Biggest Expenditure
Today, experts say, organizations need to go beyond automating traditional HR processes. Even with investments in automation and operational efficiency, people remain the biggest cost for most organizations, says chairman and CEO of Plateau Systems, Paul Sparta. To further drive business performance, organizations must take a business operations-centric approach to managing people to increase workforce productivity and improve business performance.
Sparta, whose company provides learning and performance management systems, says an approach centred on business operations requires organizations to:
• Assess and track skills and capabilities across the enterprise.
• Develop capabilities based on job performance requirements.
• Manage individual performance by assessing employee skills, identifying future development opportunities and aligning results to organizational goals and performance metrics.
• Deliver just-in-time content directly to the operating workforce.
• Match people to the right jobs, at the right time, at the right place to maximize business results.
And enterprise-wide adoption is critical. "When you implement this technology, the wider you use it throughout your company, the more value you get out of the software," Cohen says. "If you do learning management for one little department then the number of employees that you can substitute for a position or cross-train is very limited, so a lot of companies that implement in one area see very little return on their investment. This whole technology's value comes when you open it up to the whole company and the smarter companies open it up to their vendors and their customers."
Recipe for Conflict
Unfortunately the issue of workforce management frequently turns IT and HR into adversaries, as the HR team lobbies for "user-friendly" against IT folks pushing "easy integration".
"It is not unusual for human resources, the IT department and corporate executives to have entirely different ideas about which system is best and what approach to take," Ed Newman, president and founder of The Newman Group, a US consulting firm, told the Workforce Management Web site last year.
HR tends to favour functionality, speed and performance, Newman said, while the IT department weighs compatibility, ease of integration and its ability to support the application. Other executives sit somewhere in the middle, arguing for efforts to leverage existing enterprise technology investments. Not surprisingly, cost and compatibility often win out as the organization ends up favouring the more basic functionality that comes with an enterprise resource planning module or human resources management systems over niche or "best of breed" solutions that tend to be seen as luxuries.
The end result is an organization that could compromise its ability to achieve recruiting success. "It is possible to wind up with different factions that do not understand the functional and strategic issues," says Tedd Long, managing consultant and director of human resources technology at US consulting firm Findley Davies. Ultimately, "a company can spend a lot of money and time putting an application in place that isn't right for its needs".
Smart CIOs, Cohen says, are asking questions about how the organization can exchange information between the HR system and the company's learning management system, for instance, and between those systems and the company's ERP system. "What the CIOs are looking for are things like Web services or service oriented architecture to let them integrate multiple applications and move data back and forth without the need for a custom-built interface, and without having to invest huge amounts of time on implementation.
"I typically find the CIO getting involved for a couple of different reasons," Cohen says. "First, during the selection process, they are very focused on the type of technology the system is using. If it is a smart CIO, it is because they want to be able to use the data from the system and combine it with data from other systems to draw conclusions about the business performance. They also want to know whether or not [the software is] scalable and what hardware it runs on. From the technology side, J2EE versus .Net is the biggest discussion."
Web-based technology is necessary to integrate applications and enable browser-based access any time, any place, from any Web device. The system also must have very robust role-based and domain-based restrictions to protect private employee and company information, but CIOs currently struggle to reconcile competing priorities.
"The ability to exchange data and to be able to define the rules for moving the data around are the single biggest things CIOs are concerned with right now," Cohen says.
"When you look at the market, anybody who delivers enterprise applications has essentially used J2EE - Siebel, Oracle, what used to be PeopleSoft - but then inside of companies the fastest, easiest way to link these applications together is the .Net framework. We're seeing more and more of that, and then the thing that ties them all together is this idea of Web services to extract data from one system and put it in another." (For more on the relative merits of J2EE and .Net, see "The Twain Shall Meet", below.)
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