first_imgWhilethe IT sector has had little good news since the internet crash, in HR there isroom for optimism. Keith Rodgers reports on companies looking for systems tohelp them cut costs and get…TEXT:There’s nothing like a deep recession to focus the minds of those in ITmarketing, and the current downturn has certainly made its mark. With hopes ofa recovery in corporate spending dashed in 2002, software vendors are facing upto the fact that 2003 is going to be yet another struggle. Fromthe heady days of the internet boom, where potential counted for everything,sales are now focused on the hard realities of cost savings and businessefficiency. That’s not to say that the next 12 to 18 months will be dull forthe HRIT industry. Products for such areas as self-service and performancemanagement are sufficiently maturing to catch the eye of the averagecost-conscious practitioner.Newtechnical developments that haven’t yet hit the HR headlines – such as thegrowing acceptance of digital signatures – promise to cut yet moreadministrative hassle out of the HR job description. Andemerging business challenges, particularly in respect of contractual workers,are likely to spawn a new breed of application.Butas they assess what the next 12 to 18 months hold in store for the HRcommunity, IT vendors and consultants tend to focus first on the financial andpractical realities. Financially, investment in IT today has to delivertangible returns, measured either in cost savings, productivity increases, moreefficient working practices or better support for management decision-making.Thesecriteria mean that many purchasing decisions will be made from a relativelynarrow perspective – employee self-service, for example, is typically seen interms of the administrative costs it can save, rather than as a platform fornew, collaborative working practices. They also mean that bigger investments –such as building a central data repository to allow for better performanceanalysis and workforce planning – have to be approached from a very pragmaticperspective.Deliveringthe basicsInpractical terms, meanwhile, HR has got to be able to deliver the basics,starting with the core HRMS system. Jason Averbook, director of global HCMproduct marketing at Peoplesoft, suggests that organisations will still need tostreamline their HR foundations in 2003, with a particular emphasis on dataaccuracy and credibility. Just as the finance function is coming under glaringscrutiny, so the HR function will need to ensure that its compliance andregulatory activities are being carried out properly. This may just be a tickin the list of basic requirements for many organisations, but it’s likely to bea core concern for the board.SteveFoster, formerly at KPMG Consulting and recently appointed practice leader atRebus, adds that HR also needs to check that its core HRMS systems are up tothe job. In the mid-1990s, the expectation in HR was that you’d buy a productand stick with it for the next five years. The internet has changed that, andHR practitioners need to be sure that their HRMS system both exploits thecapabilities of the web and provides a suitable platform for them to build ongoing forward.Highon that list of web capability, of course, is self-service. Today, theprinciple of HR self-service is widely accepted in both the UK and the US, evenif companies are in widely varying degrees of readiness and implementation.Typically, organisations have started with relatively basic rollouts – perhapsoffering employees the capability to change their personal details online or,as an incentive to use the system, distributing pay advice. This year, thosecapabilities will gradually be extended at an employee level, and at the sametime, manager self-service will start to take off in the mainstream. MaryKathryn Reese, who heads the Human Capital Management practice for DeloitteConsulting’s SAP Alliance, suggests that this process has four stages ofevolution:–Employee self-service is typically applied to HR functions.–Self-service moves beyond HR itself, becoming a vehicle for better knowledgemanagement across the enterprise and for collaboration between different departments,or even different companies. –Manager self-service begins to climb up the HR agenda. Experts agree that thishas been far less popular than employee self-service until now, partly, saysReese, because the applications have not been rich in capability orparticularly intuitive. That, she argues, is set to change–Manager self-service also moves into the realm of collaboration.Averbookargues that the key emphasis in self-service will increasingly shift fromasking whether it’s being adopted, to ensuring that, as it rolls out, all thenecessary people are pulled into the process. To do this, companies need toestablish which business processes will allow them to reduce costs and focustheir efforts accordingly, ‘market’ the enabling technology to employees toensure the automated option becomes a natural part of daily activities, andwork out how the roll-out will impact on other parts of the organisation – forexample, if an individual makes an online change to one business process, willit have a knock-on effect?Whileself-service provides both cost-savings and a collaborative platform in its ownright, it also has significant implications elsewhere in the HR function. Mostexperts agree the gradual roll-out of self-service and employee portals willalso be a major factor in the adoption of HR data analysis, which is set toclimb from its relatively low levels today. “People are talking about itmore and more – how we are going to prove our worth, and do a bit more thanexpected,” says Foster. “You need a handful of early adopters who cantell a good story – and some US companies are starting to take it onboard,” he says.Gatheringthe dataOnereason for the slow adoption of data analysis in HR has been the difficulty ofgathering the necessary data, which typically lies in a mixture of HR, financialand other operational systems. The major application vendors have pushed a‘data warehousing’ strategy to tackle this, encouraging organisations to builda central repository to collate the necessary information and then use businessintelligence tools to analyse the results. But that task isn’t always easy tojustify from a purely HR perspective. While a number of larger, high-profileorganisations have gone down the data warehousing route, others have preferredto extract specific data from a limited number of operational systems and carryout smaller-scale business analysis.Inthe end, it may be other parts of the business that help provide the answer.Wayne Carstensen, UK managing director of Arinso, believes that datawarehousing will come to the fore in the next 18 months as organisations seekto improve the level of intelligence across their entire company, not just inHR. Customer relationship management or financial projects may drive theinitiative, but HR will benefit. Whatever prompts an increased take-up, thebenefits will be significant. Averbook comments, it means companies will beable to focus less on gathering input as on the quality of the data output.Alongsideself-service and data analysis, IT experts expect a range of other technologiesto come to the fore within the next 18 months, including applications designedto tackle long-standing HR requirements such as competency management andsoftware aimed at newly-emerging challenges.Somedevelopments will arise from steps taken by vendors to fill holes in theirportfolios – Carstensen, for example, argues that multi-jurisdictional payrollwill become a pressing requirement in the coming years. Others will representchanges in delivery mechanisms to overcome HR’s ongoing cost-constraints-e-learning providers, for example, will come under pressure to distributecontent more cheaply. Then there are the technological advances that will beginto have a bearing on the HR function. For example, Reese suggests that wideracceptance of electronic signatures will allow HR to reduce levels ofpaperwork, cutting the signed hard copies typically required to back-up e-mailand other electronic communications.Thisis not just a technology issue – like self-service, it’s also a matter ofembracing new forms of verification that require a higher degree of trust inemployees.Knowyour workforceReesealso suggests that software vendors will start to release more products to helpcompanies understand their contingent workforces. In the Harvard BusinessReview last year, management guru Peter Drucker pointed out that a”staggering” number of people who work in companies are no longertraditional employees – companies either employ temporary workers directly, oroutsource large chunks of their business altogether. As Reese argues,understanding these members of the extended workforce – where they work, howmuch they’re paid, and so forth – is becoming ever more important.Competencymanagement is also rising up the HRIT agenda. Long a bugbear for HR, Carstensenreports that increasing numbers of companies are now acknowledging that theycan’t avoid the issue much longer. Historically, the biggest barrier tocompetency management has been the sheer scale of the task – defining a coreset of common competencies is a headache in itself, and that’s beforeorganisations attempt to persuade line managers to start the process ofevaluating employees against those ‘standards’. Averbook suggests, however,that the process could be kick-started as organisations start to carry outperformance reviews online, a process that will automatically begin to collatethe core data required. Competencyprofiling also feeds into a broader requirement for effective resourcing.Companies require a better understanding of their workforces’ skillsets andwhether they they’re deploying their human capital assets to the best effect.The applications that support this kind of analytical exercise stretch fromspecialist recruitment software to the planning tools that allow companies to drawup a talent management strategy.Thiskind of interaction between different HRIT applications suggests thattechnology may at last be catching up with the long-standing strategic demandsof HR. The concept of ‘joined-up HR’ may be somewhat hackneyed, but the realityis that very few organisations today can claim to have integrated the coreactivities that form part of a human capital management strategy. Aligningcorporate objectives with departmental and individual goals, including inincentive systems, measuring performance and rewarding on the back of thatmeasurement, is a loop that makes perfect sense in theory.Inreality, it is only now becoming achievable as the different components areautomated and integrated. There is no easy way for the technology industry tomake joined-up HR a reality, but the foundations are falling into place andwill support the trend in the coming years.Keyfactors in self-service–Establishing which business processes will allow them to reduce costs and focustheir efforts accordingly.–‘Marketing’ the enabling technology to employees, ensuring that the automatedoption becomes a natural part of an individual’s daily business activities. –Working out how the rollout impacts other parts of the organisation. If anindividual makes an online change to one business process, for example, doesthat have a knock-on effect on another? Comments are closed. 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