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Change management is a big hurdle for manager self-service implementation.
Mapics Inc. had a million dollar problem. Managers at the Atlanta-based developer of enterprise resource planning software didn’t know how much vacation time their several hundred widely dispersed workers took each year. A paper-based tracking system was often inaccurate. And, like other gung-ho high-tech workers, many Mapics employees didn’t even use all the vacation they had. “The vacation accrual was worth more than $1 million,” says Sandra Hofmann, CIO and chief people officer (a rare combination). Mapics wiped out accrued vacation within several months after it adopted manager self-service (MSS) software to implement a new vacation policy. “It saved us $1 million and created permanent efficiencies going forward,” she says.
Broadly defined, HR MSS is the use of software and the corporate network to automate paper-based personnel-related processes that require a manager’s approval, record-keeping or input, and processes that support the manager’s job. The simplest examples are automated workflow for approving employee requests for things such as travel, supplies and vacation. More advanced processes include performance reviews, compensation planning and recruitment.
Vacation request was one of several MSS applications Mapics adopted, but Hofmann says she could have made the financial case for MSS on the vacation savings alone. For a company with $200 million in annual revenues, she says, “a million here, a million there adds up.”
Mapics is ahead of the pack. Corporate adoption of MSS is on the rise but lags adoption of employee self-service (ESS). MSS penetration of North American companies rose above 40 percent in 2003, compared to 30 percent in 2002, according to the Cedar 2003 Workforce Technologies Survey conducted by The Cedar Group, an HR consulting firm in Baltimore. (See “Growth in Self-Service Application Use.”)
“We’re going to see wider use of MSS over the next three to five years,” says Katherine Jones, an analyst at the Aberdeen Group Inc., a Boston IT consulting company. She predicts MSS will be nearly “ubiquitous” among companies with $1 billion or more in revenues. Many of her clients see a return on investment (ROI) of one year for ESS,
and she expects similar returns for MSS. “The decision to adopt MSS is basically a no-brainer,” she says.
The decision may be easy, but implementation can be hard. An MSS rollout faces the same challenges as other HR information systems (HRIS) projects: securing HR and IT cooperation; understanding which processes are impacted and making them consistent across the organization; and getting people to accept a new way of doing things.
The latter is especially an issue with MSS. Many managers still like to tell HR to handle the transactions that MSS requires the manager to perform. Whereas ESS is seen as empowering the user, MSS can be viewed as an imposition.
There are distinct levels of self-service, from basic administrative tasks to strategic MSS, and effective implementation may require a change in attitude among managers about the benefits to themselves and the organization. HR professionals who are considering MSS may learn from the varied experiences of three companies that adopted the software.
Three Waves of Self-ServiceDozens of vendors, including the three leading HR systems providers, PeopleSoft Inc. of Pleasanton, Calif., SAP of Walldorf, Germany, and Oracle Corp. of Redwood City, Calif., offer MSS applications. Mapics adopted applications from Employease Inc. on an application service provider model. Employease, based in Atlanta, hosts and maintains the software, to which Mapics and 300 other customers connect over the Internet.
Analysts see three waves of HR self-service. First, ESS comprises productivity applications that automate transactions that used to be labor-intensive for both employees and HR professionals -- changing name and address, choosing benefits and filing timecards, for example. Companies began to roll out ESS about five years ago when corporate use of the web for internal processes was still relatively new.
Then there’s manager productivity applications -- some analysts call them basic MSS -- which automate paper, workflow and processes associated with routine transactions, such as awarding pay increases, arranging transfers, and approving vacation time and travel expenses. These are often the manager end of transactions that start as ESS.
A third wave is the strategic MSS applications that automate complex processes such as recruiting, compensation planning and performance management.
“There has been a lot more adoption of ESS and basic MSS than strategic MSS,” says James Holincheck, an analyst at Gartner Inc., a technology consulting firm based in Stamford, Conn. Most companies start with ESS, then move to basic MSS and finally evolve to strategic MSS, he says. One exception is recruitment. Long before they adopted any self-service applications, many companies automated recruitment processes, using public web sites and commercial software. In the past year, Holincheck says, his clients have shown growing interest in MSS. “I’m getting three or four calls a week on the more strategic applications.”
That’s due in part to the loosening of corporate purse strings for enterprise software. The recession held back investment that might have driven faster MSS adoption, says Monica Barron, an analyst at IT consulting firm AMR Research Inc. of Boston. Companies are still not placing a high priority on HRIS spending, however. So she advises HR executives to build bridges to IT counterparts and piggyback MSS on broader enterprisewide projects, especially employee portal implementations on the corporate network. “More companies seem to be rolling MSS into broader enterprise portal initiatives,” Barron says.
Some companies understand the value of MSS but decide that adopting consistent business processes across the organization will open a can of worms. “The biggest challenge we find is that, from department to department, people have different ideas about workflow, rules and transaction approvals,” says Jim Spoor, CEO of Spectrum Human Resource Systems Corp., a Denver-based developer of HR software. “Many companies have no consistency. To implement MSS you have to have a disciplined, structured process.” As a result, he says, only 10 percent of his customers have adopted MSS.
Once MSS is rolled out, the users may resist. In the past, says Barron, managers viewed the HR staff as the administrators who performed the transactions that managers must now do themselves via MSS. “Managers may complain, ‘Why am I doing HR’s work?’ ” she says. When that happens, MSS has not been properly presented as beneficial to the organization, she says.
There’s good news, though. The 2003 Cedar survey found companies increased budgets for change management activities, including employee communications and internal marketing. Investment in HR-related technology projects increased 27 percent from 2002 to 2003, but money allocated for change management rose 162 percent. (See “Investment in Workforce Technologies.”)
“Change management is now about 10 percent of the total budget,” says Alexis Martin, the Cedar analyst who directs the study. “Many companies say they wished they had put more attention during the rollout on communications to managers—the value of using these applications to the individual and to the organization.” Cultural issues vary, depending on the organization’s size, level of computer literacy and ability to change.
Ideal For a Virtual Workforce
Change management was not a problem at Mapics, says Hofmann. In recent years, the company’s 700-person workforce became increasingly virtual, a change that left the 90 managers eager for self-service tools.
It began when Mapics let staffers telecommute to avoid traffic during the 1996 Olympics in Atlanta. The telecommuting accelerated during the economic downturn. Rather than lay people off to cut costs, the company closed offices and told staff to work from home. “Today, as much as 70 percent of our workforce is virtual,” says Hofmann. “They work from home or from customer sites.” Even most managers don’t work in a Mapics office. The situation is highly suited to self-service.
As a software developer, Mapics knew the power of technology, so the company began to look for self-service applications that would let staff function in a virtual organization. In the fall of 2001, it adopted Employease’s benefits enrollment application. The experience was successful, and Mapics started to look at MSS applications in early 2002. The company decided to stick with Employease, deploying all the MSS modules it offers except the one for recruiting.
“We deployed work events, performance management, vacation management and compensation planning,” says Hofmann. “We didn’t adopt recruiting because we weren’t recruiting people then.” The entire staff, including managers, is technically astute and had little trouble adapting to electronic forms and workflow, Hofmann says. With one exception, Mapics simply turned on the applications, using the processes as set up by the vendor. Vacation was the exception. Mapics wanted a use-it-or-lose-it policy, which was impractical before they had accurate data. The company established a new policy, set up a process and tweaked the application to match it. Now, managers can see how much vacation employees have taken and how much they have left. “This is important not just for fiscal management, but also to encourage people to take their time off,” says Hofmann.
The company offered an hour of web-based training when it rolled out each MSS module, with a 30- to 60-minute online meeting to discuss the module among managers. The MSS applications have allowed Hofmann to cut her HR staff from 10 to four. The decrease in staff coincided with an increase in employee and management satisfaction with self-service as measured by internal surveys, she says.
(Average per year)Source: The Cedar Group
No Permission Needed
Southern Co. of Atlanta, the nation’s largest public utility, rolled out PeopleSoft’s e-recruiting module in 2002 and launched the PeopleSoft compensation manager application a year later. Southern had adopted ESS four years earlier for its 27,000-strong workforce. The two MSS applications were aimed at 3,600 managers, says S.G. Folsom, HRIS manager.
The e-recruiting module replaced and improved a homegrown system managers were using, says Folsom. Still, some groused about having to learn new software, he says. The compensation manager module was entirely new for managers, who previously had a human being -- a performance management coordinator -- to help.
And some still do. The eventual goal is for each manager to take on all planning for compensation, but Folsom admits that many managers still hand it off to a coordinator.
For each rollout, Southern forged a strategy to explain why changes were needed. Before each launch, it published articles in its internal magazines. During the month before each rollout, a change management team promoted the benefits in seminars. “We spent a good bit of face time with managers,” Folsom says. “This was very important to success. However, you can communicate all day long, and people won’t pay any attention. They won’t worry about it until it directly affects them.”
Some managers still don’t like the applications. “The engineering managers probably resent it more because they also have engineering tasks to do. People in finance and other corporate jobs probably embrace it more,” Folsom says.
At the end of the day, Southern has one and only one position on the matter: These MSS applications are the way the company is now doing business. “We tell managers these are tools they need to make better decisions,” says Folsom. “We didn’t ask their permission.”
An Ongoing Effort to Manage Change
MSS has required a significant culture change at Florida Power & Light Co. in Juno Beach, Fla., says Gary McBean, general manager for HR shared services. “We have some people who just take to it, who seem made for the concept of information where you want it and when you want it. But this is a traditional company, and we have other managers who find these applications beneath them.” He says about one-third feel that way.
After adopting SAP’s HRIS in December 2002, Florida Power & Light went live with SAP’s MSS applications in August 2003. The company has a workforce of 11,500 in 20 states (although most employees work in Florida) and 1,000 managers using MSS applications, including those for a broad range of transactions such as making organization and payroll changes, tracking employee vacation and sick days, and generating reports for everything from employee emergency phone numbers to compensation histories. But it hasn’t been easy.
“Change management is by far the biggest issue and an ongoing challenge,” says McBean. “We implemented a lot of stuff in a very short time, and it generally went well. We put a premium on change management. But we still haven’t done enough. A priority this year is to hold hands with the managers and take other steps to make sure they are comfortable with the applications and able to use them.”
The company tried just about every approach imaginable. It had a full-time staff devoted to change management and got top-level executive buy-in before it adopted MSS. It produced written materials for publication and online explaining the business case and objectives, and executives met with groups of managers to reinforce the objectives. The company didn’t conduct a lot of educational training because the software is easy to use and would not require training, says McBean. Training was aimed at systems experts who would have to maintain the software. There was, however, computer-based training available to managers. Users were also deluged with e-mail messages following up on all the issues involved.
“The big challenge is helping the users understand all the features available and why we are using them,” says McBean. “Managers were used to calling HR and asking for reports. Now they can get their own. Putting this much information in their hands is a difficult adjustment.” Throughout 2004, he adds, the change management team will continue to meet with managers to make sure they understand the value of the MSS applications and how to make the most of them.
Like many of the adopters interviewed, McBean has not been able to calculate a specific ROI. But, like the others, he believes some of the best value is intangible. For example, the MSS applications let the company automate a weekly payroll review process to prevent mistakes. In the previous paper-based world, the company couldn’t even be sure which managers were reviewing payroll. Now, it gets accurate reviews and can tell which managers are not doing them.
“In the paper world, compliance wasn’t high,” he says. “Compliance is much higher now.” This is important, he adds, now that the federal Sarbanes-Oxley Act requires more diligence in payroll and other accounting areas.
Bill Roberts, technology contributing editor for HR Magazine,
is a freelance writer based in Los Altos, Calif., who covers business, technology and management issues.
SHRM articles: Time to Lay Groundwork(HR Magazine)
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