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Big Blue Gets the Red Out

July 1, 1994
Related Topics: Reengineering, Human Resources Management Systems (HRMS/HRIS), Featured Article
In the history of corporate America, few companies have been forced to endure such a cataclysmic restructuring as Armonk, New York-based International Business Machines. And when it embarked on a thorough examination of the entire organization, human resources was near the top of the list. "It was immediately clear that we were terribly suboptimized," says George Krawiec, general manager of IBM's WFS Workforce Solutions Group. It turns out that IBM's 36 human resources centers around the United States each had its own information technology department—something that contributed to plenty of repetition. Krawiec says: "We were a technology company that was not using technology effectively."

So, in 1991, IBM set out to revamp human resources. One of its first decisions was to consolidate its benefits administration department. The firm immediately moved staff from the 36 locations around the U.S. into a new state-of-the-art service center in Raleigh, North Carolina. The firm equipped representatives with PCs capable of conducting powerful hypertext searches on benefits policies. It then divided the representatives into two work groups. Tier 1—the largest group composed of generalists—would receive the most basic questions, which make up the majority of the calls. Tougher questions would go to a smaller number of Tier 2 specialists. The result: IBM found that it no longer needed to staff to the highest level of need. Using call-path technology and a redesigned workflow, it was able to cut 40% of the original staff and handle a record number of calls.

And that was only the beginning. Today, a new salary system routes pay-increase requests to the proper person for approval. Once it's signed off, the confirmation returns to the manager initiating the request and is sent automatically to payroll for processing. A 24-hour interactive voice-response system processes upwards of 170,000 benefits requests a year. Within 24 hours, it provides an employee with data on his or her retirement plan. In the past, a clerk had to pull the file, sit down with a calculator and figure out the employee's status and mail the information out. That could take several days.

Some of the workflow automation the company's using is downright innovative. For years, IBM operated a paper-based employee suggestion program. When a good idea came in, it could languish for weeks or months before being routed to the right department. But two years ago, it opted for technology that could fully automate the program. Now employees log onto E-mail, type in the word idea and access a menu that prompts them for information. Once they send their ideas off, the information is zapped to the appropriate department for evaluation. If ideas have merit in other divisions or departments—whether it's Austin or Boca Raton—the computer sends them there automatically.

All this new technology is beginning to make its mark. Since 1987, IBM has slashed its HR work force from 3,300 to 900—and it hopes to make further cuts in the future by leveraging the technology even more. "We have pushed administrative tasks downward and outward," says Krawiec. "We're forcing the people who should be responsible for an action to handle it." Yet, he's also adamant about not merely dumping human resources work on to others. "I'm not interested in transferring the work of five HR people on to others in the organization. I'm interested in making things easier and more streamlined. Technology serves as the underpinnings for achieving that goal."

Personnel Journal, July 1994, Vol.73, No.7, p. 32F.

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