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Human resources software plays an increasingly important role
in fueling enterprise productivity and cost cutting. A successful
transition to automated processes requires vision, technology and
a thorough understanding of the costs and return on investment.
Mike Williams has witnessed a revolution. Over the last few years,
he’s watched tried and true methods of doing business chucked
aside in the pursuit of new technology and business processes.
And, from his vantage point as senior vice president of human resources
at TransAlta Corp., a $1 billion Canadian power producer and reseller,
it’s happening none too soon. “Today’s technology
is fundamentally changing business for the better,” he says. “It’s
transforming human resources into a more valuable and strategic
entity.”
In the quest to achieve success, Williams is leaving no stone
unturned. Since installing an SAP R/3 enterprise resource planning
(ERP) system in 1998, the company has migrated from paper to pixels;
and from hands-on to hands-free. Today, employee self service and
managerial self-service automate a wide array of processes, including
recruiting, hiring, benefits administration, payroll and reporting.
And, make no mistake, the results are impressive: TransAlta has
trimmed transactional activity by 60 percent and reduced HR administrative
staff by about 55 percent. The annual savings? More than $800,000.
Yet, like many companies, TransAlta isn’t standing still.
It is now in the process of adding a sophisticated performance
management module and eyeing several other upgrades and additions.
The company’s eventual goal is to use automation and workflow
to fully embrace the bold new world of eHR.
Observes David A. Link, a vice president at Baltimore-based consulting
firm Cedar: “Organizations now recognize that they must improve
the level of service that they deliver internally. Tools such as
self-service and portals are here to stay.” Adds Edward Jensen,
a partner in the human performance practice at business consulting
firm Accenture: “The ability to deliver services to employees
and managers through the Web is radically redefining the role of
human resources.”
Achieving success is no simple task, however. First, there’s
the challenge of understanding the value and ROI for various systems
and choosing a technology path. That requires input and analysis
from human resources as well as the finance department. Then there’s
the task of installing and integrating applications, as well as
the hardware that drives performance. Finally, there’s the
ongoing challenge of reengineering business processes and training
workers to use these new systems.
Says Andrea Yowman, Global Director of Human Capital Management
for SAP: “Companies are only beginning to realize how HR
can assist in measuring and articulating the impact of a workforce
on business.”
Revving Up Results
The
idea of eliminating administrative overhead and crumpling the inefficiencies
of paper are nothing new. For years, human
resources applications have focused on cutting costs and streamlining
processes. But more advanced applications and features are ratcheting
up the stakes—and providing human resources with the tools
to become far more strategic…and valuable. In this new
world order, HR applications carry as much value and cache as
any sales database or customer relationship management application.
According to Link, today’s HR applications typically
focus on three areas: employee productivity, manager productivity,
and attracting and retaining talent. Employee-centric applications
include records updates, benefits selection, training, payroll
data, travel and entertainment (T&E), and access to handbooks,
directories and news items. Manager-focused applications
center mostly on compensation, evaluations, transfers and
vacation
scheduling. Recruiting, performance management and succession
planning tools automate many of the tasks associated with
finding, hiring and maintaining a workforce.
Recently, many organizations have begun to interconnect applications
and processes in order to eliminate islands of automation,
says Jim Holincheck, a research director at consulting
firm Gartner, Inc. That’s making it possible to tap
into HR data at an enterprise level and plug in financial
and operations
data to make better decisions within the HR department.
In
many cases, ERP applications along with bolt-on best
of breed products are helping create a seamless data environment.
That’s certainly the goal at Trans Alta, which has 2,500
employees spread across North America. “We have focused
all core business processes around SAP,” Williams says.
By integrating systems we’re able to get rid of the paper
and manual processes that bog things down.” In some instances,
transactions that previous took hours or days are now completed
in minutes. Yet, in addition to the enormous cost savings,
the company has realized gains that extend beyond dollars and
cents. “The sytem is allowing managers and others to
engage in more strategic work,” he says.
For example, when the company began examining salaries and
conducting comprehensive compensation planning last year,
managers could analyze reams of data without poring over
an endless array of spreadsheets. “They could look at how each individual
or group of employees affected budget planning on a dynamic
basis,” Williams explains. “With the ability to
view the entire organization, we were able to eliminate the
drift that’s usually associated with the process.
We came within $500 of budget.”
Such impressive results aren’t the exception, they’re
increasingly the norm. Once business leaders, including finance
executives, understand how today’s information technology
crosses departmental lines and blurs roles and responsibilities,
it’s possible to design systems that flex the organization’s
muscles. At that point, “It’s about putting the
various pieces of the enterprise technology puzzle together,” Link
says.
ROI Infographic
-
76% of IT execs believe the pressure to measure intangible
benefits
has increased.
- 73%
of CIOs don't calculate ROI on projects after they're
completed.
- 70%
of companies find it difficult to calculate ROI.
-
44% of the results of ROI calculations are subjective.
Source:
CIO Insight
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