When HRMS Goes Global Managing the Data Highway
When HR needs to notify employees of a change in benefits or policy, for example, many of the workers are 40,000 feet above the earth. When it needs to track headcount or update employee records, it has to deal with 24 time zones and dozens of languages and cultures. In addition, systems and technologies that work in one place can come to a grinding halt elsewhere.
Yet, these days, the HR department at British Airways moves data and handles tasks as efficiently as the firm's jets move people from one place to another. An automated system handles recruiting, benefits, headcount, basic record keeping and an array of other functions—cutting across technology platforms and breaking language barriers. Moreover, the system, dubbed ACHORD (Airline Corporate Human & Organisation Resources Database), links to 35 other systems that require staff data within British Airways. Plans are now under way to link to 40 additional business systems.
Indeed, when a manager in Kuala Lumpur needs information on terminations or company share schemes, it's accessible within seconds. When an HR specialist in New York requires data on pensions or concessional travel arrangements, it's visible in a flash. With a network of IBM mainframe computers linked to PCs and dumb terminals, data flows seamlessly between offices and across national boundaries. What's more, the worldwide network has almost eliminated duplicate data input, paperwork, disks and delays in processing work. "It fits into the concept of reengineering and making HR accountable and involved in corporate matters," says Corey. "It provides us with a powerful tool."
These days, managing a global work force requires the skill of a heart surgeon and the patience of an arms control diplomat. Laws, cultures, business practices and technological limitations are a constant reminder of how challenging a task global HRMS actually is. But, constructing systems that allow foreign units to operate at peak efficiency while maintaining high levels of compatibility is essential.
"In the emerging global economy, companies—including HR—must view their resources on a worldwide basis. It's becoming increasingly difficult to avoid global issues, and the systems that process work and drive change must reflect the new environment," says James E. Spoor, president of Spectrum Human Resources Corp., a Denver-based company that produces HR software. Adds Betty J. Kagan, principal consultant at Price Waterhouse L.L.P. in New York City: "The technology is more than just an opportunity to share information efficiently. It's the basis for creating an efficient and highly competitive organization."
Unfortunately, there's no one-size-fits-all system. Human resources professionals must evaluate their own businesses' needs carefully. Should your organization create independent and unconnected systems in each country, or should it link the entire corporation under the umbrella of a single network? What kinds of decisions go into deciding on software and hardware? How can HR ensure that data flows smoothly between units and divisions in separate countries? And how can it be sensitive to cultural issues and aware of technological limitations while ensuring that systems work together synergistically?
There are no simple answers. Designing a global HR system that creates an effective computing environment lies somewhere between science and art. An array of factors affect the decision—including culture, finances, organizational structure, existing equipment and the countries that a company is doing business in. "It's a highly individual process," says Lincoln Norton, CEO of HRSoft, a Morristown, New Jersey-based HR software company.
Strategy should dictate system decisions.
The best place to begin when creating a global HRMS is to evaluate what it is you're trying to accomplish. Kristy Fisher, information technology group director of administrative business systems for Microsoft Corp., explains: "Companies need to take a good look at what they're trying to achieve and how a system can meet their goals. The strategy must drive the technology. "
Sheila FitzPatrick, vice president, worldwide HR applications for Redwood Shores, California-based Oracle Corp., agrees. "You have to have a clear picture of what your goals and objectives are, what the critical success factors are, what it is you're trying to achieve and what type of data you want to keep. You really have to understand the processes of how you manage HR. Otherwise you're going to set yourself up for failure."
When Steve Sainsbury surveys his company's global empire, he's constantly reminded that it isn't the technology that drives HR management systems, it's the strategic thinking behind it. All the high-powered hardware and software in the world can't assemble work teams across international borders, handle recruiting in foreign countries, or eliminate the mighty river of electronic data that flows between headquarters and regional offices. "The technology only enables these processes to take place more efficiently," says Sainsbury, vice president of human resources reengineering and information services for Northern Telecom Ltd., a Canadian tele-communications giant with a presence in 90 countries, including the UK, China and the United States. "It's a tremendous tool, but only if it's designed well."
Northern Telecom has built its system on the simple but often-forgotten premise that information moves far more easily than people. Thus, it created a central database—a "data depot"—built around a set of core elements. At the touch of a button or click of a mouse, Sainsbury or anyone else with authorization can view records from around the globe. Whether it's headcount information, salary ranges or recruiting data, the information continually is updated as it's fed in from HRMS and independent vendors across the world. Yet, the system also is modular. The company has gone to great lengths to acknowledge the similarities and differences between countries and regions. "Canada and the United States, although they're different, can be operated as a single component because of language and cultural similarities. Germany and China can't," he says.
Although the system is customized to the specific needs of a country, data fields and elements are reused globally. That means that thousands of elements exist internationally, but only 120 or so are available throughout the system. The way Sainsbury sees it, more isn't necessarily better. "It's getting the right information to the right people at the right time," he says.
And the Macintosh-based platform, wired together through local and wide area networks, helps make that a reality. At each location within a region, the data that resides on a file server has been replicated and placed on all others. That allows faster access and better overall support. As Sainsbury explains: "We don't want to run each site as a separate silo."
Of course, such a system works only as well as the weakest link. Feeding information into the corporate database is a task wrought with potential roadblocks. If data becomes bottlenecked, or the system is incapable of importing data from a specific program, HR can pay big in time and cost. Although Northern Telecom allows units in a given country to decide what software to run—the firm uses a combination of in-house software and off-the-shelf programs—it requires that units ensure that data will flow smoothly into the central corporate database before they install a system.
In addition, outside vendors must adhere to a strict set of standards that ensures that relevant data continually is input into the database. And when HR needs to update system components or provide software upgrades, it's able to use the network to send data directly to each user's desktop. By simply clicking an icon, the changes are made automatically—no floppy disks, no tapes and no support help needed. (For further information on Northern Telecom's system, see "Northern Telecom Handles International HRMS With Care.")
Compatibility, accessibility and timely data flow is a key concern for many companies.
A data jam on the global technology highway can severely undermine HR staff in far-flung corners of the world. It can result in lost time and contribute to huge inefficiencies—particularly if a unit in Japan finds itself stalled as a result of nagging problems in Finland.
That's why at Microsoft, which has a presence in 56 countries, global HR is an all-consuming task. In the past, the organization took a more centralized approach to storing data, but found that there wasn't any real incentive for subsidiaries and foreign units to provide it as quickly as the company needed it. So, the Redmond, Washington-based software giant turned to Spectrum Human Resource System's HRVantage program—tied into its own Access database—for its subsidiaries, and to PeopleSoft for worldwide reporting. Although Microsoft set basic standards for how employees in other countries use the system, it allows them to customize fields for their own needs—whether it's for reporting on religious affiliations in Germany or simply a way to create a local phone and E-mail directory. "They now keep the system up-to-date because it's able to support their local requirements," Fisher explains.
And it supports Redmond's needs as well. The organization has the ability to report on people and positions worldwide—and across departmental lines. For example, HR data might be used by someone in sales and marketing to compare personnel costs in different countries. That's something that can help determine pricing strategies within a particular country. Yet, the system also limits the information available to those in other nations. As Fisher puts it, "It's important to figure out what information they need and what they don't need."
Not an easy task. Especially when units in each country can't always agree on what information they need from each other—or from central headquarters. When it comes to tracking expatriates, for example, the corporate system must be flexible enough to handle the array of transactions and reporting systems for individual countries. Yet, it must satisfy corporate HR's needs for complete records. "What you recognize," says Fisher, "is that the business rules and decision making are a key to ensuring that all the technology works synergistically. If you don't have a clear understanding of what you want to take place and what you don't want to take place, the system will create more problems than it can solve. You wind up treading water rather than moving forward."
Not surprisingly, Microsoft is dedicated to trying to swim through the ocean of HRMS issues as quickly and efficiently as possible. The company has begun automating processes for several of its most common transactions. Using workflow and intelligent agents that can electronically route information from desktop to desktop with virtually no human intervention, managers can initiate a transaction and then sit back as it routes itself through the system via E-mail. As each manager signs off, the transaction continues its journey—even across international borders.
The company has also pushed data input directly into the hands of employees whenever possible—which has freed HR from a great deal of administrivia. The self-service approach has created greater responsibility for managers in the field and allowed HR to think more strategically. Later this year, Microsoft plans to roll out a succession-planning module and virtual career center, both of which will be accessible internationally. Using E-mail and networking links, a manager in Brazil might apply for a position in the UK, for example.
Type of network used influences data flow.
Motorola may have the most global HRMS vision of all. With nearly 60,000 employees in the United States and an equal number in countries as diverse as Costa Rica, Norway, Israel, China and Korea, the semiconductor and telecommunications giant has adopted a philosophy of creating a distributed network of HR data. By developing information warehouses at sites around the world, managers will have access to all the data they need in a matter of seconds. It's all part of a plan to make HR more proactive, and put strategic data into the hands of those who need it.
The company now is establishing a global, wide-area network, with each site able to customize its software to contain core data elements. Within each facility, Macintosh computers will run under a local area network (LAN) driven by a combination of file-servers, client-servers and mainframes. Standardization will only take place at the local level, though data compatibility will occur companywide. Says Rich Berger, manager of international HR management at Motorola's headquarters in Schaumburg, Illinois: "We don't want a central corporate database that only the corporate people have control of. We want HR in each location to be able to do their own analysis, and access the corporate database only when it's necessary."
Yet, as any HR manager knows, that can be a tricky proposition. All it takes is a simple reorganization or shuffling of resources for facilities and departments using one system to suddenly find themselves switching midstream to a different one. As Berger puts it, "A building that used to belong to Unit A suddenly belongs to Unit B. Then, everyone winds up devoting an incredible amount of time converting systems and data. The fact is, the laws and rules of France are a better reason for two units in that country to use the same system than the fact that their business practices are similar."
Like Microsoft, the organization will use sophisticated workflow technology to electronically route documents and data around the globe. Not only will that reduce time and administrative effort for HR, it will help Motorola realize its goal of reducing—if not eliminating—paperwork, telephone messages, floppy disks and other less efficient ways to move information around. In addition, by storing data in computers at sites around the world, the company will have an effective disaster recovery network. In fact, if a system goes down in any one region for any period of time, the data still can be accessed and analyzed by viewing it from another site.
Yet Motorola's global HRMS strategy extends far beyond data accessibility and compatibility. Its E-mail system allows HR to attach files and send them throughout the organization. That makes it easy to send updates, news and an array of other documents to an HR manager anywhere on the planet—or broadcast news to line managers around the globe. It also allows units in various countries to communicate with one another regardless of time or geographic differences. "Things are set up so that the only way to get the latest and greatest information is to use E-mail. It has proven to be an incredible enabler," says Berger.
E-mail hasn't been the only boon. The company now is establishing its own internal site on the World Wide Web of the Internet. The company—as well as offices in regions or individual countries—will be able to post policies, job openings, training requirements, benefits and other HR-related material. "The advantage of the Web is that it's platform independent," says Berger. "We don't have to worry about what kind of desktop system a person uses. We don't have to worry about adapting technology worldwide so everyone has access. It's a way for the entire company to link together."
Technology decisions rely on global resources.
Creating a system that links the entire corporation globally requires the proper technology. And that's an ugly word in the global HRMS arena. High-end Pentium PCs and client-server systems that process work with incredible speed in the United States, Europe and Japan often come to a sputtering halt in developing nations. Not only do many corporations find themselves battling the cost curve when it comes to installing a system in a foreign country, the price of maintaining and servicing the computers often is prohibitive—and that's if the firm can find someone capable of handling the task.
Price Waterhouse's Kagan points out that one of the biggest obstacles to creating a worldwide computing platform is the lack of trained experts, programmers and other support personnel in many countries. "On paper, it seems logical and simple to send machines to a country and get them installed. But what do you do when there are no trained repairmen available? What do you do when an employee can't call tech support to get an answer to a software question? And what happens when you can't get a license to run a particular piece of software? Usually, you wind up running only the most standard hardware and software for that country."
That often means 286 or 386 PCs that can't handle a graphical user interface (GUI) like Windows or OS/2 particularly well—if at all. You easily can find yourself in a situation in which it's difficult to exchange data efficiently, or it's nearly impossible to create a corporate data standard.
Add to that the tele-communications bottleneck that occurs in many developing countries. As Kagan puts it: "The telephone companies are not up to speed, and so some organizations find themselves trying to modem data at 2400 BPS, send tapes or diskettes via overnight mail, or revert to paper."
What's an HR department to do? In recent years, many companies have turned to Systems Network Architecture (SNA), which allows client-server and mainframe systems to move data quickly and efficiently between sets of LANS as well as dumb terminals. British Airways is one of them. Now, some are taking it a step further. When Chevron created its global system, it turned to a satellite-based system with sub-second response to most of its major centers. That, along with leased phone lines, allows the company to bypass most of the telecommunications problems that are the norm in many countries. Although the system was created to transmit vast amounts of financial and geophysical data, HR was able to piggyback off the technology and use it for its own purposes.
The company's data requirements are formidable, to say the least. Chevron tracks approximately 42,000 current employees worldwide, and has more than 250,000 names in its computer. Some are past employees, others are spouses and dependents vested in the company's pension plan or receiving benefits. A combination of mainframes, client-server and desktop workstations handle the vast requirements. When data flows into the mainframe superserver from workstations or LAN systems, the system edits the data to ensure that it conforms to the proper format and then updates the central database.
Although 95% of the information is maintained in the central database, Chevron is moving away from the idea of operating a global core system. "It's important to keep certain data in a central repository and to have effective links for obtaining that data, but the global environment is becoming so complex that it's nearly impossible to have a single system that can manage the processes and provide data support. It winds up restricting some of the countries from what they need to do," says Jay Stright, manager of operations and technical planning in Chevron's HR operations and employee services business unit.
In fact, the firm now is reevaluating whether it needs to maintain data on a security guard in Angola or a shipping clerk in London. "We have begun to realize that we don't need to manage every employee group globally," Stright says. "In some cases, it's more efficient to keep information about them in the country in which they work. Using a core global database approach is expensive. The value of the information isn't necessarily worth the resources required to support it. You can do other things with those resources."
Another company that takes a decentralized approach is Upjohn, which has approximately 18,600 employees scattered around the world. HR offices in various countries are allowed to customize hardware and software for their own needs; corporate HR views the task as the responsibility of each subsidiary. The Kalamazoo, Michigan-based firm has begun to standardize on the IBM AS/400 hardware platform, though Rick Sack, manager of HR and employee health information for Upjohn, admits that laying the foundation for the technology can sometimes require more work than inputting data manually—particularly when it streams in from small offices in countries lagging far behind the technology curve.
Indeed, greater local autonomy also comes at a price. In fact, that's where the issue of compatibility raises its ugly head. The industry has long been mired in a swamp of confusing—usually incompatible—standards. Moving data from one computer to another, or even within programs on the same system—can end up being an exercise in pain and frustration.
Although back-end database standards, such as SQL (Structured Query Language) and ODBC (Open Data Base Connectivity), have helped—along with front-end GUIs like Windows and OS/2—getting data out of one system and into another efficiently can still be a nettlesome problem. In some cases, organizations find themselves stuck with data islands—countries that aren't able to transmit data electronically.
Cultural and legal issues impact technology decisions.
The technological gap between highly industrialized nations and developing countries isn't the only roadblock, either. Cultural issues play a major role as well. As Stright puts it: "We used to have a policy that said, 'Thou shalt be compatible.' What we learned is, you have to be careful with the language because it can upset international relations within a company. Ethnocentrism is very high, and if you tell someone in another country how to do something, the tendency is for them to try to prove you wrong. We have learned that it's important to let those in other countries understand the big picture, and it's important to discuss issues with them so we can all have a common environment. But it's often best to let them make their own decisions about specific systems and software."
Legal issues and varying reporting standards are certainly part of the picture. So, too, is the fact that benefits—from medical insurance to automobile allowances—vary greatly from country to country. But there's a practical side to the equation as well. Says Kagan: "When a company needs to transfer data from one country to another, it can present enormous challenges. Not only to create screens in local languages, but also to deal with currencies that use a different number of decimal points, dates displayed in a different order than in the United States, and many other subtle variations. You can wind up devoting a great deal of corporate resources to designing software that's able to pass the data through translation tables."
Of course, many software companies now are tackling the issue head on. Microsoft has built more than two dozen languages into many of its flagship software products. Specialized HR software companies, such as Tesseract, HRSoft and Spectrum, increasingly are adapting their programs for use on a global basis. Tesseract's software, for example, allows users to take advantage of the Windows interface and cut and paste data from Excel or Word. It also allows users to build highly specialized applications from Lotus Notes and read DB2 relational database files natively. And those savvy in using programs such as Visual Basic or Power Builder can develop an array of other applications—all of which work together seamlessly.
Still, the problems can be vexing. At many organizations, profound changes in business structure are generating an array of practical concerns. Work teams, strategic alliances and virtual organizations mean that systems—and data—must be highly flexible and adaptable. "In the old days, it was one person for one job," notes HRSoft's Norton. "Today, people can have multiple jobs or wind up on a temporary task force or work team. People are having to deal with the fact that the modern organization has shifted away from a hierarchy to a cluster of competencies around which work often is designed. And that's reflected in the systems that need to be in place."
It's also reflected in the growing trend toward outsourcing components of global HR-MS. Companies large and small increasingly are drawn to the idea as they attempt to focus on core competencies. Many, including Northern Telecom, are finding that outside firms can handle certain tasks, such as benefits administration and enrollment, far more effectively and at a much lower cost. And when outside systems interconnect with internal networks, data exchange can occur transparently.
Spectrum's Spoor says many organizations make the mistake of becoming too corporate-centric. "There's a temptation to over-manage in a global environment... . The corporate landscape is littered with the debris of organizations that have tried to artificially impose policies, practices and HR systems on those outside the United States. Any company that mandates corporate standards in spite of local practices is doomed to fail."
FitzPatrick recommends that companies define their requirements globally. "Often, companies define requirements out of one country, whether it be the United States or the Asian Pacific driving it, and they don't take into account the differences between countries in terms of overall employment laws or taxation rules. They end up with a set of requirements that aren't really global in nature. For these reasons, it's important to assign someone from each country to make sure all bases are covered."
Says Spoor: "Choosing systems in a global environment never is easy, but it's the foundation for future success. The technology can either enable or block the organization's strategies and goals."
Getting the right system is just the beginning.
The global environment presents still other challenges for HRMS. One of them is training workers how to operate systems correctly. Many organizations, including Chevron, Motorola and Microsoft, prefer to handle training at the local level whenever possible. And, increasingly, front-end graphical environments such as Windows—as well as the disappearance of arcane codes and complicated transactions screens on the user's desktop—make that entirely possible.
Moreover, many companies are finding that training for HRMS isn't the practical and logistical nightmare it once was. British Airways trains most HR staffers to use its ACHORD system in a single day; advanced training takes three days. Employees also have access to a company-operated hotline, and a user's guide written in-house provides answers to the most frequently asked questions. Refresher courses are provided periodically, and additional courses are offered for other skills. The result? A survey conducted by British Airways last June indicated that 92% of all users were satisfied with the system and the quality of the data.
And then there's the issue of security. In a world where sensitive data can lead to the next great breakthrough or the loss of it can cripple an organization, security is an ever-present concern—both through external links with modems and the Internet, and internally. At British Airways, the emphasis is on managers deciding at the local level. With its global ACHORD system linked to 35 other systems and accessible to dozens of departments, security is best handled at the local level, says Corey. Without exception, line managers are required to authorize use by specific employees. Nevertheless, HR Systems controls the creation and modification of individual security profiles from headquarters. The system is sophisticated enough to allow access to any of 337 screens, even down to a single field or transaction level. If HR Systems has any doubts or concerns, it discusses them with the worker's boss.
Chevron is no less diligent. It can establish clearly defined security levels, and requires personal identification numbers (PINs) on kiosks and systems accessible from outside. Because the core environment is table driven, HR has a good deal of flexibility. "If we decide to change the system, it can be handled effectively," says Stright. Rather than moving toward a more restrictive environment, Chevron is trying to open things up as much as possible. "We're trying to give people the data they need to make good decisions. Our philosophy is: If you're allowed to see the data on a piece of paper, you're allowed to view it on the system," he says.
That can ripple down to issues not directly related to security. For example, at Chevron, one highly valued manager nearly left the organization because he continually was offered promotions that required a move. The employee felt that this was a way to make him quit because the man's son suffered from a medical problem that prevented the family from moving. Unfortunately, key managers in various locations didn't have access to the data—a situation that has since been remedied.
Chevron's situation demonstrates how data sharing is becoming a key factor in developing a successful system. As many corporations take the plunge and spend millions of dollars to develop global networks, there's a growing need for data to flow across departmental lines without obstruction. British Airways' success with its ACHORD system is partly the result of data sharing throughout the organization. "Redundant systems and duplicate data means wasted time and effort. And that's something that most organizations simply can't afford in an era of intense cost cutting and price pressure."
Yet, getting to the Promised Land is never without struggle. Many organizations find that it can take two to three years to implement a state-of-the-art system—and that once it is online it's obsolete within a couple of years. That, of course, is the nature of today's technology. Choosing hardware and software that can tackle global demands while balancing cost and efficiency issues is a task of epic proportions—and one that requires a keen sense of analysis.
One of the keys, says Fisher, is to create an environment that's scalable from the beginning. That makes it possible to run the same software—and database—on a single PC or an SQL server running on a network. It allows room to grow. Motorola's Rich Berger also believes that it's important to look for generic standards rather than get boxed into a system that's a possible dead-end. And Northern Telecom's Sainsbury insists that, regardless of the type of system and structure a company turns to, the system must be constructed around a solid philosophy. "The technology enables you to change the way you do business—but only if it's well thought out."
All of which can lead to a variety of solutions. While some companies find that off-the-shelf software is perfectly suited to handling their HRMS needs—it's often far less expensive and requires fewer resources to implement—many others require a combination of commercial software and proprietary HRMS. Still others find themselves attracted to proprietary systems from the start—something that can reap enormous rewards or produce a colossal failure. When British Airways began redesigning its HR systems in the early '90s, it searched long and hard for commercial software that could handle a variety of functions. "There wasn't anything that cost less to implement and provided the features we needed," says Corey. "We were looking at having to customize the programs a great deal to have the level of functionality we were looking for. It simply wasn't worth the effort."
By constructing its own database, British Airways was also able to build in features that enabled it to link all its training administration systems and make data more widely available to managers. It's now designing a Position Control module that's scheduled to go online in June 1996, beefing up its external hiring system, and continuing to tweak the system to facilitate ongoing corporate and HR reengineering efforts. In every instance, the company carefully calculates the payback of benefits over costs, says Corey. It does so by preparing detailed business case studies that undergo scrutiny by a variety of technical and financial committees.
Effective global HRMS systems improve HR processes and HR's role as strategic partner.
When a global HRMS system works, the results can be remarkable. Since Chevron introduced its system in 1989, it has reduced HR-systems-related staffing by 40% and costs by 45%. It also has improved many global processes. That met the objectives of the initial project. Yet Stright says further cost/value alignment is necessary to remain highly competitive in a cutthroat global environment.
Chevron isn't the only success story. At British Airways, the once oppressive day-to-day administrative load has receded and been replaced by an HR department that's now a strategic partner in corporate affairs. And at Northern Telecom, Sainsbury has project teams for HR reengineering working across international borders—despite the fact that they rarely wind up in the same room together. The teams form and dissipate as needed, using the technology to link to each other. More importantly, "We've created an infrastructure that enables us to handle change," says Sainsbury. "Essentially, we're changing the way we do business. The technology is helping drive the corporate strategy."
Which is precisely the point in the new global arena. "The realities of doing business in a global manner are forcing HR to expand its horizons and perspectives," explains Spoor. "The sleepy old view of having a single way of doing things no longer is acceptable when a company is operating in a global manner. Business practices and the business environments within countries are changing rapidly. And that has a tremendous impact. Only the strongest organizations will thrive."
Personnel Journal, June 1995, Vol. 74, No. 6, pp. 90-106.