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HR Software Trends New Frontiers

Special Advertisement: Are you ready for the world of LMS, ASP, and XML? It's not alphabet soup. It's the future of human resources. Industry leaders describe innovations that help HR be faster, smarter, and more strategic.

October 17, 2001
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Are you ready for the world of LMS, ASP, and XML? It's not alphabet soup.It's the future of human resources. Industry leaders describe innovations that help HR be faster, smarter, and more strategic.

Randy Cooper
Chief Executive Officer/Founder -
Opus Solutions
Cooperfounded Opus Solutions in 1989. He has more than 15 years of experience inthe IT software field, with emphasis on HR, payroll, and benefits systems.Opus provides e-volution®, a suite of Web-based HR management tools thatincludes the HRMS engine used by 20 Fortune 100 companies.
VicePresident, Marketing-
Cyborg Systems, Inc.
AsVP of marketing, Jeff Koven is responsible for corporate marketingcommunications, customer relations, product management, and sales support.He focuses on identifying changes within the business world, and theirimpact on today's HR and payroll requirements. He directs Cyborg's productdevelopment and management accordingly.
SeniorVP, Product Management -
Legrandand his team are responsible for driving Monster's product development.Prior to joining, Legrand established a diverse eight-yearcareer with TMP Worldwide's Yellow Pages and Recruitment businesses, wherehe contributed to various efforts, including marketing management,corporate strategy, and interactive operations.
VicePresident -
SAP America, Inc. Human Capital Management (HCM) Organization
DougReed has responsibility for the overall management of the HCM organizationas well as for the strategic direction and vision of the mySAP HumanResources solution. His role encompasses sales, consulting, and productmanagement.
 JimE. Spoor
Priorto forming SPECTRUM in 1984, Spoor had a very successful 25-year humanresource career, including a broad range of human resources experiencewith executive-level responsibility for global HR operations.
Presidentand CEO -
Witteis a veteran high-tech operations executive with a wealth of managementexperience: sales, marketing, product management, HR, and businessdevelopment. HJis background includes nine years at SBC Communications asSVP for a $3 billion communications segment, launching 20+ new Internetand communications software products, patenting six.
HR and management teams are increasingly looking at streamlining andimproving their overall training delivery and functionality for their companiesand are seeking out information on new "learning management systems."What are the most pertinent questions or checklist items that HR and managementshould ask or be aware of when investigating a learning management system(LMS) or learning content management system (LCMS)?

Marcel Legrand: I would prefer to take an alternative approach tothis question. While the merits of delving into technical specifications,functionality, or customer support are all warranted, many of our clientshave expressed frustration managing the internal challenges associated withadopting an LMS. Start asking questions about your own organization, itslong-term commitments, the roadblocks, senior management advocates, andhow the system will be measured as "successful." If you don'thave those issues addressed first, no LMS provider can craft a mutuallybeneficial solution.

Douglas Reed: A world-class learning management system enables acompany to develop, deliver, and measure their training programs. A comprehensivesolution should:

  • Facilitate the transfer of knowledge

  • Enable global collaboration --internally or with third-party vendors

  • Align corporate strategy andlearning objectives

  • Integrate with existing software platforms

  • Reduce overall training costs

The use of improved mechanisms for accessing information, such as onlineportals, will yield measurable corporate benefits, including less time awayfrom work and, ultimately, greater job satisfaction.

Application service providers (ASPs) have been very popular during thelast year as a platform environment by which companies can save significanttime and money. In your opinion, have ASPs significantly facilitated functionalityfor HR? Are there still major questions to be answered with regard to thissolution model?

Randy Cooper: It is important to realize that ASP solutions arenot for everyone. There is no question that an ASP solution can delivermore application value for the dollar than a traditionally licensed solution.For instance, Opus delivers Fortune 100 HRMS functionality for as littleas $6 per employee per month. However, for a company to successfully adopta hosted solution means committing to a relationship with the ASP that ismore than customer/vendor. The relationship must be a true partnership.

Jeff Koven: The ASP model is simply an alternative way to accessHRMS solutions. It facilitates functionality for HR by eliminating any issuesan organization might have in maintaining an HRMS themselves. It is yetto be seen if this is actually a cost-saving vehicle, but it certainly hasproved itself to be an efficient, predictable way to deliver HRMS functionality.

Jim Spoor: Special-function ASPs have positioned themselves as HRsystems, creating much confusion as to what is an HRIS. It is becoming morerecognized that there are only a handful of true, full-functionality HRsystems that are being effectively delivered over the Web -- SPECTRUM isone of those.

As for determining which model -- ASP or in-house -- is best for your organization,ask yourself does the product meet your HR functional needs, and do youhave the resources internally to support such a system?

Curt Witte: The ASP concept has been focused on external hostingof existing enterprise software for large companies through a monthly feesubscription model to gain scale and cost efficiencies. Some gains havebeen realized, but running centralized client-server software over the Internetoffers limited upside. The real opportunity for HR is to run new Internet-nativesoftware that is designed for external hosting, allows for XML integrationand collaboration across systems, and operates on a wide variety of devices.

During difficult financial climates, HR becomes increasingly pressuredto justify return on investment for implementation of new HR software productsand services. What advice can you give HR on how to effectively measure orquantify ROI of their HRMS strategies?

Koven: The key to effectively measuring ROI is to focus on how quicklyan HRMS can deliver. Often, HRMS solutions are too complex or difficult toimplement to show an ROI in a timely manner. Many areas of ROI can be measuredusing quantitative methods (e.g., deploying electronic pay stubs, reducing paper storage, etc.). However, higher areas of return can be more difficultto measure. A qualitative review often reveals where an organization can streamline its broader businessprocesses.

Legrand: I think there are four facets of ROI:

  1. Response: a measure ofsatisfaction. Are the users and beneficiaries of the system pleased,and how do they specifically plan to apply the learning?

  2. Wisdom: a measure of learning.What attitudes, skills, and expertise have changed?

  3. Behavior: a measure ofbehavioral change. Did the participants alter their activities, habits,and processes?

  4. Results: a measure ofconsequences. Did the change positively impact the organization, department,and individual?

Reed: Human capital is an organization's most valuable asset in today'seconomy, and it must be used effectively. Implementing employee and managerself-service provides a proven ROI. HR can also use industry benchmarks tomeasure performance and set improvement targets for productivity. Automatingre-engineered business processes can harvest the resulting savings. Also usingbenchmarks, organizations can set improvement targets for employee retention, absenteeism, and overtime.Resulting savings can be realized through improved analytical reporting.

Spoor: Selling ROI propositions to senior-level management is a vitalpart of the system selection process. Several vendors, including SPECTRUM,offer help with that task. Needs, issues, and priorities vary from organizationto organization, but small percentage improvements in pay increase administration,accuracy of premium payments for benefit plans, more efficient enrollmentin benefits, reduced turnover as a result of improved HR practices, and improvedhiring effectiveness all add up to a rapid ROI.

In your opinion, what are the most dangerous pitfalls or common mistakesto avoid when implementing an HR software or online solution?

Reed: Executive sponsorship and teamwork are critical to the successof any implementation. It is imperative that the project have buy-in fromthe top in order to facilitate quick decision-making and corporate acceptance.The project team is the foundation of a successful implementation, and shouldinclude knowledgeable consultants, dedicated full-time employees, and responsivevendor support. A comprehensive methodology is also key, and should addressknown risk factors early in the time line, including change management,security, data conversions, and post live support.

Koven: The biggest downfall for a company is not getting organizationalbuy-in to how a solution can be best utilized. High-end HR software offershigh-end functionality too, but most of it is unusable if the organizationis unwilling to adjust its business processes to leverage it.

Cooper: Many HR organizations are so antiquated in their existingtechnology that the natural impulse is to try to solve all perceived problemsat once. The problem with this approach is that it tends to cause the implementationproject to spiral out of control with regard to both budget and/or timelines. It is best to focus on a core set of objectives that can be easilymanaged to successful completion and can be used to demonstrate solid ROIto management.

Legrand: Brand, reputation, and references still rule in any economy.Tied for first in this pitfall category is trying to introduce too muchcomplexity into a system. Trying to be too ambitious about customizationor integration with other systems, or striving for "the Nirvana ofsystems" often leads to systems that are over-engineered without manyof the features being used or adopted. There is a lot to be said for keepingit simple.

Many functional and administrative components of HR management systems(e.g., training, compensation, recognition, recruitment, etc.) are now requiredto interact with several enterprise-wide systems and applications. That beingsaid, what advice would you give to HR seated at the management table as decisionsare researched and made with regard to other functional software for the organization?

Spoor: ERP vendors tout the benefits of their fully integrated solutions.However, too often the compromises are such that few users end up beinghappy. In order to achieve the level of excellence required in the variousbusiness functions, including HR, it is essential to look for best-of-breedcapabilities that will enable those areas to get the best possible systemfor their specific needs. Data-sharing issues can and will be resolved whenthe right product is in place.

Legrand: Again my advice would be to keep it simple. While totalintegration is a wonderful goal to strive for, sometimes it comes at a tremendousprice. Management should examine the various points of integration withother systems and evaluate each on a cost/benefit basis. For example, perhapsa company can live with cutting and pasting part of a job description betweenone application and another if it will save significant dollars in implementationcost and reduce the potential for an unreliable application.

Witte: All products must not only support but also be active participantsin HR-XML. XML is a common interface method to exchange information acrosssystems. Standards like the HR-XML SEP 1.1 [staffing exchange protocol]eliminate middleware and the major challenges of integration. With HR-XMLstandards supported by most major players, consumers need not sacrifice"best-of breed" functionality because of integration challengesand resort to a "jack-of-all-trades" solution from an ERP player.

Cooper: One flaw that companies are beginning to see in the fullERP approach is that not all components are created equal. Though integrationis always an issue, sometimes it is better to select best-of-breed applicationsfrom different vendors and simply address the integration issues duringimplementation. HR management needs to keep their eyes on the XML initiativescurrently under way. With the increasing adoption of XML, companies willbe free to select best-of-breed vendors, and feel comfortable that cross-vendorintegration will be relatively painless.

What kind of new functionality for hiring management or applicant trackingsystems should HR professionals make themselves aware of, and what functionalityshould be closely examined when investigating these products and services?

Witte: Recruiting systems have focused on operational elements likerésumé management and candidate management (career Web sites).The benefits have been time-to-hire savings and cost-of-operation savings.The next generation will provide the ability to decentralize recruitingfunctions in a controlled environment to line management through a collaborativeWeb environment based on defined processes. This third-generation, end-to-endsystem that includes résumé management, candidate management,AND collaborative process will bring strategic return -- parallel to theROI of CRM systems (relative to customer management).

The Internet continues to revolutionize business. From a futurist's standpoint,what do you see as the next evolution of HRMS and Web-enabled software?

Reed: The portal is becoming an important competitive advantageamong companies with leading-edge HCM practices. Internet technology hasresulted in unprecedented access to a vast array of information, but informationoverload can paralyze the workforce, and cripple the entire supply chain.The next generation of enterprise portals provides all users -- the entireworkforce (internal and external), their families, business partners, orcustomers -- with personalized, convenient access to everything they needto get their jobs done.

Cooper: While the Internet has greatly improved an employer's abilityto communicate with employees, the required monitor/mouse/ keyboard interactionstill impedes usage. As miniaturized processors become ever smaller andare imbedded into everyday objects, the "computer" as we knowit will slowly disappear into our surroundings. As that happens, many simpletasks will become passive in nature. A simple example might be the abilityto track an employee's work hours and assignments simply by passively monitoringan employee's movements within the corporate complex.

Koven: Too often, an organization buys an HRMS solution and is neverable to utilize its full potential. The next evolution will leverage a collaborativeenvironment based entirely on network-centric implementations. For example,common messaging protocols and exchanging application-specific informationwill make it possible to assemble an ideal solution. This approach willallow organizations the freedom to fully leverage their HRMS.


  1. E-learning applications willbe integrated into Strategic HCM (Attain, Train, Retain) enterpriseapplications, and stand-alone e-learning applications will disappear.

  2. The outsourcing of the traditionaladministrative HRMS functions (benefits, payroll, and ESS) will happenfor most of the Global 5000.

  3. Strategic HCM will become themajor driving force for creating shareholder value and will garner moreCOO/CEO focus than CRM has.

  4. XML-Smart Tags will revolutionizeapplication sharing and content management via the XP operating systemand drive a much lower TCO.

Spoor: Although we consider the current impact of the Web enormous,the biggest changes are yet to come. The emergence of applications availableas "Web services" which are "interoperable" with theability to share data is imminent. There is also a parallel emergence ofwireless accessibility to information. Employee and manager self-serviceis becoming too limited and will be replaced by individual "digitaldashboards" that have the ability to select the content and capabilitiesindividuals need on any device, at any time, and in any place.

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