbacks, it has assumed additional responsibilities, including overseeing benefits, compliance and reporting for all of the current 16,000 employees. Not only are HR employees able to query the database on their own, they're able to handle virtually any function and field any phone call because their PeopleSoft system makes data so easily available within the universes of payroll, benefits and pension. The client/server system has crumbled walls. "We have an integrated workforce built around a totally integrated database. It has allowed us to completely reengineer operations," Ward explains.
How did the company sidestep the land mines so common to client/server technology and manage the transition? After identifying that the client/server architecture would indeed provide the flexibility and customization the company needed, the firm settled on the UNIX operating system running an Oracle relational database. Ward's staff then began searching for an HR software application that could replace the quiltwork of systems that had piled up over the years. That led BP Oil to choose PeopleSoft, which could provide an enterprisewide solution. Finally, when it came to hardware, Ward surmised that industry standard architecture, in this case Pentium servers, would reduce costs without sacrificing computing power.
A team comprised of six in-house HR people and another six outside consultants sorted through the issues and made decisions about how the company would proceed. Together, they bridged the gap between the technical and practical concerns of installing a client/server system. "We didn't allow anyone to get too comfortable and stay with their strong suit. We forced people to cross boundaries both ways," says Ward. "In the end, the [in-house HR] people gained a good deal of technical literacy, and the technical folks understood the day-to-day realities of running our employee services department." Flatter and fully integrated, BP Oil now moves data with lightning speed. "We essentially have no boundaries," says Ward.
Switching to client/server requires a strategic approach.
Weaving systems and databases together seamlessly is the key to designing a successful client/server architecture. "The goal is to link all the different islands of a corporation into a cohesive archipelago. At that point, it's possible to transform data into knowledge," asserts Greene. That's easier said than done. One of the biggest logjams typically takes place at the network level. A slow system, or one prone to errors, can prove disastrous. "As organizations grow and convert to client/ server, they inevitably run into performance problems. At some point, the network gets overtaxed," says Martin.
The problem is predictable. It's avoidable, but it continues to take place. "Because many network administrators are severely overworked, they wind up in a firefighting mode," Martin continues. "Instead of collecting data and analyzing performance, they become overwhelmed with just trying to solve [daily] problems. They aren't able to see the overall picture of how the network should be configured from a hardware or software standpoint."
Martin believes any modern local- or wide-area network can function well under client/server. The key, he says, is to recognize the networking protocol that works best in an organization, and stick to industry standards. "The more mainstream the system, the more choices for software. Proprietary systems can create enormous roadblocks that can compromise the functionalism of the entire organization." The story essentially is the same for the relational databases that drive client/server architecture. The greater the compatibility with a wide range of hardware and software configurations, the more powerful the computing environment and the more you can do. Fortunately, most of today's back-end database programs are very compatible.
That's not necessarily the case when it comes to application software. Traditionally, software vendors have offered little integration and compatibility among programs. That's beginning to change, but trying to mix and match packages from different vendors can test the patience of even the most experienced HRIS personnel. "Most organizations lack the resources and expertise to patch different pieces of vendor-supplied software together and make it all work," insists Sidney Diamond, principal of Diamond and Associates, a Stevenson, Maryland-based IT consulting firm. Although a few companies, such as PeopleSoft, have begun to address the problem and now offer integrated suites of programs, it's still a bit like conquering the wild frontier. "A preference to run different products from different vendors is likely to generate integration problems," he says.
Individual software packages have improved, to be sure. PeopleSoft's programs can link to virtually any relational database, as well as workflow solutions from vendors such as Edify, Lotus and Action Technologies. The firm also offers a tool set that enables users to customize the application as needed. If an HR department needs to add a field to an employee stock-purchase plan database, for example, it doesn't require any programming of code or knowledge of SQL. It's possible to make changes using the object-based tools that come with the program. HRMS programs from companies such as Dun & Bradstreet and Spectrum Human Resource System Corp. also offer increased levels of integration.
And then there's the knotty issue of determining just how much computing should take place on the client, and how much on the server. Finding the right balance is no simple feat. In many cases, a company can save money by distributing the bulk of the workload onto back-end servers and opting for a leaner configuration on desktops. "If you look at economies of scale, it's a lot less costly to buy and support three or four high-power servers than to buy 1,000 new desktop PCs. The PCs can get by with less than top-of-the-line performance for most applications," says Diamond.
However, leaner isn't always better. Leaving end users with underpowered machines can defeat the purpose of a client/server system. As PC performance gets sluggish, it becomes nearly impossible, to analyze data using a spreadsheet or HRMS program at the desktop. In fact, some software vendors produce programs that are so client-fat that anything less than a Pentium-class machine with 16 MB of memory is likely to choke. Such a model can also cause other problems, including difficulty switching applications at a later date and getting stuck with a program that demands increased computing power with each version upgrade.
Not surprisingly, the incredible flexibility of client/server can also become its Achilles heel. Often, companies are overwhelmed with choices—and problems. "If you have complaints about speed or functionalism, and you upgrade a server or load the newest version of software without considering the effects companywide, you can wind up with different configurations and, ultimately, roadblocks that prevent smooth data flow," Diamond explains. "Each department or user community might have great systems and terrific software based on its individual preferences, but you suddenly find yourself [mired] in incompatibilities."
It can be a nettlesome problem. A lack of standardization can also boost maintenance costs and increase the likelihood of system failures—all while increasing security risks. Although some organizations are able to succeed with a build-as-you-go philosophy, they're clearly fighting the current. A migratory approach rarely works. Says Diamond: "Those who try to build a client/ server system from the bottom up usually find themselves buried in problems."
Hitting digital pay dirt means first understanding what the technology is capable of—and what it isn't.
When Nestle began to move to client/server in 1994, HRMS director Benson knew that standardization was crucial. The company's longstanding practice of allowing every division to create its own home-grown system had fueled inefficiency and high costs. So, he focused on installing a single HRMS payroll system enterprisewide—part of an ongoing effort to create a corporate client/server system to handle a wide range of services, including pension, recruitment and benefits administration. The architecture is open and scalable. And, when completed in 1997, it will include sophisticated workflow software that will automate many HR practices. "Workflow will allow HR to save time and improve the integrity of information. There will be a lot less shuffling of paperwork," says Benson.
Nestle doesn't plan to lay off workers because of the new system, but gains in efficiency will allow the company to redeploy employees and use them more effectively. Process reengineering, says Benson, is a natural outcome of the technology. Nevertheless, the big advantage of client/server isn't always cost savings—though many companies do realize a gain. Often, the initial outlay for the equipment and the labor involved in setting up the entire infrastructure can far exceed the cost of using a legacy system, he says. "The big gain is at the enterprise level and over a period of time. Client/ server drives strategic improvement."
Few would disagree with that. According to Cooper and Lybrand's Hall, client/server systems cost approximately $10,000 per desktop annually to operate. On average, legacy systems using a mainframe cost an estimated $3,000 to $4,000 per desktop each year. Client/server also can hike training costs as employees learn new operating systems and new application software. And because the price tag for running client/server architecture is largely pushed out to the actual department rather than IS, corporate computing costs are entirely redistributed. A particular department might spend more money to run the client/server system, but the enterprise can actually save money by eliminating work and unnecessary jobs. "A lot of advantages and gains don't show up on the ledger sheet," says Hall.
That's an important point, and one that cuts to the very heart of the client/server model. "The problem for many companies is that they embrace client/ server because they have heard all about what it can do, but they're not really sure what they want to accomplish in the first place," says Martin. "They wind up putting a lot of capabilities at the desktop, but they don't effectively harness the power. An employee might have the capability to be 100% more efficient, but if the work processes haven't been changed to take advantage of the situation, there will be little or no gain." If that's the case, he says, it's simpler and less expensive to stick with a host-based system. He adds: "A key problem is that many firms don't recognize the relationship between client/server and reengineering. They don't realize it's an opportunity for organizational change."
Carolina Power and Light is one company that recognized this fact early on. When it began the move to client/server from an old mainframe system, management established several reengineering and implementation teams to take advantage of the change in business processes that soon would be possible. According to Don Tew, systems project manager, the company recruited both technical and nontechnical experts for defining the new technology and the new processes. While a steering committee watched over the transition, a design lab and project team handled the day-to-day issues. The latter tapped into the knowledge of HR, payroll, IS, accounting and other departments. All the while, outside consultants and an implementation partner provided expertise the organization knew it lacked. "The idea, overall, was to bridge the chasm and make sure senior management understood the processes we were tampering with, and that the organization was following senior management's vision," says Giemza, who led HR's involvement.
CP&L also conducted a study to determine how best to align reengineering with the new computer system. When the company shifted its payroll system from mainframe to client/ server last January—after spending about six months working out the details and laying out the framework—it took place without a digital hiccup. Later this year, the utility company will convert other systems, including benefits administration, to client/ server. "We're moving forward aggressively, but cautiously. Managing a new client/server system is all-consuming," says Tew.
Of course, not every company has the luxury of installing an entirely new computing environment. In many cases, it's necessary to use legacy systems in conjunction with client/server architecture. In fact, the Sentry Market Research study found that corporations typically have several operating systems, hardware configurations and database management programs running simultaneously. That, combined with the complexity of the client/server environment in general, and recent indecision over running Windows NT or Windows 95 as the operating system of choice, has led to confusion and forced firms to slow implementation.
Heap atop all that the fact that it's sometimes preferable to use a mixture of different servers, database tools and application software because of differing needs for data warehousing and communications, and it's a wonder that the typical HRIS manager isn't paralyzed by indecision. Believe it or not, the most expensive hardware isn't necessarily the costliest, and the highest performance equipment isn't necessarily the best. "The enterprise and HRIS really has to look at the big picture. It's important to understand how everything works together," says Hall. Although many HRIS departments estimate making the conversion from a mainframe to client/server in four to six months, a complete transition can take three to four years.
Despite complexity and complications, many companies are finding that the road to client/server is paved with rewards. It's helping streamline organizations in ways that no one could have imagined a few years ago, and it's allowing HR to play a far more strategic role in defining the future of the enterprise through freed-up time and ease of data transference. As the layers of bureaucracy and inefficiency are peeled away, organizations are squeezing out bigger profits and providing better service—to customers and to employees. "If you get it right, client/server is truly revolutionary," says BP Oil's Ward.
Indeed, as employee evaluations, compensation, recruiting, hiring and benefits issues have grown infinitely more complex, client/server has allowed HR to shift away from a transactional mode to embrace a more strategic model. Says Martin: "Client/server is still relatively new, and it's only beginning to mature. But it has already proven it's the computing environment for the present and the future. It allows a synergistic relationship to flourish between technology and work. It provides the tool for companies to realize significant competitive advantage. But real gain doesn't happen on its own. Client/server succeeds only if it's effectively and intelligently managed."
Personnel Journal, May 1996, Vol. 75, No. 5, pp. 90-98.