Once upon a time, it used to be a quiet department in an obscure corner of
the office, far away from the buzz of crucial business decisions and seemingly
unaffected by the digital revolution. It produced and maintained reams of data
and stored it in thick paper files. And the people working in this department
were always bustling around with sheaves of paper, updating records, calculating
the number of days people could safely stay away from work without getting their
salaries cut…and so on.
Slowly, the thick paper files gave way to standalone computers and soft
copies of employee data made life a wee bit easier. Still, there was no respite
from cumbersome procedures. But with companies increasingly opting for HRMS
(human resource management systems), the HR department has truly come of age.
The idea is to let software handle all mundane procedures, leaving the drivers
of the department with the time and the resources to work on strategy.
So how are companies managing their intellectual assets? According to a
Gartner study, by 2005, 40% of the large enterprises across the world will
re-evaluate their HRMS solutions.
Evolving and implementing HRMS involves a clear mapping of the processes the
company has in place. For instance, the HRMS solution must synthesize the
company’s knowledge base with its business objectives. Observes Bijay Sahoo,
GM, corporate human resources, Wipro Technologies, “The success of an HRMS
implementation depends on the company’s objectives. If there is no strong
business case, it does not make any sense.”
So, a key factor in deciding on an HRMS system, is checking that it
eliminates drudgery and manual intervention in HR processes. People Soft and
Oracle were able to grab a sizable share of the market by offering state of the
art HRMS solutions.
HRMS @ work
Enterprises across the world have adopted technology in every aspect of
conducting business. PeopleSoft, Oracle, SAP, as well as Indian companies like
Ramco Systems, offer various tools to manage HR functions. PeopleSoft for
instance, has rolled out Version 8 of its HR solution. Analysts have being
billed this as the most comprehensive HR suite to hit the market in the recent
times. This latest version is expected to cover all processes handled by the HR
department–right from recruitment to retirement. The solution also offers more
collaborative functionality through a role-based portal, which extends the
organization’s reach by driving external content into the HR suite. The
solution also offers business intelligence through its integrated workforce
analytic that enhances decision-making.
Observes R Chandrasekaran, senior vice president, Cognizant Technology
Solutions, “We are using PeopleSoft 7.5 with appropriate customization to
suit our processes. The system caters to most of the HR functions from
recruitment to resource deployment and tracking. It also helps us maintain
client details and the allocation of projects to groups. We leverage all
features of the solution like auto responders, workflow automation as well as
storage and retrieval of resumes. The ‘self-service’ feature helps employees
to capture personal and location details by themselves.” At Cognizant,
PeopleSoft is the centralized database for human resource management
Another major player is Oracle. According to Grover, general manager,
e-business, Oracle India, the company’s HR solution maps the entire lifecycle
of an employee including organizational modeling, enterprise building, career
development, career planning, succession planning and 360 degree appraisals.
“Oracle HR Intelligence is an analytical tool that caters to the strategic
requirements of the top management,” says Grover.
Meanwhile, Ramco Systems, the first Indian company to venture into enterprise
product vending a decade ago, has an enterprise suite called e. Applications.
This comprehensive ERP package offers a range of vertical solutions that can be
implemented in stand-alone modules. The HR module of e. Applications is an agile
solution that has been implemented across the world. Observes Kamesh
Ramamo-orthy, V-P (e-Applications), Ramco Systems, “The Ramco solution
allows the definition of a hierarchical tree structure specific to each business
operation.”Employee details are captured by various tracking mechanisms
that enable intra-organizational functions like applicant tracking, hiring and
re-hiring. Project groups spread across geographically can be tracked with
effective dates and this helps the HR manager precisely monitor the career
movements of employees. “Our solution effectively maps the entire lifecycle
of the employees and ensures that competence is managed in line with the
objectives of the organization. We have implemented Ramco HR for customers with
employee strength ranging from 300 to 20,000. This includes names like Seagate
and Intel, ” adds Ramamoorthy.
Putting HR into HRMS
While vendors offer products with a wide range of functionalities, the key
factor companies should look for in HRMS implementation are: improving service
levels, synergy between various work groups, cost saving and improving the
overall efficiency of the organization by way of best practices. As Bijay Sahoo
says, “At Wipro, we have always used cutting edge technology to enable
better service. Moreover, we have one of the most evolved HR systems in the
world. Our HRMS is completely integrated with e-enabled systems and processes.
The complete package is popularly known as Channel W. The system uses the SAP HR
Module. This is an end-to-end solution covering a wide range of functions from
pre-hiring to post-exit procedures routed through an online system”.
Hence, the two major factors that decide the fate of an HR solution are
flexibility and functionality. For instance, the highest demand is for systems
that are rich in functionality but flexible enough to talk to homegrown systems.
Observes Grover, “The strength of an HRMS package lies in its flexibility
and configuration. A system must incorporate user defined changes at every level
in order to ensure a smooth process of implementation.”
Cognizant for instance, has the PeopleSoft HRMS, but it also uses home grown
solutions like iCare, an employee grievance redressal system and eCampus, to
monitor the campus recruitment and host of smaller applications. Similarly,
Wipro has integrated many of its own custom-built legacy solutions into the SAP
framework it has implemented. Hence, an HRMS puts the disparate HR functions
into a system by integrating the islands of data into a unified whole. The
ultimate aim of any HRMS implementation then, is to pave the way for strategic
work force management by ushering in a self-driven organizational culture.
The RoI Factor
Over the years, the HR department is traditionally seen and judged by its
ability to bring out more productivity and cut down costs. One of the major
factors that pushes companies to implement an HRMS solution, is to maximize the
ROI. According to studies conducted by various research bodies across the world,
the findings indicate that a good HRMS solution reduces the total HR costs by
25% and improves the productivity levels considerably.
Wipro, after the implementation of HRMS, saved around Rs 5 crore (see box).
Similarly, several companies have optimized on workforce productivity that
resulted in an overall growth in revenues. For instance, ICICI, which has
implemented Ramco HRMS, has accrued far reaching benefits exceeding the costs.
Says Vipul Desai, AGM, HR, ICICI, “The Ramco solution helped us to
streamline our processes and systems. It has redefined the very fabric of our HR
policies. The solution now forms the backbone for a system that manages 3,500 of
our employees spread across the country. In fact, the erstwhile cumbersome task
of payroll processing is now managed in two hours!”
In an HRMS implementation, the RoI is calculated not just in terms of revenue
but the multi tasking benefits of the solution are also considered.
Chandrasekaran of Cognizant believes that the benefits of an HR solution should
be measured in terms of data integrity, seamless integration, and the workflow
efficiency it brings to an organization. For instance, consider Cognizant’s
experience with PeopleSoft, “Before the implementation, all HR related
processes were being carried on stand alone systems. This is now integrated into
a single system. In addition, the solution has helped Cognizant resolve several
inconsistencies and has paved the way for centralized workflow automation.”
A study conducted by the American Society for Training and Development (ASTD)
has predicted that adaptive and virtual organizations will replace rigid
organizational structures in the future. The organization, including the HR
functions, will actually be a network of autonomous small project teams that are
formed and restructured as needed.
This observation clearly surmises the work environment dynamics in future.
Some analysts point out that the emergence of virtual organizations is the
result of years of effort companies have put in to modernize their HR systems.
However, skeptics say that only a few companies could be heading towards the ‘virtual’
model. Notwithstanding conflicting opinions, the reality is that HR and its
processes have changed, and one major driver that has induced this change is the
application of technology to HR management. A Hackett Group study on the makeup
of HR departments in future, throws some interesting insights. The study reveals
that organizations will segregate HR functions into four broad areas — A) A
small group to support senior management and to address strategic HR issues. B)
A centralized administrative structure. C) An HR change management group and D)
Centers of expertise that provide expert advice to the company. The common
denominator that binds all these groups is undoubtedly an HRMS solution that
ushers in the much-needed synergy.
Another emerging frontier is eLearning. Vendors today offer solutions with
more collaborative functions so that companies can leverage them for training
employees spread across locations. Today, the shift from classroom to Internet
based training has already begun. Keeping this in mind, vendors offer
Intelligent Tutoring Systems (ITS) for eLearning. Some companies are also
developing ‘Intelligent Bots’ or ‘Learning Associates’. Here, every
employee can have his own customized Bots powered by voice recognition
techniques. Replicating real life situations will enable this learning.
According to a report by Advanced Distributive Learning Initiative (ADLI),
organizations will provide an electronic personal learning associate that will
play the role of a ‘mentor on demand’ in real time. The mentoring will be
highly individual specific, aimed at giving details based on their learning
levels. The learning associates will fit into diverse platforms of usage like
desktops, PDA’s and mobiles telephones.
Given the ambitious roadmap for HRMS solutions, the driving force will be the
organization’s willingness to infuse high-end technology into HR processes.
HRMS implementation is not an end. Companies need to constantly innovate and
renovate its processes by adopting apt technologies as per the market dynamics.
G Shrikanth in Chennai
Advantage Wipro: Wipro has implemented the HRMS from SAP. The solution
has ushered in clear benefits to the company. For instance, in the year
2000-2001, backend staff productivity resulted in imputed savings of Rs 50
million ($ 1.4 million). While employee force increased by 50% (6500—9750),
the support staff decreased from 565 to 547. eLearning initiatives resulted in
imputed cost savings to the tune Rs 10 million. The cycle time for reimbursement
was reduced from 35 days to 3 days. More than 9,600 Wipro employees use the
system. For Wipro, HRMS has been a key employee-integration factor.
PeopleSoft’s CFO Portal: HRMS major PeopleSoft has launched a CFO
portal that is part of its latest HRMS package Version 8. The portal provides
single point access to financial data for finance and business managers. The
portal allows each manager to identify key performance areas (KPM’s) and
create acceptable tolerance levels. If an employee falls short in achieving the
set KPM’s, the system gives an instant alert. In addition, the portal monitors
data and analyses employee performance automatically, thereby eliminating the
need for the HR managers to generate employee specific appraisal reports. The
CFO Portal is built using the PeopleSoft Enterprise Portal Program that
facilitates easy integration with PeopleSoft and third party applications.