People power
- Article 66 of 77
- Information Age, December 2003
Human capital management technology promises to fully unlock the potential of the workforce.
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Experts point to several drivers for HCM technology today, including growing merger activity and a raft of new corporate regulations that is compelling organisations to more closely track the actions of their workers.
Yet simply cutting down on wasteful processes would be reason enough for most IT buyers to look at an HCM system, say analysts. Operations managers can spend up to six hours a week manually planning how to schedule their staff over the following week, according to a report by Chorleywood Consulting. By using an HCM system, that time could be cut from six hours to less than two hours. Moreover, by using resources more effectively, an HCM system might help to reduce overstaffing on some projects by 80% and understaffing on others by as much as 50%, says Chorleywood.
“Managers have always intuitively believed that their employees generate value for the organisation,” says Keith Rodgers, one of the co-founders of market-intelligence company Webster Buchanan Research. “Maximising the value of those assets is key to business success, which is why human capital management - the strategy of acquiring, retaining, managing, measuring and leveraging human capital - is appearing on many boardroom agendas.”
User buy-in
Key HCM suppliers such as SAP, Siebel and PeopleSoft maintain that the technology can reduce the complexities of managing the workforce effectively. “Good managers are going to spend 30% to 60% of their day with people,” says Doug Merritt, vice president and general manager for PeopleSoft HCM. “They're going to be reviewing people, changing assignments, interviewing people, ensuring the right people are in the right place at the right time. What's forcing line managers to get more excited about software is the complexity of these basic processes is going up dramatically. The number of people you have, their different competencies, the different project tasks to be focused on, with constantly shifting objectives and economic environments: these are all making it much more difficult to wing it with your people management than you could before.”
Of course, almost every organisation of any significant size has some kind of HR system. But, in many cases these have never fulfilled their potential. Early generation workforce management systems were often too difficult and time-consuming to master and were often imposed on managers by top-ranking people who knew little about local staff management.
The older systems had other shortcomings. “They were pretty much focused on ensuring certain processes were done more efficiently or took account of new legislation,” says Mike Friend, an analyst at IDC. “They were less to do with workforce analytics than with supporting specific processes in the HR function.”
One significant break from the past has been the introduction of web and portal technology, which has made it far easier for managers and employees to access key HCM information online. “The web has enabled us to have a really simple interface that hides complexity from the user,” says Chris Manton-Jones, UK managing director of TempoSoft. “One of our customers is Office Depot. It has over 1,000 stores but adoption of the system is voluntary for employees. Nevertheless, well over 90% of employees use it, and none of them have a great history of IT literacy.”
Donald Taylor, strategic alliances director at skills management software developer InfoBasis, says that obtaining strong user buy-in is challenging, but not impossible. “It's down to the individuals and the managers,” he says. “If it's just another 'bloody HR exercise', they're not going to do it.”
Taylor says that managers have to find ways to encourage their colleagues to participate the HCM project. “Make it worthwhile for employees to tell the system how good they are in particular areas and let that determine what training they get and the positions they get in the future,” he says. “If all that happens is they give themselves a '2' in a particular area and a manager agrees, that would be a sad exercise. But if the manager then asked the employee to get up to a '4' by the end of the year so he could go to the Paris office, the whole thing would be worthwhile.”
Ultimately, he says, the key to the success of HCM systems is implementing the right business processes to take advantage of the system's functions. That, too, is easier said than done. But for companies to extract competitive advantage from their workforces, they will have to rise to the HCM challenge, or risk being left behind.
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