"What an exciting time to be in HR!" says Patricia A. K. Fletcher in her introduction to Chapter 1 of
The Brave New World of eHR: Human Resources in the Digital Age (Pfeiffer/Wiley, 2005). HR has
moved from an administrative, support function to the heart of strategic management. And the use of technology is the key to
that transformation.
Fletcher argues that businesses have to adopt a 'Human Capital Management' approach to
make the most of any organization's greatest asset: the skills, knowledge and experience of its staff. She
describes how, in the 1990s, most large businesses introduced 'Human Resources Information Systems' (HRIS) and
that, in combination with re-engineering (the buzzword of the time), this enabled them to "replace antiquated,
time-consuming personnel processes with automation."
Walker (Walker, A.J. 'Best Practices in HR Technology' in Web-Based Human Resources,
McGraw Hill, 2001) states that if HR technology is to be considered successful, it must achieve
the following objectives:
Strategic Alignment
Must help users in a way that supports the users.
Business intelligence
Must provide the user with relevant information and data, answer
questions, and inspire new insights and learning.
Efficiency and effectiveness
Must change the work performed by the Human Resources
personnel by dramatically improving their level of service, allowing more time for work of
higher value, and reducing their costs.
But, despite extensive implementation of Enterprise Resource Planning (ERP) projects,
Human Resource Information Systems (HRIS), and HR service centres costing millions of dollars, Walker
concludes that few organizations have been entirely happy with the results. Why is this?
Many systems have been implemented by cutting HR staff, outsourcing and imposing technology on what was left.
Arguably this approach should, at least, have cut costs. But Walker argues that survey results
demonstrate that overall HR departments have actually increased their staffing levels over the past
decade to do the same work. Moreover he considers that:
"Most of the work that the HR staff does on a day-to-day basis, such as staffing, employee
relations, compensation, training, employee development, and benefits, unfortunately, remains
relatively untouched and unimproved from a delivery standpoint."
Fletcher explores the issue of effectiveness in a very telling paragraph (page 15)
in which she states that: "Executives struggle with what to measure and how to clearly tie
employee metrics to business performance." Not only are they pressured by the vast costs of Human
Capital Management (payroll, etc.) but they also have to report to analysts "whose valuations
consist partly of measuring such intangible assets as the corporate leadership's team to execute
on strategy or the ability of the business to attract and retain skilled talent."
She concludes that:
- Executives are not sure about the kind of data that would prove to analysts that
their employees are delivering better and creating more value than their competitors.
- Analysts are struggling to make sense of intangibles, often falling back on a 'revenue per
employee' metric which does not tell the whole story.
The HR Function
Walker advocates the business process re-engineering the HR function first, then E-engineering
the HR work. He suggests the formation of re-engineering teams of providers, customers and users to
examine the whole range of HR activities - including those which are not being done at present. The
end product is a set of processes organized into broad groupings such as resourcing, compensation or
training and development. These processes should then be examined by the re-engineering team and redesigned to:
- 1. Be better aligned with organizational goals.
- 2. Streamlined so as to be cost-effective in comparison with the 'best in class'.
- 3. Have a better integration with other processes.
From this redesign comes the picture of a new HR function. What next? The organization could be restructured
and the tasks handed out existing or new staff. But Walker argues that the most effective approach is to
introduce new technology to deal with the redesigned processes.
Fletcher (p. 16) contends that for HR to survive in this brave new world it needs to
"possess a technology acumen like never before." A tall order, one suspects, for many die-hard
personnel traditionalists. But if they do not demonstrate the ability to recommend appropriate
technology and control automated HR processes, organizations will use other people for these tasks.
Fletcher (p 17) instances the creation in some organizations of Chief Talent Officers (CTO's), focused on talent
acquisition and retention. These, like some replacements for 'traditional' HR executives may
have no direct experience of human resource management at all. Instead, they may have "led a line of business
and have had P&L responsibility, understand what it means to be accountable for delivering
business results."
