Maximising HR`s evolution

Managing people effectively and incorporating human resources (HR) into holistic enterprise stratagems are necessary for the operations of the most profitable organisations, and today IT systems are poised to deliver solutions on these latest trends in the industry.

HR is no longer merely a payroll and administration system, storing employee records obscurely and automating arduous tasks like payslip generation. The enterprise has come to realise the data stored in these systems can be far better utilised by opening it up. Making it more accessible to analytical engines and the workforce creates tangible business benefit by empowering better decision-making and future planning based on the wealth of information available.

We recommend a phased deployment.

Riaan Greef, business development manager, Axapta

The IT element of HR has evolved far beyond its payroll roots. Today an effective HR solution combines modules focusing on personnel management, skills development planning, and recruitment strategies incorporating e-recruiting methods. Adding these modules on top of the employee information repository and base of automated processes that form the payroll fundamentals allows HR to become a strategic play in driving increased competitiveness.

Rob Bothma, divisional manager of the Q Data Dynamique competency, which forms part of the Business Connexion (BCX) enterprise offering, says: "Really, the whole change in structure organisations are undergoing today is being driven from an HR perspective. What`s helped this enterprise division a lot is the fact that much of what they do is today demanded by legislation. This has moved the role of HR from an administrative function to a key, high-level boardroom strategy."

Rob Cooper is a director at payroll-focused software concern Softline VIP, as well as chairman of PAG (Payroll Author`s Group). He says: "During the 90s, companies began to realise that labour legislation was no longer going to be the toothless force it was historically.

"Since the payroll system at the time held all basic employee information, it was a logical extension to fully integrate this with an HR system cognisant of this shifting legislative environment."

The morphing modern business structure and new legal requirements have driven HR systems from a back-office accounting process into an analytical role integrating automation, self-service and efficient internal communications all in line with the future directions of the enterprise.

These back-end transactional systems have become the basis for a new breed of HR value-added components.

Adam Sentonaris, SAP Africa HCM solution manager, comments that the technology is merely the tool, the vehicle through which higher operational efficiencies and superior planning through better informed management decisions can be achieved.

He explains his view: "The real benefit of HR today is in the strategic insight and foresight into the future of the business. It`s giving HR departments the strategic capabilities they need by providing this department with hard numbers through integrated software suites performing real-time analysis of the current personnel environment from which valuable predictions can be drawn."

Aubrey De Magalhaes, project manager within the SAP division of Bytes Technology Group (BTG), has similar views: "HR is not merely a data capture process. It is an invaluable tool, which the organisation as a whole from management to ground-level staff need to become involved in to make more informed personnel decisions."

This global trend towards HR taking a more analytical role in the modern organisation is where SAS Institute is confident it can turn static employee information databases into gold mines for customers.

Says Jorg Salomo, CPM product strategy manager at SAS Institute SA: "In our own offices we have maintained churn figures of 4% and below, which is remarkable for an organisation where IT is the core competency. This has given us huge advantages over our competition, in an industry that can see these rates climb as high as 40%, as we have been able to plan and execute the progress of the enterprise based on the experience and commitment of our workforce."

SAS Institute has applied its analytical methods to HR systems to achieve these results and align the business and employee objectives. Using this resultant business intelligence (BI), a complete view of the workforce can be built and utilised to provide glimpses of the future on which plans can be built. The BI tools bring all the benefits of their roots - drill-down capability, comparative tracking and predictive modelling - to the HR data store.

"Where you really start to add value in this equation is when you begin applying the advanced analytics and future modelling techniques, which we have perfected in the CRM space to this HR data. Suddenly you can build up a table of data to understand why churn occurs in your organisation, for instance, allowing operational management to act to resolve this potential deficiency," explains Salomo.

Neil Lilford, MD of HWH494 Human Capital, agrees. HWH (for health, wealth, happiness) applies analytical tools to employee health data to identify and predict future risks in an organisation. These results can provide management with the data it needs to best deal with this risk, and play a role in the continued well-being of staff members or consider any action based on data.

This function of modern HR was highlighted by Gartner`s report on defining e-recruitment strategies published late last year, in which James Hollencheck notes that the key difference between e-recruitment and candidate tracking databases of the past lies in the application of advanced analytics to candidate acquisition for more comprehensive workforce planning. Hence an HR system without BI routines applied to it remains simply an old-technology, manual and inefficient device in the modern paradigm of careful personnel tracking, acquisition and retention in line with achieving the organisation`s objectives.

A recently published Gartner report details how newly emerging talent management application suites go about improving the effectiveness of a workforce. The report explains the uses and benefits of modules now becoming available in the deployment of this enterprise layer, from workforce planning through career mapping and into skills development, as well as the tools and management components that need to be in place to attain the touted benefits.

Sentonaris says: "Talent management is now becoming a critical system. It affects recruiting and retention strategies and directs the resources deployed towards nurturing and growing this talent within the organisation. This is where it comes to knowing people, and effectively deploying tools to map career progressions and skills development programmes."

IT is playing a role here on two fronts. From a legislative perspective, systems are now capable of automatically collecting the data and then generating the reports needed to comply with government personnel requirements. Then by analysing this raw data, organisations can work towards aligning personnel strategies across the board with the five-year business plan and begin building the base of human capital these objectives demand through informed acquisition or development of existing personnel.

"The HR function here is to focus the organisation on its people, make sure they have the right tools for a role they are expected to take up in the succession plan as generated by an organisational skills requirements map. It boils down to smarter decision-making by predicting the future based on current facts. Companies need to create career progression opportunities for vital staff members to be able to grow within the organisation. It`s about continuing to learn within their roles, recognising outstanding achievements or good ideas, and benchmarking your organisation`s personnel situation against global standards for your industry based on defined KPIs," says Sentonaris.

The need for staff retention policies is all about balancing the loss not only of resources needed to recruit and retrain a replacement, but of the opportunity costs squandered during this replacement period. Salomo expands: "At the end of the day, retaining staff is not simply a factor of higher wages. There are other drivers here that IT can help the organisation understand, and it`s this linking of the personal goals of your employees with the business objectives that`s the really tricky bit."

Cooper concludes that staff within an organisation today want to feel a part of the enterprise system. They not only require adequate remuneration and to be paid timeously, they also want their skills uplifted for their own benefit and for the most enterprise advantage. They want routine HR tasks like leave applications to be handled quickly and efficiently, and to be secure in the knowledge that they are being treated in accordance with legislation. Without the systems in place to provide this environment, he warns, a productive workforce can rapidly degenerate into a striking one, or the loss of key personnel to the opposition.

Self-service facilities putting access to the HR stack into the hands of employees is an excellent means of using IT tools to link enterprise and personal objectives. By accessing the system directly, staff members and line managers have more responsibility for their own information. Self-service facilities also drive much higher efficiency by digitising and automating common HR processes

Bothma elaborates: "Traditionally, HR departments tend to vary in approachability depending on the time of the month. Self-service removes the need for staff to interact directly with HR for common procedures like leave application and processing, speeding up this process while maintaining full control of it. It also allows employees who do need to query something with HR to make more informed queries, making them easier to deal with rapidly and effectively."

Organisations must incorporate HR as part of their business strategy.

Jorg Salomo, CPM, product strategy manager, SAS Institute SA

This function ties in directly with a key HR role - communications with the employee base. Through self-service, a transparent flow of information between enterprise and individual is established, through any medium the user is most comfortable with. This transparency is a far cry from older, paper-based systems in that the employee can be kept up to date through automated responses of the exact progress of his communication with the HR department.

Self-service access is the next wave in HR systems, and promises dramatic benefits not only by improving the flow of information through the enterprise, but by enhancing the productivity of the HR department itself. This is a technology that will go a long way in making this crucial division able to deal with more tasks with fewer resources, by offloading some of the baser functionalities of this discipline to line managers and employees themselves. Freed of these laborious duties, the HR team is better able to focus on adding value to the business by turning HR data into BI.

Technically, the HR system requires the same principles of constant re-evaluation and fine adjustment as any other enterprise asset for the organisation to continue to extract the most competitive advantage.

Riaan Greef, business development manager at HR solution Axapta, says: "We know that organisations cannot be expected to go from a basic transactional system to an integrated, automated electronic HR environment in a single leap. So we recommend a phased deployment, beginning at financial and HR, and moving through succession management and portal-based information phases as they progress.

"Deploying the entire capabilities of the suite at once results in customers using only 20% of its full capabilities."

Knight, of the SAP competency within BTG, concurs: "SAP is a massive environment, which invariably includes far more than the customer needs, and it`s better to allow them to grow in steps, gaining more value from the environment as they develop.

"This is our responsibility which we fulfil through regular post-implementation visits to the customer and continued training and support."

An HR system is like the breathing workforce it connects to the enterprise core. It takes attention and in-depth knowledge of the workings of the system to ensure it keeps adding value to the business as a whole. After all, as the global economy changes, the successful enterprise must have the agility to adapt to changing requirements. And an agile HR system brings this flexibility to the personnel environment, which in turn goes a long way towards creating an enterprise complete with the kind of agility more commonly linked to a small to medium enterprise.

Most HR departments today are expected to deliver more tangible return on investment to the business with fewer resources, so fundamental automation and a central data store for HR information is a basic requirement, which should also include compliance with legislative requirements.

But for this crucial department to evolve into the strategy-driving, enterprise-aligned business force which trends suggest, requires a heady mix of technology solutions, integration services, consultation, training and business process adjustments. The benefits of undertaking this transformation are proven, ranging from substantial cost advantages due to improved operational efficiencies and compliance with government standards, to the softer but no less valuable benefits of higher staff retention and overall enterprise morale.

Salomo of SAS sums up: "Organisations must incorporate HR as part of their business strategy, by deploying an integrated solution which will give an enterprise-wide view of the relevant data complete with the analysis and future modelling of BI.

"But IT alone will not resolve all HR issues. It merely offers the tools with which to analyse these issues and identify possible solutions. It really comes down to changing the business and changing policies in order to achieve defined objectives.

"A strategic HR function will bring new levels of success to your organisation if the technology tools underpinning it are correctly implemented, while an enterprise that maintains HR in its back-end transactional state can expect more than just continued staffing issues like high churn and costly personnel replacement."