Technology has created remarkable new opportunities to eliminate administrative overhead and transform the HR department into a strategic partner. It also has served up vexing challenges, ranging from cost and maintenance issues to how to use computers and software effectively.
Simply put: Technology is changing everything. Says Larry Dunivan, vice president of global HR solutions for Lawson Software in Minneapolis, Minnesota: "We’ve seen the first wave of technology enter the workplace and HR department. Today, companies have automated many processes and eliminated unnecessary work."
However, Dunivan adds, "What we haven’t seen is organizations drive value through the organization and harness the strategic capabilities of the systems and software." Round two, he says, will bring more sophisticated capabilities and knowledge made possible by the Web and e-business.
In fact, that’s already starting to happen. For instance, whereas the first employee self-service systems used little more than electronic forms to automate paper-based solutions, advanced workflow capabilities are now routing forms to the appropriate person or system. If an employee adds a new dependent to the record, the system can automatically populate fields asking for insurance information and tax withholding.
That alone is a huge step forward. But when analytical capabilities are added to the mix, it’s suddenly possible for an HR manager to understand overall patterns, ranging from demographic shifts to the popularity of various programs. Combined with financial data, it’s possible to understand the cost per employee—or group of employees—for a particular program. It’s also possible to conduct what-if scenarios to better understand how to realize maximum return for dollars spent.
And when such capabilities become Web enabled, an HR department can put data directly in the hands of the appropriate person without regard to geography or computing systems.
"Suddenly, people are free to do their work without thinking about how to use the system," explains Karen Riley, human resources product marketing manager at Infinium Software Inc., based in Hyannis, Massachusetts.
Internet technology broadens HR’s reach.
Today, just about everything is heading to the Web—whether it’s through the Internet, an intranet, or an extranet linked to a third party, such as a 401(k) provider or a work/life services provider.
"The Web is allowing HR to take on a bigger view of the organization. It is making it possible not only to deploy sophisticated capabilities to managers and employees, but also vendors, suppliers and customers," says Riley.
Some companies, like MCI Worldcom Corp. in Clinton, Mississippi, have embraced Web technology and transformed the way work gets done—inside and outside human resources.
The telecom giant has moved beyond online directories, handbooks and employee record updates to a world where employees can venture online to purchase stock and reallocate investments in their 401(k) account, fill out electronic W-4 forms, and view an electronic pay stub a week before they’re paid.
Employees at MCI also are able to view streaming video of managers and executives providing briefings or discussing strategic issues, check best practices, and sign up for courses and engage in distance learning directly from their desktop. The intranet provides the tools for a manager to know at any given moment just where an employee stands in terms of skills and training.
The march toward the Web shows no signs of slowing. Today, it’s possible to deploy most types of applications over the Web, and one of the hottest has been online recruiting, which has revolutionized HR over the last few years. Sites such as Monster.com, HotJobs, CareerBuilder and Career Mosaic have become central hubs for job seekers and employers, while a slew of start-up companies have flooded the marketplace.
Add to all this the capabilities of firms such as Webhire (formerly Restrac) and Lawson Software’s iJob, which integrates online searching with résumé tracking and database management, and it’s clear that a not-so-quiet revolution is taking place.
The story is much the same in the area of payroll. Web-based applications—particularly those that integrate with enterprise resource planning software—is allowing HR to aggregate data from various computing platforms, operating systems and applications. Armed with a Web browser, it’s possible to drill through data, provide electronic W-2s and W-4s for employees, and even outsource payroll processing to companies such as Ceridian, Genesys and ADP.
All this can take HR out of the role of extracting and inputting data and propel it into the function of generating value for the enterprise.
A growing number of solutions is helping HR get smart.
All these processes combined with the glut of information streaming in from online sources have spawned entirely new ways of viewing and thinking about information. Here are a few ways technology has changed information:
Internet portals. By putting relevant information on a Web page—using hypertext, charts, graphs, photos and other objects that link to diverse applications, databases, processes and functions—it’s possible to customize and personalize each person’s workspace through Internet portals. Like its commercial cousins Yahoo! and Excite on the Web, the corporate portal attempts to organize the chaos of seemingly unlimited online information.
Within HR, that can translate into viewing various sources of data. A manager might track key indicators such as labor costs or competency levels by workgroup. He or she might also view personal 401(k) account information, pending e-mails, alerts that certain task need to be addressed—say an approval for a promotion or a 360-degree review—and virtually any other relevant information.
The key is that the portal seamlessly combines the data from various systems into a single point of interface and a person can customize it without doing any programming.
"A well designed portal can create a very compelling experience," says Alexis de Planque, program director for e-business strategy at Meta Group in Stamford, Connecticut. According to de Planque, portals fit the natural evolution of intranets and information management.
"The Web browser becomes the desktop, and as applications become increasingly Web enabled, it’s the place where information exchange and knowledge transfer takes place," explains de Planque. Portals increasingly fit into larger knowledge management (KM) initiatives. When used effectively, KM can track what’s inside people’s heads rather than only what resides within IT systems.
Shared service centers. By consolidating various functions in a single location and processing all transactions and claims en masse, it’s possible to reduce—if not eliminate—much of the redundancy and overlap that plagues the typical corporation.
"Shared service offers tremendous economies of scale," says Steve Stanton, managing director at Hammer & Co., a Cambridge, Massachusetts-based consulting firm specializing in reengineering.
Indeed, many organizations have found that it’s possible to reduce administrative costs anywhere from 20 percent to 50 percent by identifying the most efficient way to deliver a particular service and then creating a customer-oriented mindset.
At Allied Signal Corp. in Morristown, New Jersey, new technology, heavily dependent on the Web, has ushered in a new model of corporate efficiency. Five years ago, the 70,000-plus employee company combined more than 75 functions into a shared service center spanning five functional areas, including finance and HR. That has eliminated HR reps spread throughout the country—often handling redundant work.
Today, about 1,100 employees provide services to the entire Allied Signal organization and 400 outside customers. That has saved the corporation about $300 million over the last five years.
Application Service Providers. Some companies are now turning to application service providers (ASPs), which allow them to rent space on a remote system and let an outside company manage system maintenance, security and upgrades. It’s a trend that’s particularly suited to small and medium size companies with limited resources. That can save money and free IT staff to handle more urgent matters. And when it is done right, the fact that the software resides outside the organization’s boundaries is transparent and secure. For example, US Internetworking Inc., based in Annapolis, Maryland, supports ERP packages from PeopleSoft and Lawson, customer relationship management (CRM) software from Siebel Systems, and e-commerce and messaging applications from Microsoft.
Business intelligence. One of the most powerful new technologies available, business intelligence uses tools such as online analytical processing (OLAP), decision support systems (DSS), executive information systems (EIS) and data mining.
Together or apart, these systems provide insights into business trends and patterns, and can help an organization markedly improve its decision-making capabilities. "Ultimately," says Jose Sta. Ana, a senior industry analyst for market research firm Dataquest in San Jose, California, "It can serve as a huge competitive advantage and help a company use its resources more effectively."
With a data warehouse and datamarts in place, an HR department can analyze labor costs and productivity among various groups of workers to better structure pay and benefits packages. Senior management can use the same data to determine where a new plant or office complex should be built.
Likewise, sales and marketing managers can overlay sales data with labor expenses by region, product group or other factor to tweak compensation systems or change hiring processes.
The list goes on. Another system to keep an eye on is Web-based customer service, complete with sophisticated call centers and live online support through chat, videoconferencing and Internet telephony.
Still others are making human resources data available through personal digital assistants (PDAs), interactive pagers and digital phones. For example, last May, SAP announced a partnership with Motorola that enables the PageWriter 2000 interactive pager to cull information from ERP software—including sales automation, financial tracking, medical information gathering and transactional updates from an array of industries.
Virtual meetings are likely to become commonplace—perhaps by strapping on goggles and creating the illusion of actually sitting in the room with colleagues. Smart agents—pieces of software that monitor networks and computers—will automatically sense bottlenecks and trends and adjust or change processes to optimize workflow. And a true electronic environment that doesn’t depend on paper will likely emerge.
What does the future hold for HR and technology?
The 21st century will bring even more technology to human resources. Today’s HR department must reinvent itself on a regular and ongoing basis. As the enterprise becomes more global, new systems and technology will lead to greater collaboration, without regard to political boundaries and language. HR is likely to be at the center of this revolution.
Says Infinium’s Riley, "The importance of human resources is likely to increase by multiples. Only HR can provide the strategic edge that organizations need to manage a workforce effectively. In the end, it is people that give an organization its competitive advantage."
Workforce, January 2000, Vol. 79, No. 1, pp. 38-41.