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Universities boost HR’s efficiency—and save money—by letting employees change their own data online
HR professionals in higher education institutions face unique challenges. They manage a workforce that’s constantly changing in size and demographics, employees that can be geographically dispersed around the country or the world, and thousands of student workers who often have special pay and benefits requirements.
Add to that mix former professors and administrators collecting retirement benefits, and empowering employees to do as much as they can on their own is increasingly a necessity. Web-based solutions that enable employee self-service are key to efficient HR operations. The University of Louisville and the University of Michigan are using PeopleSoft Inc.’s Human Resource Management System (HRMS) and Enterprise Campus Solutions 8.1 to improve efficiency and save money.
Pleasanton, Calif.-based PeopleSoft has more than 730 higher education customers. In December, it announced its acceptance of Oracle Corp.’s takeover bid. Oracle executives have said they plan to maintain and upgrade PeopleSoft’s products.
PeopleSoft provides online, self-service tools that enable HR professionals, students, faculty and alumni to access and update academic and administrative data such as enrollment, financial aid, grades and personal contact information. School services, including admission status, registration, loan application, class scheduling, grading and transcripts, are accessible via the Internet. HRMS version 8.1 is the core component, and Enterprise Campus Solutions software adds functionality to the HR system.
“We’ve allowed employees to change their home address, put in emergency contacts and change their phone numbers” via the web, says Sue MacDavitt, senior director for HR records and information at the University of Michigan (U-M) at Ann Arbor. Future enhancements will allow employees to change their campus address and view their current and past job appointment information. “It’s a more direct role for employees in processes that are [currently] paper-based,” she says.
Julien Carter, associate vice president of HR at the University of Louisville in Louisville, Ky., says PeopleSoft’s technology allows his staff to manage the needs of 5,400 faculty members and staff efficiently. Student employees bring Louisville’s workforce to 11,000, and there are about 8,400 people with dependents collecting benefits from the university.
“The only way a small staff of 44 can [handle that workforce] efficiently is by learning the technology in PeopleSoft” and outsourcing some processes, Carter says. “Otherwise, it would be a real mess. Today’s workforce has higher expectations from its HR staff, and it would be very challenging if we didn’t have technology to help address their needs. It gives to us the potential to do some business process redesign and provide more access to the user than ever before.”
Moving to the Web
Louisville used a mainframe-based batch processing system before switching to PeopleSoft in 1999 because the old system wasn’t Y2K compliant, says Donna Bartman, HR project manager at Louisville and special assistant for information technology (IT) to the vice president of business affairs. Louisville first shifted its basic payroll, benefits and position management functions to the new software, added applicant tracking after the first year and started using the web-based version in 2002. Lightweight Directory Access Protocol security enables HR staffers, students and faculty to use a single password to access all of the systems.
Another PeopleSoft strength is reporting, Carter and Bartman say. With the old system, HR might have had to ask the university’s IT staff for help to get at data. Now, the HR staff can create custom reports used for workforce planning, reconciling financial data, and creating management and productivity reports for HR units. “Now we can develop and adjust our reports as the situation requires,” Carter says.
Timeliness has improved, too. “The transactions update in real time, and we can do things like produce special checks off-cycle,” Carter adds.
Carter notes that using PeopleSoft products has made it easier to outsource some HR functions, freeing staff to do other work. Louisville outsources its Form W-2 production and employee verification tasks.
Why does using PeopleSoft products make outsourcing simpler? If an outsourcing vendor has to create unique interfaces to work with an employer’s unique software, the cost of outsourcing rises. But when many employers use the same software, outsourcing vendors can develop companion software more easily and spread the cost of that development among multiple employers.
Also, when universities or other employers have similar IT environments, they can share programming to make use of the outsourced service. For example, Carter says, Louisville outsourced its W-2 processes after Bartman coordinated with Ohio State University, which used a similar version of PeopleSoft and which had used the same vendor for W-2 services. Ohio State shared programming with Louisville that made the implementation of its new W-2 service go more smoothly. That cooperation would have been difficult if each institution were still using its own customized system, Carter says.
Saving Money and Time
The University of Michigan has been using PeopleSoft products since the early 1990s, but upgrading to version 8.1 in February 2004 allowed the university to roll out more web-based access to its 38,000 employees, says Norel Tullier, director of the university’s payroll office. U-M’s workforce is located primarily in Ann Arbor, Flint and Dearborn, but employees can also be found in New York, California and Hong Kong.
“We need to staff in any given state on any given day,” Tullier says. “It’s a very small group of people [outside Michigan], but the ability to deliver information to them on the web is a big plus.”
U-M’s temporary employees can view their paycheck information and little else, but that will change. “The intent is to begin to treat temporary employees more like regular staff,” Tullier says. “If it were being done manually, we could not roll [these services] out to a transient workforce of 12,000. But on the web, there is no reason to segregate regular vs. temporary employees.”
When the university eliminates paper pay stubs for direct deposit recipients on June 30, 2005, it will begin saving $200,000 a year on forms, processing and postage, Tullier says. The school has already reduced paper by moving W-4 forms online.
Carter says Louisville has saved at least $90,000 a year by eliminating the use of paper pay stubs on campus. The university is saving another $18,000 a year by moving its paper version of the campus directory to an online version.
Technology is saving HR time as well as money. For example, at Louisville, reconciling the health plan used to take the better part of a month, Carter says, but the new system has helped shave that to just a few days. “At one time, I calculated that the use of this technology was the equivalent of giving us three to four extra people,” he says.
At U-M, once employees found out they could change their address online, it greatly enhanced HR’s efficiency. Before moving to PeopleSoft, the HR office, on average, updated or otherwise “touched” 600 to 800 employee addresses each week. Now, because employees can update their home address online, HR handles about 200 fewer addresses each week.
U-M also recently completed an open enrollment period for its employees and used PeopleSoft E-Benefits to automate the process. MacDavitt says that 16,500 employees made changes during open enrollment, and the majority—12,636—made their changes online.
MacDavitt notes that U-M’s HR office needs to do a better job of letting employees know what they can do on their own. “When we made the change for home addresses and phone numbers, we did it without a lot of communication to the employees,” she says. “Once employees find out, it’s great for them.”
Jason Averbook, director of global product marketing for PeopleSoft Human Capital Management, a division of PeopleSoft, says such “inward marketing” is weak on many campuses. Because people account for 75 percent of a university’s total costs, PeopleSoft wants to help HR departments think in terms of human capital management, which can add value, instead of human “resources” that can be used up, he says.
“We want to make sure people are really treated like a university’s most important asset. Self-service is the lowest common denominator,” Averbook says, adding that PeopleSoft’s goal is to make using its applications as easy as using an ATM to make a withdrawal or check a bank balance.
Costs and Benefits
PeopleSoft campus implementations can cost $300,000 to $400,000 at smaller schools and jump into the multimillion dollar range at larger institutions, says Averbook.
That cost includes the software license and implementation costs for the core HR module. New releases of the application are available usually every 18 to 24 months, though organizations don’t have to upgrade immediately, he says. PeopleSoft supports its applications for at least three release cycles—about four to five years—so users can go some time without upgrading.
Louisville’s Carter notes that the value of an investment in software can’t always be measured in dollars. The enhanced efficiency that technology provides enables HR to offer services that traditionally would have required additional staff.
PeopleSoft’s prices can be high because the company charges by the size of the enterprise, says Judy Sweeney, research director for enterprise resource planning at AMR Research, a business technology consulting firm in Boston. She adds that PeopleSoft’s implementations can be complex, but once in place, its systems are easy to use. The company’s latest offerings focus on strategic human capital management functions, including e-learning, performance management, and talent and recruitment, and some are stronger than others, Sweeney says.
“PeopleSoft core HR, payroll and benefits [programs] have good depth. They are also strong in pension administration, where many of their competitors are weak,” Sweeney says. She says PeopleSoft lets users manage a global workforce in a single database with local language and legal requirements. Users can handle global payrolls with country-specific regulations. The software also handles compensation, including multiple pay components, variable compensation plans and benefits.
Bartman says she would like to see PeopleSoft separate its HR and student administration modules in the future so certain offices have the option to upgrade regardless of whether other users want to upgrade at the same time.
Sweeney says she has heard some PeopleSoft customers complain about not being able to upgrade certain functions and wasn’t surprised to learn that the latest version addresses that concern, especially since some of PeopleSoft’s competitors already let their customers do that.
Averbook says help is on the way. In Enterprise Campus Solutions 8.9, released late last year, one office can upgrade on its own without the entire enterprise having to upgrade. Also, to simplify self-service, a department manager can set up a job requisition in one click, instead of eight. The new version also lets employees sign up for benefits and change certain benefit information on their own, saving HR time.
Current PeopleSoft customers can be assured that there is an Oracle commitment to develop and release PeopleSoft version 9.0, Sweeney says, adding that the companies will support these products for several years. “We expect it will take a while for the organizations to merge and articulate plans beyond 9.0,” she says.
Dan Caterinicchia is based in Washington, D.C., and writes frequently about information technology.
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