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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