Best Practices in HR Technology by ocu68610


									                    Best Practices in HR Technology
■ Integrated Strategic HR through Software-as-a-Service for Best Business Results                   Ultimate Software           . . . . . . . S3

One thing we hear from HR professionals is that they are frustrated when using multiple
vendors or systems for managing their people. At a time when companies need to stay on
their toes to make critical, and often split-second, decisions that can impact the course of
business, a common concern they express is the inability to access and manage talent-
related data for a holistic view of the workforce. With mergers, acquisitions, and
streamlining operations during economic shifts, HR leaders and their CEOs all want tightly
integrated people management systems for more complete, real-time reporting.

■ Leveraging Outsourcing to Achieve Strategic, Integrated HR                                        ADP . . . . . . . . . . . . . . . . . . . S5

Creating efficiencies is often a daunting challenge for HR professionals; something most
companies try to accomplish on a process-by-process basis. As a result, many HR departments
have become a complex maze of systems, employees, and vendors that operate independently of
each other.

■ Enterprise SOA enables HR organizations to impact Shareholder Value                               SAP . . . . . . . . . . . . . . . . . . . S6

Today, the opportunity for human resources to impact shareholder value is far greater than in the
past. Most human resources organizations have made tremendous strides in maximizing the
efficiencies of back-office workforce management processes and automated and extended their
services delivery directly to the workforce via self-service solutions. Additionally, many HR
organizations have deployed organizational alignment solutions like Talent Management
applications (e.g. performance management, succession planning). Most of the effort thus far has
been towards internally optimizing the human resources organization and it’s operating costs and
processes. Yet to drive the greatest enterprise value, human resources organizations must insert
themselves into the enterprise value-chain.


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                                                    Best Practices in HR Technology

    Integrated Strategic HR through Software-as-a-Service for
                      Best Business Results

              ne thing we hear from HR profes-       guages slow the communication and integration         system, since a Web-hosted solution allows 24-7
              sionals is that they are frustrated    between systems, so performance time can lag          access. Employees, managers, and executives,
              when using multiple vendors or         when processes are divided. When a solution has       through self-service, have the benefit of any-
              systems for managing their peo-        a complete suite of human capital management          time/anywhere access, an added benefit given
ple. At a time when companies need to stay on        applications in one system, more rapid commu-         the increase of mobility and remote work in con-
their toes to make critical, and often split-sec-    nication and transfer of data occurs, leading to      temporary organizations. Whether employees are
                                                     increased efficiencies and productivity.              located in one location or dispersed in multiple
ond, decisions that can impact the course of
                                                         Another advantage of a truly integrated system    locations, SaaS enables employees, to access the
business, a common concern they express is the
                                                     is a decrease in administrative tasks and in-         same system because all processes are central-
inability to access and manage talent-related
                                                     creased accuracy in data. When, for instance, a       ized. This system unity further speeds reporting,
data for a holistic view of the workforce. With
                                                     company’s performance reviews and resulting pay       strategic planning, and decision making for a
mergers, acquisitions, and streamlining opera-
                                                                                                           company since data is centrally housed, and
tions during economic shifts, HR leaders and         increases are completed in the same system that
                                                                                                           managers and executives can run reports them-
their CEOs all want tightly integrated people        houses a payroll application, data can be shared
                                                                                                           selves from anywhere without any assistance
management systems for more complete, real-          among functional areas without manual input for
                                                                                                           from HR.
time reporting.                                      immediate updates in salary computations with
   If, for example, payroll is outsourced, re-       less risk of error. That same updated information     Proven Return on
cruitment is manually processed, and perform-        becomes instantly ready for reporting.                Investment (ROI)
ance reviews are done by yet another method,                                                                  With shareholders and management de-
gathering across-the-board data that is both         SaaS for Greater Efficiencies                         manding greater ROI accountability, most
meaningful and useful to executive team mem-             Many companies have already discovered            HR leaders are actively seeking ways to maxi-
bers and decision makers can be a daunting and       that the best way to get the newest human capi-       mize resources. Intersourcing®, Ultimate
time-consuming process – and may not yield           tal management systems up and running rapidly         Software’s SaaS, has conclusively shown
the most up-to-date information by the time re-      is to leverage the full power of the Web with         strong ROI rewards by helping boost a com-
ports are compiled.                                  Software-as-a-Service (SaaS), the method of pro-      pany’s productivity and reducing both hard
                                                     viding software applications through a secure In-     and soft costs.
                                                     ternet browser. Research firm Gartner Inc. pre-          In 2006, IDC, a leading global provider of
Advantages of Integrated,
                                                     dicts the SaaS market will triple in size between     business intelligence and analytics on infor-
Holistic System
                                                     2006 and 2011.                                        mation technology, reported an ROI of 157
    In order to be competitive, companies need a
strategic, integrated, and comprehensive solu-                                                             percent with a payback time of 1.01 years for
                                                     In-house Control with
tion for proactive talent management – one that                                                            Ultimate Software customer National Gyp-
                                                     Outsourced Convenience
leverages state-of-the-art technology to yield                                                             sum. In the same year, IDC reported a 778
                                                         A good SaaS solution will give a company all
greater efficiencies.                                                                                      percent ROI with a 1.8-year payback time for
                                                     of the advantages of an in-house system but yield
    If processes are split between vendors and                                                             IntelliRisk and a 214 percent ROI in 6
                                                     greater efficiencies due to easy access, total con-
                                                                                                           months for Waterloo Industries, both also Ul-
systems, outdated and slow reporting isn’t           trol, and elimination of on-premise IT equip-
                                                                                                           timate Software customers.
the only drawback. Numerous programming lan-         ment, maintenance, and expertise.
guages are used among vendors. Differing lan-            Users determine when and where to use the
                                                                                                           Complete HR
   Analyzing Software-as-a-Service Human Capital                                                               Keeping processes in one system typically
   Management Systems                                                                                      means greater business efficiency and gives the
       When choosing a Software-as-a-Service solution for human capital management, use the                customer one single point of contact for an-
   following check list in your due diligence:                                                             swers to questions or issue resolution, as op-
                                                                                                           posed to being forced to contact many different
     1. How long has the vendor been offering the service?                                                 vendors. To be truly competitive, achieve the
     2. Does the solution offer components for all aspects of human capital management –                   greatest benefits and ROI, and accomplish
        core HR/Payroll, Recruitment, Performance Management, Learning Management,                         complete human capital management, compa-
        Compensation and Succession Planning – and are all of the applications integrated in-              nies should look for a SaaS vendor that can de-
        to a holistic system?                                                                              liver a solution for the employee’s complete life
     3. Does the vendor have reliable customer references?                                                 cycle, re-cruitment through retirement, and the
     4. What kind of customer retention rate does the vendor have?                                         best technology, service, and support to reap
     5. What is the vendor’s uptime rate? 95-99 percent is a good target range.                            optimal business results.

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                                              Best Practices in HR Technology

         Leveraging Outsourcing to Achieve Strategic, Integrated HR

            reating efficiencies is often a    to outsourcing its HR and benefits ad-               Piecing Together the System

C           daunting challenge for HR
            professionals; something most
            companies try to accomplish
on a process - by - process basis. As a re-
sult, many HR departments have be-
                                               ministration with employee self-service,
                                               manager self-service, leave management,
                                               performance management and connec-
                                               tivity to insurance carriers and other sys-
                                               tems. SaaS is a delivery model in which
                                                                                                Platform redundancies force compa-
                                                                                             nies to develop system interfaces, manu-
                                                                                             al workarounds or to purchase additional
                                                                                             software to address integration points.
                                                                                             Nearly 70 percent of respondents said
come a complex maze of systems, em-            a vendor develops a Web-based applica-        they anticipated future costs for system
ployees, and vendors that operate              tion and hosts and operates the applica-      integration customization and software.
independently of each other.                   tion for use by its clients over the Inter-
    When companies understand that             net. Clients do not pay for owning the                   Lack of Self Service
HR processes are naturally connected           software itself but rather per employee          Approximately 60 percent of respon-
(e.g., payroll processes must make the         per month.                                    dents said they did not have a self service
association to deduct health and wel-             By harnessing the power of the Inter-      platform that was able to integrate em-
fare benefits from paychecks), adopting        net, PUMA empowered employees with            ployee or manager input across multiple
an integrated management strategy              24x7 access to information and improved       systems such as payroll and HR systems,
makes sense.                                   communication across the company’s 94         which can cause data entry challenges.
    And while many companies believe           retail locations. By using real-time infor-
they have an integrated approach to HR, it     mation, operations leaders, store man-            The study also evaluated the perform-
is not at all uncommon for an organization     agers and HR team members were able           ance of companies that did take steps to
to operate multiple Human Resources In-        to facilitate a faster decision making        integrate their HR systems. Six of the
formation Systems (HRIS), and a combi-         process.                                      ten “best practice” companies surveyed
nation of outsourced and internal HR.             Today, PUMA is focused on strategic        indicated that their costs have de-
                                               issues such as new store launches, man-       creased. And the companies that did not
Case in Point: Puma                            ager training, and employee communi-          report savings claimed a significant in-
Makes HR Strategic                             cation instead of paperwork. PUMA has         crease in value due to system functional-
   Since 1999, PUMA North America              reduced HR time for a new store rollout       ity and better data.
has experienced a rapid expansion of its       by 50 percent, and has streamlined                The savings per employee, therefore,
retail operations – growing from fewer         overall HR responsibilities so that now,      can be converted into an investment in
than 100 employees to more than 2,600          the team is able to add value to the en-      improved functionality, such as better
employees – that ultimately strained its       tire organization.                            decision making or more robust report-
HR team. PUMA made the decision to                                                           ing. Additionally, the respondents who
seek a solution to reduce costs, improve       Partnering for an                             stated that they outsource as an effort to
communication with employees, stream-          Integrated Approach                           achieve a centralized HR service delivery,
line store launches, and better train             ADP recently commissioned a study1         reported higher employee satisfaction
managers, while keeping the HR team            from PricewaterhouseCoopers (PwC)             and lower expectations of incurring fu-
extremely lean.                                to determine how using non-integrated         ture costs related to inefficiencies.
   At the time, PUMA managed its HR            HR systems, multiple platforms, or
and benefits information by using five         multiple vendors affect cost and service      Finding the Right
spreadsheets. So not only was reporting        delivery. Approximately 140 organiza-         Solution
difficult and time consuming, but the ac-      tions, representing a variety of indus-          While there is no one-size-fits-all an-
curacy of information was questionable.        tries with an average employee base of        swer, adopting automated HR solutions
And HR wanted to make sure that em-            1,000 or more, participated in the study.     will help HR professionals spend less
ployees and managers were focused on           The report found that there is a tangible     time on administrative tasks, and focus
customer service rather than worrying          cost associated with non-integrated HR,       instead on essential activities. And this is
about their payroll and benefits paper-        approximately $104 per employee per           a strategy that, ultimately, will improve
work. The HR team also wanted to free          year. For many organizations, this can        departmental performance and make HR
up their own time to focus on more             be up to six percent of the annual HR         a more strategic function helping to
strategic activities like better training      and payroll budget.                           achieve business goals.                  ■
store managers.                                   The study attributed the cost of non-
   PUMA partnered with ADP, using a            integration to several challenges faced by    1
                                                                                              “Hidden Cost of Non-Integrated HR Service
Software-as-a-Service (SaaS) approach          many HR organizations, including:             Delivery,” PricewaterhouseCoopers, June 2006

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                                                         Best Practices in HR Technology

          Enterprise SOA Enables HR organizations to Impact Shareholder Value
                                                                 BY HANIF ISMAIL

                                                          ment, but one that has a direct, measurable impact            all of their business operations. Enterprise

               oday, the opportunity for human re-
                                                          on the value of the company. By integrating key               Services-Oriented Architecture (enterprise
              sources to impact shareholder value is
                                                          HR capabilities such as employee competency da-               SOA) allows human resources-related ap-
              far greater than in the past. Most hu-
                                                          ta, incentive mechanisms and performance man-                 plications to more easily plug-and-play with
              man resources organizations have
                                                          agement into front-office business applications,              partners who provide niche specialized
 made tremendous strides in maximizing the effi-
                                                          companies can optimize the performance of the                 functionality. Content such as data, user-
 ciencies of back-office workforce management
                                                          workforce, while on-the-job, in real-time.                    interface and business-logic is exposed
 processes and automated and extended their
                                                              Second, is the need to expand IT bandwidth.               through web services for re-use outside of
 services delivery directly to the workforce via self-
                                                          By extending more powerful configuration capa-                traditional HR applications. The content is
 service solutions. Additionally, many HR organi-
                                                          bilities to the business expert, businesses can di-           made available in modeling based tools to
 zations have deployed organizational alignment
                                                          rectly reduce the need for programmers to cus-                assemble a composite application. With
 solutions like Talent Management applications
                                                          tom-code each business requirement variant or                 this architecture, it is much faster and
 (e.g. performance management, succession plan-
                                                          extension. HR can take advantage of improved                  cheaper to integrate components from
 ning). Most of the effort thus far has been to-
                                                          agility, faster time-to-market, decreased engineer-           across multiple systems to optimize end-to-
 wards internally optimizing the human resources
                                                          ing costs and greater involvement in enterprise               end business processes that touch multiple
 organization and its operating costs and process-
 es. Yet to drive the greatest enterprise value, hu-      business processes.                                           parts of an organization. These constructed
 man resources organizations must insert them-                A final business driver involves the changing ex-         web-services move away from the costly
 selves into the enterprise value-chain.                  pectations of end-users. Users expect an intelligent          point-to-point custom integrations and are
     Leveraging composite applications enabled by         experience that is personalized, contextual and               ideally consumed by multiple applications.
 enterprise SOA architecture will result in lead-         seamless. End-users demand an application that                These services are also easier to maintain
 ing-edge, intelligent enterprise-wide solutions          combines transactions, analytics, knowledge and               and allow companies to continue enhanc-
 that create newfound business value.                     collaboration into a rich single user-centric experi-         ing applications with minimal impact on
     Embedding HR business processes and data             ence across a heterogeneous system landscape.                 integration logic.
 within front-office business applications across                                                                   •   Business Process Modeling (BPM) — BPM
 the enterprise value chain will increase and opti-       Empowering HR with                                            technology provides a visual modeling tool
 mize the value of a company as a whole. The in-          Emerging Technology                                           to empower non-programmers such as busi-
 tent will be to integrate human resources capa-              The internet revolution allowed the HR depart-            ness experts to graphically configure enter-
 bilities into horizontal and industry-specific           ment to extend data and processes outside its walls           prise business processes using the services
 processes, including:                                    to the workforce and line managers utilizing self-            exposed via enterprise SOA. Imagine an HR
   • Field Service applications to optimize pro-          service. The result was a dramatic increase in serv-          analyst changing the recruiting process by
        ductivity.                                        ice delivery quality, a substantial reduction in HR           simply altering the business process flow di-
                                                          operations costs, an uptick in employee productiv-            agram in a visual composition tool.
   • Call Center infrastructure to optimize
                                                          ity and a widespread recognition of the potential         •   Composite applications — An innovative,
        customer experience.
                                                          value of the HR function.                                     new generation of composite applications
   • Sales processes to maximize revenue.
                                                              In the upcoming revolution enterprise SOA                 can assemble services from a varied set of
   • Manufacturing processes to maximize
                                                          will open the door for HR to make a significant im-           multi-vendor applications into a single end-
                                                          pact to the enterprise, but HR organizations will             user experience. Unlike a portal, a compos-
     By “re-using” enterprise SOA enabled appli-
                                                          have to lead an internal cultural shift. HR should            ite application looks at the entire end-to-end
 cation components across a natively integrated
                                                          generally shift from an administrative focus to how           enterprise process and integrates compo-
 open platform, business experts can graphically
                                                          HR can further optimize the performance of other              nents regardless of what organization or sys-
 assemble enterprise-level end-to-end business            business units by leveraging the knowledge of its
 processes with minimal involvement from an in-                                                                         tem it belongs to. It transcends any organi-
                                                          human capital and identifying opportunities to
 formation technology (IT) professional.                                                                                zation, system or data boundaries, thus
                                                          optimize workforce performance.
                                                                                                                        focusing primarily on enterprise value.
                                                              The emerging technology that makes this inte-
 Business Drivers fueling                                 gration possible includes enterprise services-ori-
 the enterprise SOA move-                                 ented architecture (enterprise SOA), business           Increased Revenue: A Field-
 ment                                                     process modeling (BPM) technology and compos-           Service Example
     Several business drivers are linked to the evolu-    ite applications (xApps).                                  The following example shows how an enterprise
 tion of enterprise SOA technology, fueling rapid            • enterprise SOA — Today, most organiza-             SOA platform can be used to insert HR into a cus-
 adoption. First, the continuous struggle for HR be-             tions have multiple, specific software mod-      tomer-facing service process (customer relationship
 ing recognized as not just an administrative depart-            ules or solutions that they use to support       management -CRM) improving enterprise per-

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                                                         Best Practices in HR Technology

formance and driving up shareholder value.                neers and improvements in customer satisfaction                of the services (integration logic) and prior-
    The call center of a national retail store re-        and cross-sell ability could result in a dramatic pos-         itize service component development.
ceives a field-service request to fix a customer’s ap-    itive impact to this organization’s revenue.                Many vendors, such as SAP, have service-en-
pliance. After capturing call information and diag-                                                                abled their enterprise platform and can work with
nosing the basic problem, the call center agent           Increased Profit Margin:                                 customers to identify unique business challenges
must assign the proper field-service technician. By       Integrating HR into Retail                               that can be addressed through enterprise SOA.
leveraging workforce competency data, compensa-           Store Operations
tion rates and time & labor information provided              HR organizations together with retail store op-      Cultural Shift
by the HR application, injected into the CRM              erations managers have the ability to dramatically           As enterprise SOA technology is being adopted,
business process, the call center agent can make a        improve customer experience and maximize rev-            HR executives will need to facilitate a cultural shift.
quick, informed decision in selecting the best-fit        enue potential by making sure that the right re-             The discussion will need to shift from the ad-
technician.                                               sources are allocated at the right times and the         ministration of enterprise HR processes to ways in
    Upon completing the repair, the technician            right place.                                             which HR can further optimize the business units
accesses a CRM application from his mobile de-                By anticipating customer demand from data            performance by leveraging and developing the
vice to categorize the case, records his two hours        collected from store POS terminals, foot traffic,        knowledge of it’s human capital while on the job .
and five minutes of labor and closes the case.            seasonality variations with HR workforce informa-        The concept of “while on the job” remains the pri-
    Now imagine a composite application at work           tion (compensation rates, experience levels, work-       mary differentiator from existing concepts and the
which injects HCM into the equation. As soon as           er availability, overtime rules) a store manager can     key to solution success. This differs greatly from
the technician keys in his time spent, he receives        optimize to achieve the retail’s store goals in bal-     current practices of managing performance and de-
real-time development feedback from the HR ap-            ancing between labor costs and customer experi-          velopment plans once a year, but shifting to a “on-
plication. Performance management, coupled with           ence. For example, using SAP Workforce Deploy-           the-job” real-time performance optimization mind
analytics, alerts the technician on:                      ment, the store manager can optimize for the             set. The questions that should be probed with the
  • The average time the technician requires to           holiday season when the foot traffic in the store is     business units are things like: How can HR opera-
       close this type of incident is two hours.          at its peak. During this period, he many be willing      tionally optimize a roles performance in real-time?
  • The average time all field-service agents             to pay a little more in labor costs to drive sales.      e.g. field service engineer on a service call or a store
       throughout the organization require to close                                                                manager determining shift schedules.
       this type of incident is one hour.                 Preparing for the New                                        Enterprise SOA: The Solution of the Future
  • Compares the technician`s customer satis-             Wave – Technological and                                     Establishing an enterprise-wide view removes
       faction ratings, cross-sell rates, customer        Cultural Shifts                                          siloed organizational mindsets and focuses on en-
       retention rates to other appropriate service           So how do you prepare your organization for          terprise value. It eliminates organizational, system
       engineers.                                         this evolution? There is both a technology and cul-      and data boundaries by driving cross-functional job
    As the technician realizes that his efforts on        tural shift that you need to facilitate.                 roles and focusing on optimizing end-to-end enter-
this specific repair job are below par, the enterprise                                                             prise business processes. The results are more rap-
SOA platform draws from the HR-managed enter-             Technology Shift                                         id, effective enterprise decision-making and dra-
prise learning application to recommend specific              HR executives must work with the IT depart-          matic increases in efficiencies and productivity.
learning courses, technical reading materials or a        ments to champion the implementation of an en-               Human resources organizations have always
mentoring program. Meanwhile, the organization’s          terprise SOA-based infrastructure. This infra-           been challenged with showing a clear, tangible
performance management and learning applica-              structure will enable HR organizations to expose         association between the work they do and share-
tions will continuously monitor the technician’s          content such as data, user-interface, and busi-          holder value. Forward-looking HR departments
performance, providing real-time feedback to drive        ness-logic from HR applications in support of            have begun using their valuable data and process-
on-the-job improvements.                                  consuming them in the enterprise value chain.            es to strategically align corporate goals, manage
    Historically, without an enterprise SOA plat-         The result is a rapid cost-effective, maintainable       overall workforce performance, mitigate regulato-
form, it would have been difficult to integrate           technical integration.                                   ry compliance risk and now have the opportunity
the performance and learning capabilities with a              The components of implementing an enter-             to integrate themselves into the enterprise value-
real-time customer-facing service decision                prise service-oriented architecture include:             chain. In fact, the opportunity for human re-
process. Moreover, most jobs would be complet-              • Building web services from back-end appli-           sources to contribute to shareholder value is sim-
ed with a technician receiving performance feed-                 cations to expose content.                        ply limited by imagination and human resources’
back after-the-fact, providing little incentive to          • Establishing a service repository to hold the        willingness to lead a culture change that breaks
improve performance.                                             catalog of services from across multiple          down organizational boundaries. Today’s HR de-
    Lets assume, the technicians average time to                 vendors ready to be consumed in compos-           partments have the technology and the opportu-
close this type of repair incident goes from two                 ite applications.                                 nity at hand to raise the bar and play a direct role
hours to one hour — a 100 percent improvement.              • Implementing a model-driven development              in creating enterprise value.
The change doubles the technicians productivity                  environment to support composition of the
while increasing the organization’s revenue oppor-               services into a composite application.            About Hanif Ismail
tunity for him by 100 percent. Extrapolating these          • Establishing an enterprise-wide gover-                  Hanif Ismail is the VP for Business Development
types of results across numerous field-service engi-             nance process to standardize the definition       in SAP ERP Solution Management.

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      For more information on the companies that contributed to this
       white paper, visit their web sites or contact them directly at:

                    Ultimate Software                                                 ADP
                    2000 Ultimate Way                                       
                    Weston, Florida 33326                                             1-800-CALLADP
                    Sales Info                                                        Contact:
                    Phone: 800.432.1729                                               Lisa Appello
                    Fax 954.331.7300

                                                           SAP America Inc.
                                                           3999 West Chester Pike
                                                           Newtown Square, PA 19073
                                                           Phone: +1 866-609-1726

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