Focus on making employee data pay - human resource information systems - Brief Article

Timid about breaking away from tried-and-true applications? Get bolder or be Left behind as technology accelerates.

Human resource information systems practitioners will need to take a risk in the new millennium. When planning your next system, don't benchmark other companies.

If you benchmark, you copy. If you copy, you follow. If you follow, you don't lead. And if you don't lead, your company or organization will not be competitive.

Today, most HR systems come from PeopleSoft, SAP and others that offer the same basic core functions - a cookie-cutter commonality, says Jenni Lehman, HR technology consultant at the Gartner Group in Stamford, Conn.

"Companies don't need to do what everyone else is doing," she says. "They need to respond to their own specific problems."

So, what gets in the way?

"HR people are risk averse, and HRIS people are the most risk averse," says John Sullivan, professor and head of the HR program at San Francisco State University. "They need to take a risk and do it a different way. Don't benchmark. Don't copy everyone else. You'll never be a leader."

In defense of HRIS folk, experts note that the Y2K computer problem has overwhelmed nearly everyone. At the same time, the HR software landscape is pockmarked with more vendors and applications than ever, causing confusion.

"It is much more difficult for HRIS people now because they have to look at the functionality of the application, rather than fall back on their single vendor," says Gary Durbin, chief technology officer for the HR division of Redmond, Wash.-based Concur Technologies Inc., a developer of web-based HR applications.

For Maximum Impact, Link Databases

A growing number of experts believe HR processes and systems must change. HR staffs are sure to shrink as a result, but the other option is to resist the changes and watch another department, such as information systems, take over HR processes because HR people refuse to budge.

When Sullivan looks at Silicon Valley companies like Cisco Systems, Hewlett Packard and Sun Microsystems, he sees organizations that understand that HR systems must provide self-service tools for workers and managers. Those tools allow workers to learn from each other and are available from different delivery systems - from phones to desktop computers to handheld computers.

These companies outsource payroll, benefits and other transactions. In-house, they link databases through data warehouses and new directories. They make extensive use of the Internet to push HR data and applications to the people who need them most, especially managers. And, they deliver these tools when people need them and with built-in expert advice to help people use them.

These tools provide forecasts and help executives more effectively manage their workforces and knowledge resources.

Cisco, for example, ties together its sales and recruiting databases, says Sullivan. The link lets the system alert recruiting managers when sales are going up so they know that they may need more sales hires. Sullivan hasn't seen another company doing this.

"Cisco and others have learned how to do really good HR without seeing people face to face," Sullivan notes.

Strategic HR vs. Transaction Processing

The new millennium will need more than new technology to handle new ways of thinking. When planning HRIS, too many companies merely move the old paper-based process to an electronic one without rethinking the entire process, says Ian Turnbull, a consultant in the Toronto office of CSC Pinnacle, a consulting firm.

"That's why major systems implementations often fail," he says.

Rethinking HRIS now includes looking at the world in terms of tactical and strategic HR applications. When HR consultants speak of tactical HR applications, they typically mean transaction processing for payroll and benefits administration.

Strategic HR applications are different because they contribute in some way to the employer's bottom line, besides simply reducing costs. "It can be something as simple as helping you lay out a complex project with a lot of knowledge workers," says Michael Campbell, general manager for the HR business at SAP Americas in Newtown square, Pa.

Transaction processes are candidates for outsourcing, experts say. It's time to let go of these because you can't improve them any more, they argue. The day will come at most companies when it won't make sense to expend their own resources on transaction processing, says Jay Stright, executive director of management consulting at AGConsulting in San Francisco.

If you can't improve something, outsource it, he urges. Then direct the extra resources to building and maintaining systems that help the company more effectively acquire, develop, support and manage its human capital.

Those systems and the information they manage affect the employer's bottom line. Stright sees an increasing demand from CEOs for HR to provide a return on investment, or ROI.

"The money they [HRIS] spend to build and maintain systems will have to show huge ROIs," he predicts. Stright says one area ripe for large ROI is manager self service for various applications.

Once HR transaction processes are outsourced or pushed to employees and managers through self service, then HRIS can focus on strategic applications that will make their organizations more effective and more competitive, especially in knowledge management and workforce planning.

Knowledge management means getting the right information to the right people at the right time. Few companies have learned how to catalog all the accumulated knowledge in an organization, warehouse it, manage it, share it, push it to the right people at the right time and retrieve new knowledge as it is accumulated.

Workforce planning supports executives with databases of competencies - information such as who has what skills and where and when those employees are available - and forecasts of needs based on production outlooks.

Turnbull and others say they hear lip service paid to new ways of thinking about HR and the technology to support new processes, but apart from companies like Cisco, Federal Express and a handful of others, they see few efforts.

There's no shortage of opportunities. As more manufacturing moves offshore, North American companies are becoming increasingly knowledge-based. That fact provides HRIS practitioners with opportunities to give CEOs and vice presidents new tools for managing knowledge and knowledge workers.

"HR has not taken what should have been an obvious leadership role in this area. They have dropped the ball," says Naomi Bloom, an HR consultant with Bloom & Wallace in Fort Myers, Fla.

Research is available to show HR professionals how to take the lead on knowledge management, and there's technology to help them, but no strategic HR tools are widely adopted, Bloom says. HRIS practitioners don't understand the profound changes coming in corporate America that will demand new thinking about HR, but HRIS practitioners will be forced by those changes to change themselves, she adds.

High-Tech Trends to Watch

As strategic applications advance, HRIS professionals will need to know which technologies and trends will help them move forward in the new decade. HRIS will deal less with transaction processing and more with squeezing maximum value from information by helping systems talk to each other and letting users pull data from different systems easily.

Take a look at the following trends:

* The database. All the time and money put into databases over the past 10 years wasn't for naught. If HRIS people already converted to modern client-server-based relational databases, no one expects them to spend the money to convert again.

New applications are and will be bolted onto existing systems. Middleware - software that communicates among various applications - is getting better. Data warehouses help pull down data from disparate systems into a single repository for HR applications.

The HR database is just a convenient way to store information about employees in one place. But it's getting harder to distinguish between the customer information system and the employee information system. A salesperson's monthly quotas and actual sales are probably on the customer information system, but they also may need to be in the employee information system to allow compensation calculations.

"In the future, data about the employee will be stored where it is appropriate," says Lehman. Data will be linked via a warehouse or through a directory.

* The World Wide Web. HR departments were among the earliest to adopt simple web pages. But if they're not moving to use the intranet and Internet for self-service applications, they're falling behind. "The web is a relatively cheap mechanism to do anything," says Sullivan.

The value of the web should not be overstated or understated. It is simply a better mousetrap, an industrial-strength and ubiquitous network that extends HR data and self-service applications to employees and executives. The real issue is what kinds of data and applications the HR department delivers over the Internet and intranets.

* Lightweight Directory Access Protocol. LDAP is a client-server protocol for accessing a directory service, from e-mail addresses to online directory services. It initially served as a front end to the more commonly used X.500 directory protocol, but LDAP can be used with stand-alone and other kinds of directory servers.

LDAP can provide a single Interface to all kinds of information in different databases. It can provide a single log-on to the entire network and can control access to different databases or a data warehouse. As more employees go to the corporate intranet for HR applications, LDAP will become more important to HRIS.

LDAP is a simpler protocol to implement than X.500 and can more easily evolve to meet Internet requirements. The LDAP model is based on an entry, which contains information about some object, such as a person. Entries are composed of attributes, which have a type and one or more values. Examples of attributes are ASCII strings, JPEG images and web site addresses. A systems administrator can make needed changes in just one place - the LDAP directory - rather than in several directories.

Federal Express, in Memphis, Tenn., is rolling out an LDAP directory. "We're doing employee self service through an LDAP directory, not through the HRIS," says Jim Candler, vice president of personnel systems.

In an LDAP directory, every application can be given the same look and feel and accessed through the same interface, the web browser. "This is a much more natural event for the employee," says Candler.

* Voice recognition. Some experts believe an even more natural event is to bypass the browser entirely. Voice is the most natural interface, says Bloom, who believes voice recognition soon will be good enough to replace the desktop computer's graphical user interface.

"Five years from now we'll laugh at how short a life span the web browser had as an interface," she says. Many HR systems already use interactive voice response to allow employees to interact with a system using the dial pad on the phone for specific responses. Interactive voice response also makes self-service applications available to workers who don't have a computer.

Voice recognition has the potential to let the user speak to a system over the phone or via a microphone hooked to a computer. For example, E*Trade, the online stock trading company, has a voice-recognition system that lets clients buy and sell stock by talking directly to the system without using a computer keyboard or a phone dial pad.

* Component-based software. The industry is just beginning to see the emergence of component-based software. Tomorrow's most flexible systems are based on components, objects and object-oriented architectures. Think of them as Lego blocks for building software.

"Components are objects and processes that solve specific business problems," explains Lehman, who believes component architectures are only five years away from becoming widespread.

Each object needs an agreed-upon definition. The object "employee," for example, might include name, age, gender, date of hire, home address and other personal details. In a component-based software architecture, the individual pieces can be written separately, upgraded or swapped out completely because they have an interface that allows them to interact with the other components in the system.

Bloom believes the component model is going to have a major impact on HRIS, but she sees a few hurdles. There's no industrywide agreement on the definition of components, and the bigger vendors have no vested interest in working together to help define them. Even within a company, two or more executives might have different definitions for an object. Bloom has developed and licensed an HR object model and is trying to get an industrywide effort under way to work together on defining the more common objects.

* Expert systems. If managers are going to do more HR processes, they need a set of tools different from what they have today. They need training, and they need information that helps them get the job done. Technology can support self service with embedded intelligence.

Bloom cites the example of web-based book merchant Amazon.com. When a regular user signs onto Amazon.com, the site advises the visitor on items that might be of interest, based on that user's previous purchases. Expert or intelligent self-service applications similarly would offer managers or employees information they might not even know they need.

"If we don't have our business applications working at least as well as Amazon.com, shame on all of us," Bloom says.

Expert systems can help only if they contain the information necessary to assist users. If a manager must put together her own hiring offer, where does she find the rules for compensation, relocation and other details? "We have to put that into our systems or we haven't accomplished anything," says Bloom.

* Old ideas reinvigorated. Some technologies HR might find useful in the near future aren't new, but they are becoming financially feasible.

Video conferencing, around since the late 1950s, will become increasingly cost effective as we move into the new decade, Turnbull points out.

Flat-panel computer screens have existed for several years, but as with every aspect of computer hardware, now they're coming down in price. Robert H. Stambaugh, a strategic HR consultant with Kapa'a Associates of Kekaha, Hawaii, foresees the day when flat-panel screens will replace the white board in most corporate meeting rooms and executive offices.

When that happens, "To get the executives' attention, HR professionals will have to know what data to present and how to present it," explains Stambaugh.

If you've read this far, you should have some ideas about how to do that.

Bill Roberts is a freelance writer based in Los Altos, Calif., who covers business, technology and management issues.

COPYRIGHT 1999 Society for Human Resource Management
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