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Technology
is plays an important role in HR, but what are the next big initiatives? Keith
Rodgers asked five software specialists to outline how advances in IT will
impact on HR professionals

The software industry is notorious for developing applications way ahead of
the business community’s readiness to implement them, and IT in HR is no
exception. Concepts such as employee self-service have been touted for years,
yet it’s only comparatively recently that applications have begun to be adopted
by mainstream users. Take-up of several other technologies, such as strategic
HR analytics or e-learning, still lags some distance behind the marketing hype.

Predicting the next trends in HRIT is an odd mixture of the familiar and the
new. The next ‘big thing’ in some areas of HR is not the emergence of new
initiatives, but the adoption of technologies that are at last beginning to
mature. The key questions are: can the IT developer community meet user
requirements in these areas – and are the conditions right for users to take
the plunge and invest?

What is clear, is that the HRIT software market reflects the development of
the HR industry itself, as it moves from its historical focus on administration
to a strategic role at the frontline of business.

Automating or outsourcing basic process tasks is just the starting point:
real value is being delivered through new ways of interacting with employees,
capturing their knowledge, measuring their performance and capabilities and
feeding that back into the business to create a cycle of perpetual improvement.
Getting a basic task such as payroll right is still critical, but undertaking
predictive workforce modelling is the kind of area where competitive edge can
really be gained.

Personnel Today asked five senior representatives of major software vendors
to map out their vision of the future of HRIT in six key areas: eHR, HR
processes, knowledge management, training and learning, analytics and HR
integration. While there is common ground in some basic assumptions about the way
the sector will evolve, perceptions differ significantly in several key areas.
In part that reflects the different positioning of major software vendors, but
it reflects more advanced take-up in the US compared to Europe, and it
reinforces the varied evolutionary pace of the industry itself.

The HR Software Show takes place 26-27 June 2002 at Hall 1, Barbican
Centre, London.

eHR

Michael
Blair, CEO, Cyborg Systems (US)

The biggest
challenge is the change management process – getting employees, managers and
executives to rethink. In self-service, most companies are well into
implementing the basic ‘name and address’ type changes. Now, they’re doing more
strategic things such as management reviews and approvals, so they can push out
to the line managers. Portal capability is now almost a requirement.

Joel
Summers, senior vice president, human resource management systems development,
Oracle (US)

We’ve been talking about self-service
for years, but the internet has now provided the capability. In the old days it
was employee-oriented – now it is rapidly moving into the line manager arena, and
that’s a critical aspect. Self-service has to succeed for analytics to succeed.
Analytics are only as good as the data – if the data’s not accurate or timely,
then it’s the old ‘garbage in, garbage out’ story. And portals are the key to
making analytics successful, delivering analytics to managers, to c-level
officers – delivering information on a daily basis. The portal is what makes
sense of it all.

Liz Wilson, HCM strategy manager
EMEA, Peoplesoft

We still
see a slightly muddled view as to how users are going to deploy their
enterprise portals. There’s some confusion about how an employee portal could
sit under an umbrella portal for the enterprise [incorporating customers,
partners and suppliers]. If the employee portal is already integrated with the
HR database, that’s a big advantage – if anything’s going to stop the
deployment of portals, it will be when organisations have to do the integration
with the back-office themselves.

Mark
Bardoe, marketing director, meta4

A
year ago, it seemed 85 per cent of vendors were talking about eHR. When I
looked at the number of companies doing it, a lot were experimenting, but there
wasn’t wholesale adoption. What’s driving a lot of sales now, is the need for a
clear return on investment. I think employee portals are the next big thing. HR
is not driving the adoption of enterprise portals, but once companies start
building them, they will realise HR should be integrated first.

Sherry
Olson,group product manager, human resource management, Microsoft Great Plains
Business Solutions (US)

The
next big move in self-service will be to extend it out to the rest of the
organisation. It’s not just an application for HR, it will be a source of
analysis for the rest of the organisation. Specifically, it will fully equip
managers with their own, personalised portals to manage their direct reports.
Another big trend will be to allow suppliers, partners, vendors, retirees,
contractors and other external users, to have access to the information.

HR
process

Michael
Blair, CEO, Cyborg Systems (US)

These
administrative functions have to be done. The closer you can integrate them to
the rest of your web strategy the better. There’s a lot of value in putting
payroll advice on the web for people to look at. The ideal is to take the
administrative functions and have them work seamlessly with the rest of your
portal and web strategy. The danger is if companies have, say, an isolated
payroll system and keep it – that strategy will probably cause problems.

Joel Summers, senior vice
president, human resource management systems development, Oracle (US)

There’s a huge emphasis on
globalisation. The CEO wants to see what the global headcount is, and global training
is a key aspect of the process. In terms of trends to or away from process
outsourcing, I’ve been in this business 25 years and I call it breathing:
Outsource, insource, outsource, insource…

Liz
Wilson, HCM strategy manager EMEA, Peoplesoft

You
certainly want to have these processes more automated. In terms of outsourcing,
there’s no huge trend one way or the other. Payroll is one area that’s
traditionally been outsourced, but some companies this year have moved from
outsourcing to insourcing. There are two factors here – cost and ease of
reporting.

Mark
Bardoe, marketing director, meta4

HR
tends to be 80 per cent the same wherever you go in the world – but there is no
such thing as global HR. So outsource it – let someone else deal with
multi-jurisdictional payroll. I don’t view functions such as time and
attendance as strategic HR applications.

Sherry
Olson,group product manager, human resource management, Microsoft Great Plains
Business Solutions (US)

Process-based
technologies can give a competitive edge if they complement existing
applications and can be seamlessly integrated. 
There will be competitive advantages realised by vendors who are able to
blur the line between on-premise and off-premise HR functions to offer
customers options on deployment.

Knowledge
management

Michael Blair, CEO, Cyborg Systems
(US)

This is a
key component of any analytics strategy. Some early KM systems were one-off and
isolated, and since they didn’t have all the data that was in the organisation,
there wasn’t much knowledge to manage.

Joel
Summers, senior vice president, human resource management systems development,
Oracle (US)

There are two areas – in vitro and in
vivo. In vivo is knowledge you carry round your head. From the HR perspective,
in vivo has been the key focal point. But now there is a need to capture
knowledge and transfer it into different media. The question is who is going to
own in vitro knowledge management?

Liz
Wilson, HCM strategy manager EMEA, Peoplesoft

The issue
is how quickly organisations can get to the information. If you have easy
access to your own website, maybe you don’t need a KM system – if you’ve got a
good search engine, you should be able to find the information. We see it as a
part of learning. It should encompass every type of learning, not just online
courses or classroom-based training – it could be access to a journal over the
web.

Mark Bardoe, marketing director,
meta4

KM
is a very confused market – it hasn’t taken off in the way people expected. But
in certain areas we’re really getting excited. KM in the portal environment is
really going to help create the business case. Where people find a clear ROI is
in areas such as indexing expertise and internal rating of knowledge.

Sherry
Olson,group product manager, human resource management, Microsoft Great Plains
Business Solutions (US)

Flexibility,
communication and information could define the evolving organisation. More than
ever, businesses are interdependent and will collaborate through business
networks. Internally, business organisation will become more informal with
blurred boundaries between departments and tasks, with administrative tasks
slowly disappearing.

Training
and learning

Michael Blair, CEO, Cyborg Systems
(US)

Because of
the economic slowdown, some companies said they were just not going to spend on
training. But by implementing good e-learning, customers have saved a fortune
in terms of what they used to spend. It is becoming critical – the workforce
has to retool every year because of technology change, and you need a good
ongoing learning process for employees.

Joel
Summers, senior vice president, human resource management systems development,
Oracle (US)

Blended learning is the most
important thing. There’s instructor-led and technology-led learning, and I have
to have them together. If I’m a learning 
management vendor, I’m not so focused on employee development, I’m providing
learning. If I’m HR, I’m focused on the development of the workforce.
Therefore, the key is blended learning – the results have to come back into HR
for competency assessment, for training plans and so on.

Liz
Wilson, HCM strategy manager EMEA, Peoplesoft

Enterprise
learning is not just about employees, it is for anyone who’s interested.
Customers may need to learn about products, while partners and suppliers need
to have learning experiences. Take-up of learning management systems is to do
with the integration of different types of learning, the ease with which people
can access information, the relevance for them and how learning can be tied to
business objectives.

Mark
Bardoe, marketing director, meta4

The
cost argument in e-learning is superb. There has never been a very high level
of satisfaction with it – for effectiveness, it’s been a mix of e-learning and
traditional methods. But people are a lot more comfortable learning through
technology now – I think it will take off.

Sherry
Olson,group product manager, human resource management, Microsoft Great Plains
Business Solutions (US)

E-learning
adoption will accelerate for Fortune 1000 companies as they look to educate a
global workforce while trimming test and evaluation expenses to help the bottom
line. Smaller companies will begin investigating the e-learning market over the
next year or two. But until the cost of deploying and maintaining e-learning
content decreases, these companies will be more reliant on self study, e-mail
and local learning opportunities to educate their workforce.

Analytics (data
analysis)

Michael Blair, CEO, Cyborg Systems
(US)

It is
beginning to happen, the tools are certainly there. It’s about getting the data
organised and getting data from outside the organisation. You do get into a
chicken and egg situation – you need the processes to get timely data to
analyse, but you need analytics to figure out what processes to focus on first.
You’ve got to get corporate strategy agreed on – that should set the direction
for HR. If you’re not plugged in with the business goals and objectives, your
strategy won’t be effective.

Joel
Summers, senior vice president, human resource management systems development,
Oracle (US)

The words ‘daily business
intelligence’ are very important – so you can see what’s happening today.
Drill-down by manager is also a key aspect – if you really want the
information, you also want accountability and responsibility. The key to
success will be publication through the portal – get it on the desktop and they
will use the data.

Liz
Wilson, HCM strategy manager EMEA, Peoplesoft

We’re
expecting gradual adoption – a lot of organisations haven’t got the basic data
they need before they put in the analytics. Compensation planning is a huge
area – there are so many variables, you have to have really good analytical
tools to do scenario planning. There are two ways of looking at it: the
operational view of retention, for example, and the strategic perspective,
which is saying, ‘what can we do proactively to stop increases in staff
turnover?’ And HR analytics shouldn’t be seen in isolation. There’s an awful
lot of useful information coming out of customer relationship management, for
example, that HR can use.

Mark Bardoe, marketing director,
meta4

The
software market was very much ahead of users, particularly in terms of
benchmarking, organisational effectiveness and performance management. I
thought that would drive the growth of HR metrics, but HR doesn’t seem to have
the power in some organisations. I think it will change when it incorporates
empirical data from outside the organisation – the larger an organisation gets,
the more it will look at key indices of performance. Only when it starts
proving its value will companies start implementing it.

Sherry
Olson,group product manager, human resource management, Microsoft Great Plains
Business Solutions (US)

HR
analytic software, and analytic software in general, is not easy to use. With
workforce expenses being the number one liability on any company’s balance
sheet, operational and strategic HR analytics will emerge as key data points in
overall business performance. The HR department needs to identify other
departmental key performance indicators 
(for example, finance and IT) and draw correlations between HR-specific
key performance indicators that  relate
directly to business performance.

Integration

Michael
Blair, CEO, Cyborg Systems (US)

Being able
to seamlessly move information around is critical. That’s why people are
excited about things like XML that give standard, open ways to move information
and data around. The global non-profit HR/XML Consortium [an organisation
comprising HR vendors, end-users and job boards] is trying to do that for the
HR community.

Joel Summers, senior vice
president, human resource management systems development, Oracle (US)

The integration we look at is the
integration of information. Open interfaces are an incredibly important part of
information exchange, and XML is one of the most strategic areas of
cross-system integration. There’s a feeling that companies have done a good job
of integrating processes. But what I’m hearing is pressure for higher levels of
information in organisations – for example, knowing employee spend on an
ongoing basis. The drivers for integration are the highest-level executives and
managers in the organisation, but I think it is something that HR professionals
have been asking for.

Liz Wilson, HCM strategy manager
EMEA, Peoplesoft

If HR is
going to move into a strategic role, it has to have basic information
available. There have to be accurate facts and figures on the organisation –
and HR won’t get them unless there is an integrated view.

Mark Bardoe, marketing director,
meta4

When
you talk about classic HR process optimisation, those processes haven’t
changed. But we’re beginning to find companies not just looking at HR
processes, but at things like employee retention. As we’re integrating those
processes, HR seems to step outside the classic enterprise resource planning
boundaries. Now, the new processes for business improvement are enterprise-wide.

Sherry
Olson,group product manager, human resource management, Microsoft Great Plains
Business Solutions (US)

Enterprise-wide
integration is strategically crucial for HRM to broaden the functional
footprint across the organisation. Traditional silos are going away and
databases need to support workforces as they become more agile and reporting
lines become more transparent. This raises the need to integrate human resource
and payroll data, such as skills, resource availability and costs, as well as
front office applications like customer relationship management and personnel
services automation.

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