Editor: Andrew Dzamba Managing Editor: Janice Prescott Desktop Editor: Charles Alleyne Editorial Coordinators: David Solomon

Gale Shangold Group Publisher: Perry Patterson

IOMAS REPORT ON

Executive Director: David L. Foster Published monthly by the Institute of Management & Administration, Inc.

Managing HR Information Systems

THE LEADING SOURCE OF INFORMATION ON BUILDING STATE OF THE ART HRIS AND CORPORATE HR INTRANETS

ISSUE 02-08

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AUGUST 2002

Exclusive IOMA Survey:

Best Techniques to Cut HRIS Operations Costs

With cost-cutting being the order of the day at most companies, you may be asked: How can you cut the costs of your HRIS operations? Of course, there are many ways, but which ones are the most successful? We recently asked readers that question. Their responses can help you decide which strategies to choose for your operations.
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In This Issue:
Exclusive IOMA Survey: Best Techniques to Cut HRIS Operations Costs .......................... 1 How GM Designed Its Award-Winning Employee Portal ................................................ 1 2 Watson Wyatt Studies Reveal Best Practices in e-HR and e-Learning ................. 2 15 Key Things to Do After Your New HR App Is Up and Running ............................ 4 HR Information System News ........................... 8 MHRIS Calendar .................................................. 14 HRIS Managers Forum ...................................... 15 Top Five Ways to Cut HRIS Operating Costs .............. see story above left
Percentage Move apps to Web Improve department efficiency Cut back on staff costs Self-service Web-based recruiting
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How GM Designed Its Award-Winning Employee Portal

The use of portals was one of the hot topics at this years annual conference of the International Association of Human Resource Information Managers (IHRIM). And why not? A typical large global company can save nearly $20 million annually by using an intranet or corporate portal, according to a recent survey (see the accompanying sidebar). However, to trigger this kind of savings, the portal must be designed and executed effectively.
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39.4%

36.6% 35.2% 32.4% 29.5%

10 15 20 25 30 35 40

(Source: IOMA)

IOMAS REPORT ON MANAGING HR INFORMATION SYSTEMS

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Exclusive IOMA Survey:

Best Techniques to Cut HRIS Operations Costs

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Move to the Web Adapting or migrating HRIS applications to the Web or corporate intranet is the number-one cost-cutting strategy, cited by 39.4% of the HRIS pros we polled (see the accompanying table). Companies are at varying stages of this strategy. Some companies are merely moving paperbased HR materials to the Web to cut costs. We moved the employee manual and forms to our intranet, which is available to all employees. The manual and forms are not maintained in paper formthey are viewed or printed when needed. We see considerable savings in printing costs and in the ease with which the forms can be kept up to date, reports an HR coordinator (financial services; 76 employees; Texas). Other companies take this strategy to the next step by including more personalized information for managers and employees. We implemented an HR Web site designed for managers and employees to provide policies, personal information (such as job grade, title, and salary), benefit and retirement information, and the like, says an HRIS manager (manufacturing; 4,890 employees; Michigan). Companies that are more advanced in their Web strategies are using sophisticated employee portals to handle HR transactions and other functions. Our most successful idea is our HR portal that has been developed for implementation in 2002. This idea was implemented and a budget granted due to a white paper that was developed by myself. We expect to have a 25% cost reduction during the next three years due to headcount containment, printing and distribution cost reductions, reports an HRIS project manager (manufacturing; 2,000 employees; Alabama). Some respondents point out that the cost savings may not be immediate. Although our re6 www.ioma.com

turn on investment is not realized yet, migrating transactions and processes to the Web and intranet is a start. Workflows have been improved to eliminate hands-on time as well as waiting time. In the long run, we believe we are doing the right thing, says an HR manager (private practice; 6,000 employees; California). Streamline Processes The second most cited strategy to cut HRIS operations costs is to improve efficiency within the department. This may or may not have anything to do with technology. For example, existing workflow procedures can be modified, or certain procedures can be eliminated or changed. We modified the paper flow and signature process for all rate/salary changes and new hires, reports a manager of payroll/HRMS (education; 1,500 employees; Maine). Sophisticated new technology is not needed to trigger departmental efficiencies, as one respondent points out: We use e-mail more widely for notifications, says a senior compensation analyst (manufacturing; 2,500 employees; New Jersey). One of the frequent comments concerning efficiency has to be with automating HR reports to eliminate paper. Weve changed some internal processes, which have enabled us to become more cost effective and eliminate a part-time employee. We eliminated some paper-intensive work by publishing reports on our intranet. This eliminates mass mailings and allows employees to request reports electronically, says an HRIS manager (mining; 9,800 employees; Alabama). Cut Back Staff Costs Over a third (35.2%) of respondents cite cutting staff-related expenses, such as travel. We have been in a cost-cutting mode. Being global, we have saved by cutting on overseas travel, says a director of global HRIS (management consulting; 5,000 employees; Illinois). Respondents also note that they have cut back

IOMAS REPORT ON MANAGING HR INFORMATION SYSTEMS

AUGUST 2002

on the number of conferences they have sent staff to, compared with the past. Videoconferencing, webcasts, and other Internet-based training have reduced the need to travel for training or education. Add Self-Service Employee and manager self-service continues to be a strong way to leverage HRIS for cost efficiency, as evidenced by the fact that almost a third (32.4%) cited this as one of their five best strategies. With self-service, certain HR data tasks are more efficiently handled by employees and managers instead of the HR department. Linking employees personally to our intranet allows them to update their own data, reducing staff time in recording and entering the changes, says an HRIS specialist (pharmaceuticals; 500 employees; Maryland). In some cases, companies are installing selfservice by upgrading their software with new versions that have the necessary functionality. We upgraded to PeopleSoft version 8.14 this year. This is a Web-based application that enables us to implement employee and manager self-service applications with ease. Weve also

implemented the PeopleSoft HR Portal, which enables us to deliver applications to a broad audience, reports an HRIS manager (financial services; 3,600 employees; Virginia). One of the most frequently mentioned uses of self-service is for the open-enrollment process. Having employees tackle this task electronically can trigger a savings windfall. We implemented Web-based-benefits open enrollment to eliminate previously used paper forms. Through an acquisition, we had 900 new employees eligible to enroll in addition to our existing 1,800 employees. Our HRIS people worked with our in-house Web developers to design an online form and the database administrators designed the database. An import from the benefit database will bring elections into our PeopleSoft HRIS and payroll system. We estimate savings of approximately $30,000 in costs. Also, three man-months of time and effort were saved, reports a director of HR operations (financial services; 2,700 employees; Massachusetts). There are other tasks that are ideal for selfservice, as one respondent points out: Our selfcontinued on page 10

Companies Pick Their Five Most Effective Ways for Enhancing the Cost Effectiveness of HRIS Operations for the Past Year, by No. of Employees
Adopted or migrated HRIS applications on to intranet/Internet Improved efficiency within the department Cut back on staff travel, conferences Added employee/manager self-service features to existing HRIS Adopted Internet recruitment strategies & technology Introduced or changed HRIS software or hardware Set new HRIS staff performance goals Integrated payroll and/or benefits administration into HRIS Added new system to track employee performance, productivity, time off Adopted new hiring procedures to weed out bad employees up front Selected new HRIS vendor(s) Reduced merit increases or bonuses Outsourced one or several HRIS functions Downsized internal HRIS staff Renegotiated HRIS service provider contract(s) Implemented new benchmarking techniques to assess HRIS costs Used more HRIS staff training programs Other (Source: IOMA) <999 1,000 32.8% 32.8 37.7 26.2 29.5 36.1 27.9 29.5 27.9 32.8 13.1 19.7 6.6 13.1 8.2 4.9 4.9 13.1 to 4,999 40.5% 38.1 31.0 31.0 28.6 21.4 19.0 26.2 28.6 11.9 14.3 19.0 16.7 4.8 11.9 11.9 9.5 7.1 >5,000 48.7% 41.0 35.9 43.6 30.8 23.1 33.3 20.5 10.3 5.1 25.6 7.7 23.1 23.1 12.8 10.3 12.8 12.8 Overall 39.4% 36.6 35.2 32.4 29.6 28.2 26.8 26.1 23.2 19.0 16.9 16.2 14.1 13.4 10.6 8.5 8.5 12.0

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IOMAS REPORT ON MANAGING HR INFORMATION SYSTEMS

AUGUST 2002

Exclusive IOMA Survey:

Potpourri of Ideas There are a number of other areas that respondents have targeted to cut costs in their HRIS operations. Although these categories didnt make the top five, one or more of them may be the best way to go in your operation. Here are a few notable cost-cutting strategies. Use ASP-based apps: Some companies are discovering that the use of an application service provider (ASP) to deliver HRIS apps is the best way to go. Under an ASP, or hosted, setup, the software and hardware is leased and resides at an off-site facility maintained by the vendor or third-party. Access is via the Internet or other secure connection. We reimplemented PeopleSoft HRMS, using the Web and outsourced hosting, reports a director of executive compensation (financial services; 1,600 employees; California). We started using an ASPbased HRIS package. The employees love it, and we have been able to cut down on internal staff and have fewer requests for information, says an HR manager (software consulting; 20 employees; Massachusetts). Bolt on new apps: There are many specialty HR systems that can be bolted onto your existing HRIS. Particularly popular now are employee expense management systems (for reimbursing and tracking travel and entertainment expenses), performance systems, and time-and-attendance systems. We are implementing a Web-based paid-time-off tracking system, says a director of compensation and benefits (manufacturing; 1,500 employees; New Jersey). We just installed a time-tracking system for our hourly employees. We will soon include exempt employees next spring for tracking vacation and sick time, reports an HR director (nonprofit; 1,000 employees; Minnesota). Outsource: Farming out selected HR functions and tying them into your HRIS infrastructure is becoming popular. We improved the efficiency of the benefits department with revamped administration by means of outsourcing. Also, we integrated our HRIS and benefits administration online via intranet and Internet. New uniform procedures for all this achieved

Best Techniques to Cut HRIS Operations Costs

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service features allow employees to enter time and labor, review 401k balances, transfer funds, make benefits elections, set annual performance plans, and update personal data. It has been well received by employees and allows HR reps to be more strategic, says an HRIS director (transportation/utilities; 23,000 employees; Oklahoma). Ramp Up Recruiting Using the Web for recruiting (named as a topfive strategy by 29.6% of HRIS pros polled) yields a number of important cost-saving benefits, as one respondent found out: Creating our Web site for recruiting was very beneficial. We receive many resumes via the Web, which has saved time and money on advertising. Updating our job postings on the Web is quick and easy. Responding to candidates is also done more quickly than in the past. We offer our staff an employee referral bonus, so keeping them informed of job offerings is also easily done through our Web site, says an HR manager (private practice; 240 employees; Michigan). What kind of cost savings are we talking about? We have a budget of $900,000, and we are using an ASP-based application integrated with our internal Web site. The first year, we were able to cut $250,000 out of our recruitment budget and reduce recruiter headcount by four. Next year, we will be able to calculate the cost savings for the reduction in time to fill openings, reports a senior HRIS manager (distribution; 16,000 employees; California). Large companies arent the only ones that see significant savings from Web-based recruiting. Posting job openings on the Internet has generated a huge response, with very little time and cost involved. Our savings are approximately $1,000 per opening, says a manager of HRIS and compensation (transportation/ utilities; 1,100 employees; New York).
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IOMAS REPORT ON MANAGING HR INFORMATION SYSTEMS

AUGUST 2002

annual reduction in benefits costs of more than $2 million for the foreseeable future, says a corporate benefits manager (manufacturing; 5,000 employees; Illinois). Choose a new HRIS vendor: Having a lot of disparate systems from different vendors or a system thats not capable of using the Web may mean the time is right to go with a new vendor. Our system was not Web-enabled, and we had too many third-party packages when a complete HRIS system would be the better way to go, says a senior programmer/analyst (health care; 900 employees; California). Renegotiate HRIS vendor contract: Contracts with vendors should be reviewed to see if theres any room for adjustment. Due to problems, we negotiated a deal that will allow our organization to eliminate maintenance costs of $15,000 a year, reports a director of compensation and HRIS (health care; 1,100 employees; California). Integrate payroll into HRIS: When two systems talk to each other, the results can be striking. Our most successful project was integrating payroll and benefits into HRIS and creating a shared service center. The ROI will be noticed immediately on our companys bottom line, says an HRIS manager (financial; 4,000 employees; Missouri). Do some benchmarking: By finding out what other companies were doing, it gave us more comfort in what we are developing. We used a consultant that cost us between $1,000 and $2,000 but saved us $10,000 with just one idea, says a director of IT/payroll (manufacturing; 115 employees; Texas). Beef up screening for new hires: A lot of money can be wasted when you hire a worker that turns out to be lousy. One solution: Weed them out up front. Some respondents use an outside vendor to prescreen applicants. I now do criminal background checks before an applicant is hired as a result of a change to an HR policy. This saves money because we are not paying people to work for a few days and then letting them go if there is a hit. It saves time by letting supervisors immediately pick another individual from the applicant pool, says an HRIS manager

(health care; 600 employees; Texas). Ax permanent freelancers: A common pitfall for many HRIS operations is to bring in independent contractors or consultants who end up staying forever. Therefore, consider whether you really need these individuals. Our most successful idea was to fire the two contractors that we had allowed to become permanent. We told staff members to find out what they were doing because the work was going to be shifted to them. This triggered savings in excess of $150,000 in the first year alone. There was no significant slowdown in system-development work, reports a manager of compensation and HR systems (manufacturing; 12,000 employees; Illinois). What to Do Take a fresh look at your HRIS operations in light of the above ideas from your colleagues. It would be unusual if you couldnt use oneor moreof these strategies to cut costs.

How GM Designed Its Award-Winning Employee Portal

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And where best to look for a top example of an effective employee portal than General Motors. In fact, it just received the Digital Consulting, Inc. (DCI) 2002 Best Internal Corporate Portal Award for its developers, Workscape Inc. and Sun Microsystems, Inc. The GM employee portal is one of the largest in the world. Portal in a Nutshell A portal is a Web-based one-stop shop that taps into a companys existing IT infrastructure to deliver the applications, information, and data that employees need to make their jobs easier. It is also designed to deliver data to an increasingly mobile workforce via nontraditional computing devices such as cell phones and PDAs. A portal reduces operating costs and increases
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