Setting the standard

Keith Rogers presents a guide to the HR-XML Consortium, which hopes to bring
unity to data exchange within the HR community, and assesses the progress of
its major projects

The consortium

Five-letter acronyms are never attractive at the best of times, but the
awkward name tag of the HR-XML Consortium is at least descriptive. This is a
non-profit group, comprising major software developers and users, who have come
together to develop XML standards to enable e-business within the HR community.

While it sounds horrendously technical, XML (Extensible Markup Language) is
essentially a framework for allowing different computer systems to exchange
data. The XML specification is similar to HTML – the language used to create
web pages – but differs in that it allows data elements to be ‘tagged’ so that
content can be easily identified.

This is essential when information is passed between incompatible systems
within an organisation, or between different companies’ IT systems.

One problem for the IT industry is that numerous different ‘flavours’ of XML
have evolved, driven by the efforts of software companies and specific user
communities. Conscious that these incompatibilities somewhat undermine the
concept of a ‘standard’, industry groups like the HR-XML Consortium are
attempting to bring some commonality to broad business activities.

The story so far

Set up at the end of 1999, the consortium has a small physical presence but
a large and influential backing, counting the world’s largest software
developers, blue-chip corporations and government agencies among its members.

It has already tackled a number of different projects, including interfaces
to payroll systems, a mechanism for transmitting time and expense data between
different systems and setting up eight modules to automate temporary staffing
transactions.

The promise

The consortium has set out to cut the hassle for both HRIT departments and
software developers, recognising that integration between different,
incompatible IT systems is one of the biggest headaches facing user
organisations today.

HR departments typically rely on a range of different systems that have
evolved over time, and maintaining the interfaces between them is a
time-consuming and costly task. Worse, as the HR department seeks to play more
of a strategic role and provide relevant information to managers across the
department, it will need to extract and distribute data from every other
department. And at the same time, it regularly exchanges data with external
suppliers.

In the absence of agreed standards for identifying data content,
organisations rely on building and maintaining ad hoc integration ‘fixes’ or
have to re-key data. The more this data exchange can be automated, the better
for everyone.

By bringing together rival software developers and key users, the HR-XML
Consortium hopes to reach consensus on establishing standards for a wide range
of core HR activities.

Pros and cons

While HRIT standards hardly excite HR practitioners, they do matter because
the benefits can be enormous.

In those areas where it succeeds in promoting widely-adopted standards, the
consortium’s work will allow HR departments to automate more transactional
tasks, thereby cutting costs, reducing human error and freeing-up resource for
more valuable activities.

That said, there are some important technical issues.

At a strategic level, there are some questions about how well XML scales.
According to Dennis Keeling, chief executive of the Business Application
Software Developers’ Association (BASDA), XML messages are verbose – containing
many bits and bytes – and are less efficient than more traditional electronic
data interchange (EDI) techniques. At a more mundane level, not every
administrator in HR or payroll has internet access.

In addition, while it has made progress in developing standards in a number
of areas, the consortium’s presence in Europe is limited.

Although it numbers public bodies in Germany, Belgium and Sweden among its
members, its only real presence in the UK is through the subsidiaries of
international member organisations. As a result, while it has a growing profile
in the US and is frequently referenced by software developers, it’s far less
visible on the radars of UK HR practitioners.

More importantly, regional variations in processes and legislation may make
adoption in Europe slower.

Who’s on board?

Members include major software developers and services providers such as
SAP, Oracle, Peoplesoft, Microsoft and IBM [the latter two serve as both
vendors and users]. Commercial organisations range from the likes of Shell and
BP, to magazine publishers such as Reed Business Information, while government
agencies include employment groups such as the Swedish National Labour Market
Board.

Verdict

Even though its European presence is limited, the backing of the world’s
largest software developers means that the consortium is likely to have an
impact far beyond its US roots in automating basic HR tasks. Standards will
most likely emerge around a combination of specific HR activities [like
temporary staffing] and vertical industries [such as oil and various financial
services sectors]. In the short-term, adoption may be slow – while the logic is
faultless, in the current climate there’s no immediate ‘must have’ factor that
will drive customers to demand HR-XML applications right now. However, over time,
its influence on the HR community could be significant.

The projects

Standard practice

The projects being undertaken by the HR-XML Consortium are primarily based
around specific HR functions such as staffing or time reporting. But while the
group sets out to automate HR transactions wherever applicable, the reality is
that this standard-setting process isn’t suitable for all HR-related
activities.

As Chuck Allen, director of the consortium, acknowledges, tasks such as
checking employee backgrounds or managing stock transactions are
straightforward and low-value, so the adoption of standards to automate them is
relatively uncontroversial. In areas such as recruitment, however, politics may
come into play. As the applicant tracking and job board sectors begin to merge,
for example, suppliers that sell both applications may be reluctant to adopt
standards that allow easy linking to other vendors’ systems.

If the lessons of BASDA are anything to go by, future projects may also be
heavily influenced by specific vertical market initiatives.

Its eBIS-XML standard has been adopted in sectors as diverse as stationery
supply, local government and home construction – and in the latter sector,
everyone from specialist construction software developers to materials suppliers
and house builders have joined the throng.

BASDA’s work with the public sector, prompted in part by the UK Government’s
pending deadline for electronic access to all government agencies, also
demonstrates how high-volume, low-value transactions are ideal for this kind of
open standard. While BASDA has worked with agencies such as the Inland Revenue
on PAYE and Corporation Tax returns, it sees the greatest potential for
eBIS-XML is in public sector purchasing – and in particular, in procurement of
items costing less than £100.

Development of staffing industry standards

One of the consortium’s highest-profile initiatives involves six staffing
organisations – Adecco, Kelly Services, Manpower, Randstad, Spherion and
Vedior.

This group has developed a series of modules rejoicing under the acronym
SIDES (Staffing Industry Data Exchange Standards), designed to help automate
transactions between staffing suppliers and customers.

After joining forces in April 2001, the group donated its draft specification
to the consortium for further development that summer.

The eight initial modules cover many of the basic processes involved in
carrying out a staffing transaction.

The invoice module, for example, transmits amounts billed in a document that
can be understood by both parties. This is a significant resource saving
compared to traditional transactions, where invoice data often needs to be
re-keyed on receipt by the customer because of differences in presentation
techniques and descriptions. The invoice also pulls data from two other SIDES
modules: the timecard, which details time worked and expenses incurred, and the
bill rate, which is one of several key data contained in an Assignment module
that summarises details of each booking.

The remaining five modules consist of:

– Staffing Order – which describes the customer’s need [position, start date
and so on] and typically kicks off a transaction

– Human Resource – a response from the agency that describes what resources
are available [skills, experience, cost etc]

– Staffing Supplier and Staffing Customer – which give core data about the
two companies [eg government ID numbers, payment and billing addresses etc]

– Staffing Action – which provides a communication platform for the duration
of the contract

In addition, future potential modules include post-assignment evaluation,
accounting and payment processes and sub-contractor contracts.

Significantly, the SIDES development leverages the HR-XML Consortium’s other
standards initiatives wherever possible. For example, it builds on the
consortium’s HR-XML Timecard, a "simple but complete" electronic
version of a timecard.

The SIDES initiative also gives some insight into the issues surrounding
multinational XML standards. In an attempt to give it a broad geographical
relevance, the workgroup included representatives from the UK, Germany, France,
Spain, the Netherlands and the US.

Although it sets out to make specifications that are multi-jurisdictional
and cross-cultural, the group acknowledges that this will be difficult for
country-specific tax, labour law and social insurance, and practitioners will
rely on extension mechanisms built into the SIDES specification. It also plans
to translate SIDES into foreign languages where there’s sufficient demand,
using a registry so that semantically-equivalent components can be maintained
centrally across different languages.

Other consortium projects

The HR-XML Consortium currently has a number of projects under development,
including:

– Recruiting and staffing. A working group has developed a staffing and
exchange protocol, a set of XML standards relating to internet recruiting
transactions

– Payroll. Another workgroup is developing a range of payroll-related
interfaces – for example, between the payroll systems and third-party benefit
plan administrators, or for pre-payroll deduction requests.

Initially, the consortium expected to focus on HRMS-to-payroll links, but
most of the required connections have already been developed for the main systems
by application software developers.

– Competencies. This initiative provides organisations with a standard way
of exchanging information about competencies, including the ratings used to
rank and compare them

– Stock. A project designed to build interfaces between an employer and
outside stock plan administrators or brokers to help administer employee stock
purchase plans

– Enrolment. A specification has been completed for communicating employee
enrolment information to insurers, managed care organisations etc

– Cross-Process Objects. Keen to avoid reinventing the wheel, the CPO
Workgroup is developing building blocks that can be re-used in different
integration initiatives

HR has a pivotal role to play in management information

Key players

Working with a small team, director Chuck Allen leads the
evangelical charge for the HR-XML consortium. He is ably supported by key US
personnel at most of the major HR application developers, who frequently cite
the consortium’s work as a highly-influential factor in the development of HRIT.

From the perspective of setting standards, however, in
practice, progress is dictated by the enthusiasm of individual project groups.
The consortium’s initiative for the staffing industry, for example, was initially
established independently by six suppliers, who subsequently donated their
intellectual property to the consortium. It also depends on the willingness of
rivals to work together, both from the IT vendor and HR practitioner
communities.

One consortium project has SAP, Oracle, and Peoplesoft working
with the likes of Charles Schwab, e-Trade and Deutsche Bank to define
interfaces for exchanging employee stock option data.

In the UK, Allen has identified the Business Application
Software Developers’ Association as a key potential partner, but so far
interactions appear to have been limited to exploratory meetings. BASDA has
been involved in XML-based standards definition in several vertical markets,
including house-building and oil and gas, and is also an influential player in
the adoption of standards in the public sector.

The HR contribution

While they may initially be reluctant to play a key role in
what appears to be an HRIT infrastructure issue, HR managers would, at the very
least, be advised to keep HR-XML developments on the IT development agenda,
whether they stem from this consortium or another source. Providing the
infrastructure for data to flow freely around an organisation, and between the
organisation and its suppliers, is critical if HR is to position itself as a
provider of relevant management information.

More importantly, however, users can drive standards
development as much as vendors, and collaboration between peer groups on this
kind of initiative is an effective way of driving down costs in vertical
industries.

Many of the tasks being automated by the consortium are mundane
rather than strategic, and organisations should have little to fear in terms of
losing competitive edge if they jointly tackle XML initiatives with their
rivals. While HR would need a solid business case to justify the decision to
dedicate technical and practitioner resource to this kind of project,
automation of time-consuming transactional tasks is a pre-requisite for HR
playing a strategic role within the organisation.

Useful websites:

www.hr-XML.org
www.basda.co.uk

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