Enterprise Resource Planning – A Human ResourcesOverview

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Enterprise Resource Planning – A Human Resources Overview

Enterprise Resource Planning represents an organization’s attempt to

fully integrate company information from a previously fragmented

collection and retrieval system into an organized, multi-user

environment that can be shared by all key departments within the

organization, including sales and marketing, accounting and finance,

material management, production planning and human resources. The

decision to convert to such a system cannot be made hastily, and

requires extensive planning to accommodate requirements, cost and

expenditures, integration, implementation, and training. The

complexities of such a project can be compared to an ISO program for

management information systems that involve extensive software

conversion and re-tooling of employees who will be required to perform

new and varied administrative tasks. The existing user base must be

evaluated and a needs analysis completed to determine the degree of

acceptability and resistance to such a program, as well as what

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knowledge, skills and ability will be necessary to bring users to a

level playing field prior to implementation.

In essence, such a system will require initialization of cultural

change and planning for the human part of the ERP. The elimination of

negativity is tantamount prior to startup of such a program. “There

are three major reasons why people resist a change. They don’t get

it, they don’t like it, or they don’t like you. Any one of these can

stop the ERP dead in its tracks. People need to get what its all

about, they need to like it and be willing to take part in making sure

it is a success, and they need to have confidence in you” (Maurer,

September 2002).

Part of the extensive training necessary for successful implementation

will involve the ability of employees to fully understand the

connectivity of their jobs to the business objectives of the

initiative and, the projected overall benefit to the company. Taking

this first step of early communication will allow employees to adjust

to a new way of doing things and provide them with the incentive to

leave the old ways behind.

This paper will address the Human Resources or the eHR side of

Enterprise Resource Planning. Among the topics to be discussed are

current issues regarding existing human resource professionals, pros

and cons involved in the implementation of eHR programs, and,

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recommendations for Information Systems managers to consider when

implementing such solutions. Finally, a comparison of two popular ERP

Human Resource software packages, Siebel’s Employee Relationship

Management and PeopleSoft’s Human Capital Management will be made.

Specific areas to be examined within these frameworks will include

Human Performance Technology and Employee Self-Service Solutions.

Current Issues

Human Resource Departments and their long recognized roles as the

employee gatekeepers of the organization have, over the decades,

become weighted down in a quagmire of recordkeeping tasks, endless

documentation and redundant information, a watchdog for management and

employee rights, an almanac for employee benefits and company

policies, and a help desk with an endless line of inquisitive

employees. Many departments have evolved into nothing more than

internal customer service information centers and complaint

departments. As the economic downturn begins to erode away multi

layered Human Resource Departments, more and more of the mundane

duties are being absorbed by higher ranking HR executives, depriving

them of the time to function in an executive capacity and contribute

to the strategic well-being of the organization. Somehow, a means

must be found to simplify these daily tasks and release HR

professionals from this paperwork prison and enable the individual

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employee to take on more responsibility and control of their work

related lifestyles.

The first HR issue to be discussed is Human Performance Technology or

HPT. Human Performance Technology has been described as “the

systematic and systemic identification and removal of barriers to

individual and organizational performance” (Chevalier, June 2001).

From a Human Resource perspective, HPT concentrates on individual

performance and employee development while focusing on intermediate

goals and business outcomes.

The key areas of Human Resource concern involve a synchronous method

of motivating and retaining high performance employees. Currently,

companies use a plethora of manual formats to collect, disseminate and

analyze employee information such as employee surveys, 360 degree

feedback analysis, performance appraisal tools, reward systems, and

succession planning. These time consuming processes utilize top-down

management techniques, usually originating with senior level

management and trickling down to middle management, line supervisors

and finally, individual workers. While the data being collected is a

valuable performance evaluation tool, the means of collection often

lack true objectivity and, most importantly, real employee

participation.

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The traditional methodology of employee evaluation tools are being

revamped by newer, more participatory, interactive systems that are

brought directly to employees through numerous software technologies.

Employees access these systems via a LAN or company Intranet

accessible through either a desktop at their work location or through

kiosks that are provided by the company in designated areas. The

purpose of these pro-active employee solutions are to enable the

individual employee to track their progress, analyze their performance

and compare their results to company expectations. This “on-line”

process affords employees the opportunity to progress at their own

pace, and determine their own strengths and weaknesses, thereby

helping them to formulate individualized training requirements to meet

expected goals. This self-determining development sequence results in

a major shift from the top-down management controlled process to one

that is an employee controlled bottom-up process. The shifting of

responsibility from management to individual employee creates an

atmosphere of empowerment and allows employees to buy-in to the

company objectives and culture while rewarding the employee with job

satisfaction, promotion, increase in compensation and most

importantly, self-determination.

This shifting of responsibility from management (and HR) to the

individual employee opens up new opportunities and levels of

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responsibility never before achieved by workers; now, they are

responsible for their own job development and job performance, and

with the help of a strong eHR system, can attain new levels of

achievement and self satisfaction. On the other hand, the Human

Resource Department has created a system that will help the department

to better manage its time and planning process. Thus, the return on

investment for such programs include higher productivity, better

morale, and participatory processes where all employees become part of

the cultural change. Maximizing the company’s investment in its

people and in eHR technology places a keen focus on business goals and

improves HR quality and efficiency (Esposito & Novak, August 2002, 34

– 36).

The second HR issue to be discussed is the conversion of the time

consuming employee information processes into employee self-service.

In a time when economic burdens have forced companies to take a second

look at their budgets, comes a potential cost cutting “program” being

utilized by many HR departments. This concept is known as “employee

self-service.” The idea of employee self-service within the realm of

HR can be described simply as: allowing employees to have control over

specific HR functions as well as providing a window into the HR world.

In other words, employee self-service allows employees themselves to

go in and view or even change information in HR databases. The

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employer provides a portal to allow this to occur. Although this is

not an idea that should be categorized as a profound thought, both

employers and employees have seen the positive effects of such a

system.

Some of the benefits employers have experienced by introducing this

concept of employee self-service include “improvements in efficiency,

productivity, and employee retention. (McKenna 2002, 26). Before

they chose to give this access to their employees, the Dixons Group

took a look at their current HR department as well as employees and

managers outside HR. (M2 Presswire October 3, 2001). Dixons Group

focused on areas including management of time as well as current

processes such as recruiting of management, rewards, and development

(M2 Presswire October 3, 2001). In doing so, they found the need for

the complete revamping of HR. They stated, “we need HR processes and

systems that would contribute to our business success and goals in the

coming years by helping us to get the most from our employees” (M2

Presswire October 3, 2001). They found the HRIS applications

currently being used were costly and time consuming in regards to

maintenance (M2 Presswire October 3, 2001). The benefits the Dixon

Group expected to see included significant savings in HR processes

including the elimination of the administrative, paper-based duties of

HR personnel, allowing them more time to focus on the “Human Resource”

of the company (M2 Presswire October 3, 2001).

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Another company that has made the decision to administer an employee

self-service site for its 5,000 employees is CUNA Mutual Group

(Pallatto 2002, 54). CUNA Mutual Group provides insurance and

investment products to credit unions (Pallatto 2002, 54). Their

estimates forecast a savings of $2.3 million in administrative costs

(Pallatto 2002, 54). A company that has already experienced these

results first-hand is Broadband Service Inc. (Jorgensen 2002, 36).

Their implementation of an HR employee self-service site has proven

positive results in reducing tedious administrative tasks of managers

(Jorgensen 2002, 36). Over the course of a year, BSI had an estimated

savings of $818,000 in administration and process costs (Jorgensen

2002, 36). “Non-strategic administrative tasks were reduced by 56% in

the HR Department; time spent by employees performing basic HR tasks

was reduced by 60%; and management time spent on non-strategic HR

issues was reduced by 33%” (Jorgensen 2002, 36).

The decrease in administrative and non-strategic issues freed up

employees’ time to experience and thus, benefit, from the more

challenging tasks of their roles. When it comes to employee

happiness, employee self-service “will empower the workforce to solve

their own problems and enable HR to focus on more strategic

initiatives, driving up workforce satisfaction and productivity” (M2

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Presswire September 26, 2002). This increased empowerment and

satisfaction become motivators of employees in the workplace.

Recommendations

Many companies have emerged with solutions for providing employers and

employees with eHR technology. Some of these solutions fall under the

umbrella of Enterprise Resource Planning (ERP) systems. These systems

allow for the exchange of information amongst all facets of an

organization. Two vendors that have provided solutions to promote the

benefits of eHR technology including Human Performance Technology and

Employee Self-Service are Siebel and PeopleSoft. Though others exist,

such as Oracle and SAP, Siebel and PeopleSoft have their own unique

features that make them stand out from the rest.

Both Siebel and PeopleSoft offer true ERP systems that can be modified

to accommodate specific needs of smaller employers that do not

currently have the financial resources to support total packages.

Since the overall cost of an entire ERP conversion can cost the

average company in the millions of dollars, as well as logistic

problems of set-up, testing and employee training, individual modules

of the ERP can be provided either through a packaged application or

hosted application (ASP) (KnowledgeStorm, 2002). This would certainly

provide Human Resources with an acceptable and modern eHR system that

could later be expandable to include Accounting and Finance, Sales and

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Marketing, Production Planning, and Materials Management. The costs

for initializing the ERP over a five-year period among remaining

departments would certainly produce both tangible and intangible

benefits. Furthermore, these capitalization costs would be spread out

over this time period, giving the organization the opportunity to

examine the return on investment each year, allowing ample time to

approve or reduce the following year’s budget proposals for further

expansion. Since each module operates independently, total conversion

to the ERP can be delayed if economic conditions do not improve.

An August 19, 2002, Press Release states that Siebel Systems, Inc. is

a “leading provider of eBusiness applications software” (Yahoo!

Finance April 19, 2002). Siebel made a name for themselves with their

involvement in Customer Relationship Management (CRM) solutions, but

recently introduced their Employee Relationship Management (ERM)

system. ERM is a “suite” containing many applications, including the

eHR topics of performance technology and employee self-service. The

ERM offered by Siebel is defined as “a software that increases

organizational performance through improved employee alignment,

productivity, and flexibility” (Siebel, 2002). On Siebel’s web site

www.Siebel.com, not only do they point out the established benefits of

employee performance and self-service as a means of lowering

administrative costs, but also state that their ERM solution “greatly

increases transaction accuracy.” Siebel goes on to say that they

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provide a product that “simplifies and speeds employees daily

activities through a personalized home page (see Figure 1) containing

directories of key contacts, current company news and events, product

and competitor information, and more.” Under the ERM system, this

homepage is what each employee will see at the beginning of his or her

workday.

Figure 1

The Siebel web site also stresses that this individualized approach

allows for improved organizational focus and increase in employee

productivity, as well as an immediate access to company objectives,

training opportunities, and even expense reports. Siebel ERM also

provides an individual employee “help desk” that allows the employee

to access the status of their own IT, HR and/or other departmental

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requests. This data enables employees to manage projects they may be

working on. (See Figure 2)

Siebel’s ERM supports streamlined performance management. “To help

employees align their professional objectives with those of the

company, Siebel ERM provides performance management capabilities that

allow employees to review the company’s and their manager’s objectives

and then develop and post their own objectives”. In addition, the

program allows employees to perform self-assessments and submit their

own performance evaluations on a regular basis to be reviewed by

management. Thus, feedback can be provided on an ongoing basis

resulting in excellent communicative techniques as well as positive

reinforcement and continuous improvement methodology.

Figure 2

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PeopleSoft is also a leader in their industry and known as “the

world’s leading provider of application software for the real-time

enterprise” (M2 Presswire April 30, 2002). Human Capital Management

(HCM) mirrors Siebel’s ERM in the sense they are striving toward

employee empowerment while continuing to “drive business performance”

(M2 Presswire April 30, 2002). Like Siebel, PeopleSoft’s HCM is also

a collaboration of applications which divides employee performance and

self-service opportunities into the following modules:

eDevelopment

Provides employee performance and self-service competencies

where employees manage their own information about their

professional education, awards, certificates, performance

review process, etc.

Provides self-service training that allows employees to review

and request training opportunities based on meeting company

objectives and goals.

eCompensation

Employees can view and edit direct deposit information

W-2 requests and tax changes can be made

Paychecks and pay records can be viewed

Employees can access online employment and salary verification

services

Example:

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eProfile

Employees can maintain personal information including name,

address, phone number, marital status, etc.

Leaves of Absence requests can be made, received and verified.

Employees can create organizational charts and customized

reports.

Example:

**The preceding information was obtained from PeopleSoft’s website:

www.peoplesoft.com

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Conclusion

Both the Siebel ERM and PeopleSoft HCM systems represent state of the

art Enterprise Resource Planning solutions that meet modern business

demands. Flexibility of both systems afford companies the ability to

customize either in-house or ASP processes to meet their own financial

limitations as well as their individual organizational goals. The

advantages include the freeing up of resources to better meet HR

priorities and, at the same time, provide more employee autonomy in

accessing recordkeeping and information processes, as well as having

direct input and management of skills inventory, feedback, company

objectives and performance dynamics. The resultant expectations of

such a program are improved employee productivity, morale, and direct

participation and buy-in to the company philosophy and mission.

Granted, such a cultural change does not come without its share of

expense and risk. The downside of such a recommendation includes the

difficulties of employee acceptance, workforce demographics,

conversion of existing systems, training requirements, and most

importantly, the justification of expense. However, in an expanding

competitive global economy, a company’s investment in its most

important resource, its employees, should never be considered ill

advised.

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Bibliography

Brown, Jennifer. 2002. “Rogers Orders Self-Serve HR Portal.” Computing

Canada, 7 June,

33 – 34.

Chevalier, Roger. 2002. “Human Performance Technology.” Society for Human

Resource

Management, June, 1 – 9.

Dixons Group Selects PeopleSoft to Improve Human Resources Efficiency

and Productivity.

2001. M2 Presswire, 3 October, 1 – 3.

Esposito, Michael & Novak, Jeff. 2002. “HR Cost Cutting: How

Technology Makes Little Savings

Add Up.” Workforce Magazine, August, 34 – 36.

Jorgensen, Barbara. 2002. “eHR Is Playing a Larger Role in Corporate

Communications.”

Electronic Business, August.

Maurer, Rick. 2002. “Plan for the Human Part of ERP.” Workforce Online,

September.

McKenna, Ed. 2002. “Empowering Employees.” Federal Computer Week, 7

January, 26 – 29.

Pallatto, John. 2002. “The Benefits of Self-Service.” Internet World,

July.

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PeopleSoft To Deliver Industry’s First Integrated HR Help Desk

Solution; Help Desk for Human

Resources Will Improve Workforce satisfaction and Drive Down

Costs. 2002. M2 Presswire,

26 September, 1 – 2.

PeopleSoft Unveils Human Capital Management Solutions; New Category

Solutions Leverage

Workforce To Drive Business Performance. 2002. M2 Presswire, 30

April.

Siebel ERM Delivers Powerful, Out-of-the-Box Applications to

Drive Corporate Performance.

2002. Yahoo! Finance, 19 August.

Internet Sites Used:

www.knowledgestorm.com

www.peoplesoft.com

www.siebel.com

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