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Finding Time To Be Strategic

October 1, 1996
Related Topics: Intranets/Extranets, Human Resources Management Systems (HRMS/HRIS), Strategic Planning, Featured Article
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Over the last few years, Joe Da Via has heard the reengineering mantra repeated more times than he'd care to recall. It's in the literature, it's at conferences, and it's part of the collective psyche of the corporate bean counters. So about a year ago, when the human resources manager began exploring ways to engineer greater efficiency into operations at W.H. Brady Co., a Milwaukee-based manufacturer of identification products such as signs, labels, tapes and software, he saw himself staring down the barrel of a fully loaded project that was going to cost hundreds of thousands of dollars and provide only marginal benefits.

That's until he discovered the fastest route to HR reengineering was through employee self-service. By deploying interactive voice response (IVR), kiosk and PC-based systems that would allow workers to retrieve and update their own records, choose benefits and make changes to their 401(k) plans, he realized he could crumple many of the inefficiencies of telephones, paper and pencils. As a result, the company, which racked up $315 million in sales in 1995 and has 2,400 employees worldwide, could slash a couple hundred thousand dollars a year from its HR budget alone. More importantly, "It puts the responsibility for data where it should reside, in the employee's hands. And that allows human resources to become much more of a strategic player in the organization," he explains.

End the paper trail.
Employee self-service is more than a trend. It's one of the most significant changes sweeping through the corporate world. And few departments are as big a beneficiary as human resources. Although the idea of employee self-service has existed for more than a decade—interactive voice-response systems and kiosks have allowed employees to take ownership of their own data—the technology now is ushering in a wide range of self-service applications, including open enrollment and benefits plan selection, internal job placement and skills inventories. Sophisticated client/ server computing systems and the emergence of corporate intranets are further automating workflow and driving fundamental changes within human resources departments. They're eliminating the need to print material and field an endless stream of phone calls.

At W.H. Brady, for example, there's no longer a need to hire entry-level HR personnel to handle administrative and clerical duties. Computers eliminate virtually all the paperwork. When the department does hire new employees, says Da Via, they're mid-career professionals who can provide analytical and consulting expertise—"people who are better equipped to find solutions and create greater efficiencies." The net result? An HR department that's shrinking by five to 10 employees a year, while playing a growing role in corporate affairs.

The story is much the same at thousands of other companies. "A lot of organizations suddenly are realizing that employee self-service can pay huge dividends, and that it's a higher priority than outsourcing, reengineering or installing new HRMS systems," says Joel Lapointe, Chairman and founder of ESSENSE Systems Inc. of Peabody, Massachusetts, a pioneer and leading vendor in the self-service arena. The reason is simple: "Self-service technology can automatically drive changes in these other areas and directly lead to improvements," he says.

The popularity of self-service isn't difficult to understand. Because employees control approximately 70% of HR data—names, addresses, dependents, benefits selections and 401(k) selections, to name a few—it clearly makes sense to shift the responsibility for maintaining accurate records to them. After all, who knows better than an employee how to spell a child's name or enter a new address? Self-service also is valuable for handling basic queries, often referred to as FAQs (frequently asked questions). But these days with so many choices, choosing the right mix of technologies is no simple task. "The system must be accessible to employees, be easy to use, and it has to work as advertised. Without the proper hardware, software and implementation, the entire system can become cumbersome and frustrating to use. It can create problems instead of eliminating them," says Debby Love-Sudduth, a Santa Clara, California-based consultant for the Hunter Group, which helps companies sort through the maze of self-service technologies.

Employees make their own choices.
The upsurge of this self-service movement can be traced to the mid-1980s. That's when the first generation of IVRs hit the business world. By pushing buttons on a touch-tone phone, an employee could suddenly make choices about how to invest in a company's stock-ownership plan or choose insurance benefits. The same employee could find out how many vacation or sick days were available. Over the years, IVRs have become increasingly popular... and sophisticated. In some cases, corporations now link employees directly to an HMO or mutual-fund provider. In such instances, it's possible to shift money between funds and change the contribution percentage by punching numbers on the telephone keypad. It's instant, there's no human intervention, and such a system usually is available nights and weekends.

But IVRs have a couple of glaring drawbacks. First, they're slow—a user must listen to a variety of menu options before making a single choice. Second, it's excruciatingly difficult to spell words and input alpha data on a telephone keypad—a problem that's magnified for those using rotary dial phones.

One alternative to IVR is the kiosk, a networked PC that frequently offers touch-screen capabilities. It can be placed in a lobby, warehouse or factory floor. Using specialized software or a Web browser, it allows users to see the information they're inputting, and even view reports and print them out. A change of name or address is easy—especially if a keyboard metaphor is provided. And reviewing benefit selections, payment information, a company handbook and even companywide job openings is simple. "If it's a well-designed system, it requires no training on the part of users. They simply walk up and begin using it to make changes or check on information," says Deb Edlund, brand manager for human resources at Lawson Software, a Minneapolis company that markets self-service applications.

Leapfrog to intranets.
Because they're easy to use, kiosks have skyrocketed in popularity in recent years. Nevertheless, many companies have recently opted to leapfrog kiosks altogether or supplement them with direct PC access. In some cases, that translates into electronic forms and e-mail self-service through programs like Lotus Notes and Microsoft Mail . However, many are now turning to intranet solutions that use Web browsers such as Netscape Navigator or Microsoft Internet Explorer . That makes navigation graphical and simple.

The big advantage to a corporate intranet is that it's easy to use, yet powerful. Since the Web browser is platform independent—it can run on PCs or UNIX or Macintosh operating systems—there's no problem sharing data across networks, including the Internet. Desktop access also provides access to records and data, any time and from almost anywhere—assuming that a company offers dial-up access. In fact, some vendors are beginning to offer links to third-party insurance and mutual-fund providers.

The emergence of corporate networks and intranets also is fueling new ideas about what types of self-service options to offer. Skadden, Arps, a New York City-based law firm with 3,500 employees worldwide, isn't only offering employees the ability to check personalized benefits information and update their records, it's venturing into the world of online directories and handbooks, applicant tracking and electronic pay stubs for direct deposits. More than 90% of the firm's employees, mostly attorneys, have access to the company's intranet through desktop PCs. Others can tap various HR functions through dedicated workstations in common areas. "We're concentrating on improving the workflow and using staff to counsel and audit," says Angie Sorscher, the company's payroll manager.

At Eli Lilly and Company, an Indianapolis producer of pharmaceutical products, the self-service concept includes an internal staffing component. Using IVR and the company's computer networks—including Internet access—employees can surf through available jobs before they're offered to the outside world. According to Paul Johnson, the company's executive director of human resources, the immediate access offers a number of distinct advantages. Not only can employees locate open positions more quickly and efficiently, they're able to see what skills they need to move up in the organization. By reading online job descriptions and maintaining their own online resumes, they can focus their efforts on specific jobs or categories.

For the company, the system is reducing costs associated with hiring new employees, and helping Lilly fill open positions with more highly qualified personnel than ever before. "It makes it easier to find the right person for the right job," says Johnson. "From an employer's perspective, it generates a far more diverse candidate pool and ensures that managers aren't overlooking the best person for the job."

Zero in on the right mix of technologies and solutions.
Despite its advanced capabilities, an intranet can't help those who work on a shop floor or drive a truck and have no access to a PC. A kiosk is essentially useless for those working in remote locations or retirees who no longer frequent the premises. And an IVR is too slow and cumbersome for many applications. Even if a company installs a system, it's no guarantee that employees are going to use it. "There's no single technology that suits all employees. It's important to find the right mix," says Jonathan D. Miller, chief operating officer at Interactive Corporate Communications Inc., an intranet software vendor headquartered in White Plains, New York. Adds ESSENSE System's Lapointe: "Each media has its strengths and weaknesses. You also have to deal with varying levels of computer literacy."

At present, the Hunter Group estimates that approximately 5% of companies use kiosks, 15% rely on interactive voice-response systems, 20% have turned to intranets and 50% use their own e-mail or electronic forms. However, Love-Sudduth notes the use of intranets is increasing while e-mail and electronic forms systems are losing favor, partly because of compatibility problems that can clog workflow and produce greater redundancy. "You want 100% assurance that data is going to get to where it's directed. Frequently, if you have duplicate names or nonstandard e-mail addresses and formats, you can wind up with problems." What's more, she argues that an intranet is far more intuitive—a fact that usually translates to lower training and administrative costs.

In fact, advancements in intranet/Internet technology—including tighter security—are making it a more attractive option all the time. Whether employees view data off a kiosk or a Web browser, new plug-ins that integrate seamlessly with Netscape Navigator and Microsoft Internet Explore rare opening the door to a universe of new capabilities. ICC's Miller notes that programs like Quicktime and Real Audio allow users to access video and audio on demand. And the use of Jav programming language on client PCs brings greater intelligence to the entire process. For example, a program can instantly inform a user when he or she makes an error while filling out an electronic form. And once a particular type of medical insurance is requested, the form will automatically offer only the relevant information and ask the appropriate questions. "It's becoming far more sophisticated and automated," says Miller.

Whatever approach an HR department takes, Love-Sudduth believes that one of the keys to success is to ensure that a solid workflow application is installed on the front end—so that data is routed efficiently. That means establishing a standard set of business rules that are stored in a central repository. "Employees don't care what's on the back end and how the information is pulled out of databases," she notes. "The whole idea is to make it so simple to use that people get the information they need, and that data is getting routed back to the proper database with little or no intervention on the part of the human resources department."

However, automating processes doesn't necessarily translate to cost and time savings—even if it's under the banner of self-service. Says Lapointe: "If you use electronic forms but fail to take work out of the flow, you've only muddled the process. If you develop a correction and approval loop, then you haven't reengineered any work. In fact, you may have actually added work to the entire process. Self-service is about streamlining and eliminating inefficiencies. When that takes place, everyone prospers."

Self-service pays dividends.
Not surprisingly, the cost of installing the hardware and software for employee self-service can vary wildly, depending on the scope and complexity of a company's needs. Interactive voice-response systems are available for $50,000, although third-party providers increasingly are offering IVR services at no additional cost. And many companies are able to purchase integrated solutions or build a self-service component atop existing HRMS systems at minimal expense. A packaged solution can typically run anywhere from $10 to $100 per employee—or in the neighborhood of $150,000 for a complete package. Custom solutions easily can double the tab. Kiosks generally cost $3,000 to $10,000 each. And, for companies that opt for an intranet, the cost of licensing Web browsers can range from free to $30 a copy. Of course, many companies already have PCs and browsers on every desktop and can add intranet capabilities at virtually no additional cost.

The payback for self-service can be startlingly fast. W.H. Brady has recovered the cost of its system in less than a year. At the current clip, the HR department will slash more than $1 million in labor, printing and telephone costs over the next five years. At Advanced Network & Services Inc., an Armonk, New York, not-for-profit company that promotes education through high performance computer networks, CFO Bob Harris estimates it will take about two years to fully recover the cost of the organization's investment in hardware and software. But he points out that Advanced Network's intranet—accessible inside the company and as a dial-up from outside—offers many intangibles that are difficult to measure in dollars and cents. "Employees know they can get information quickly and easily. The intranet also frees up HR to get involved in issues and problems that are crucial for the growth of the organization," he says.

Experts caution that employee self-service isn't a replacement for all human contact. Although employee acceptance of the self-service concept has exceeded all expectations, Lapointe notes that few things irk users more than not being able to reach a customer-service or HR representative when necessary. He also argues it's essential to promote new programs and raise awareness through constant marketing.

Concerns notwithstanding, it's clear that employee self-service is changing the face of human resources. Nearly all Fortune 1000 companies already have installed self-service systems or plan to in the months ahead. "The future," says Miller, "is linking more and more types of information and putting data ownership in the hands of those who ultimately are responsible for it. There's no reason why human resources must serve as a middleman. Employee self-service gets HR out of the administrative shuffle."

Personnel Journal, October 1996, Vol. 75, No. 10, pp. 84-89.

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