As recently as 10 years ago, an intranet was seen as a luxury whose cost could be justified only if it served tens of thousands of employees. Today, however, an increasing number of small- and mid-size employers are improving HR by leveraging the technology they use in day-to-day business.
Company intranets have become powerful tools, fostering team building and knowledge sharing by allowing employers to connect to employees, and employees to connect to each other. And, increasingly, intranets are being used to aid in HR administration.
Like its cousin the Internet, an intranet is a communications network designed to ease the sharing of information. The two ’nets part ways, however, when it comes to the openness of the system. While the Internet generally is open to all computer users, an intranet is usually designed to allow access only to select individuals. In the context of HR, most companies restrict intranet access to their own employees.
When designed well, says James Bassett, an industrial psychologist and business professor at California Polytechnic Institute, a company’s intranet can be “a tremendous asset.” Indeed, four years ago, UnumProvident Corp. launched a model web site that has since become one of the company’s most popular employee services. Workers who get married, divorced or have children no longer need to contact human resource staff to update their Form W-4; they can do so online. Likewise, they can update their contact information, submit their time sheets and adjust their 401(k) contributions with a few clicks. But, it’s not as easy as “build it and they will come.”
Experts urge HR professionals to work collaboratively with the information technology, marketing and internal communications teams to design a robust intranet system that employees feel like they must visit every day to get vital information and tools to do their jobs well. Also, seek input from employees early on in the design process to get buy-in, and use expanded capabilities to allow for customization.
Doing this will drive traffic to your intranet site, alleviate HR administrative duties and facilitate company communications.
Recipe for Success
Even businesses with developed intranet systems need to expand and change the designs to match evolving business needs. For example, UnumProvident’s popular intranet needed to change in 2001 in the wake of a corporate merger. Top brass at the newly formed corporation agreed the Chattanooga, Tenn.-based insurer needed a better way to communicate with its newly united but widely scattered 9,000-plus employees.
In response, the company’s technical staff joined with HR and corporate communications to expand the company’s existing intranet to include HR functions. Before then it was geared mostly toward marketing and client services.
“We needed to capture information from managers and employees. Adding an HR component just seemed to make sense,” says Tina West, UnumProvident’s director of human resource information systems.
The site also allows managers throughout the company to make staffing updates, complete performance reviews and process incentive payout distributions without filing paperwork with human resources.
The intranet’s most popular feature is an online job board that allows workers around the country to check for new job opportunities within the company. That area alone averages nearly 23,000 hits each month.
Meshing HR with the company’s long-established communications network eased administrative hassles for all UnumProvident employees, according to West. But staff convenience isn’t the system’s only plus. With employees becoming less and less reliant on HR for assistance in handling day-to-day administrative tasks, the need for HR staff has decreased by 30 percent, West says. Meanwhile, remaining HR staff has been freed up to take on more-complex projects.
“HR managers tear their hair out every day, trying to get the word out about a change in policy,” says Joel Grossman, president of PivotalClick, a Chicago-based consulting firm that has designed intranets for large companies like Sara Lee and St. Paul Travelers, as well as for smaller employers. The value of an intranet for both employees and HR professionals, Grossman maintains, is that it puts all of a company’s information in one place.
But getting intranets right proves difficult for many companies. In a scathing critique of intranets in online journal Business 2.0, computer consultant Jakob Nielsen, of the Fremont, Calif.-based Nielsen Norman Group, described most intranets as “a mess.”
Intranets, he wrote, force workers to “waste inordinate amounts of time trying to find answers to their problems, and most companies have no active programs in place to improve their intranets or make them into productivity tools.”
Nielsen offers a cautionary tale to HR and other administration divisions that launch an intranet application without regard for its impact on other departments. He describes the experience of one large employer’s accounting department that introduced an intranet application for expense reports and soon claimed huge savings because of the reduced paperwork. But the new intranet application was much more difficult to use than the traditional paper forms and caused employees to spend substantially more time on their expense reporting. As a result, the accounting department saved time, but all the other departments suffered a productivity loss which, in the long run, cost the company money.
As a result, companies need to carefully weigh whether their intranets actually cut costs or merely shift them to another department. Many HR departments, for instance, cite printing cost reductions as a major intranet benefit. But if hundreds or thousands of employees decide they want a hard copy of a lengthy publication like an employee handbook or health and retirement plan documents and simply print out the material from their computers—a costly way to mass-produce documents—the perceived savings are illusory.
To ensure that companies get the most value out of their intranet investment, Bassett urges internal intranet development teams to seek early input from a broad range of employees.
“Regardless of how much the intranet is intended to contribute to the company’s operations, it will only do so if the employees take advantage of it,” says Bassett. “To get your employees on board, you need to start with the design process.”
He urges HR professionals to have a frank discussion with employees and ask them what they want, what they would find useful and what they would actually use if it were available.
“The places where strategic goals and employee acceptance come together should form the foundation of your intranet,” Bassett says. “On this foundation can be built the components that will be used by employees while simultaneously furthering the goals of the organization.”
Companies also can garner additional information through employee focus groups and surveys. But before any application is made available to the masses, it should be tested for ease of use and tweaked or revamped if it doesn’t easily provide management, or employees, with the services they expect.
A Range of Choices
Today, many intranets run on a mix of applications business owners either purchase or lease. Many HR professionals have long been relying on so-called brochureware applications that are handy for posting static documents like retirement and health plan documents or the company’s employment policies. But HR departments also now have available a dizzying array of interactive applications that run the gamut from in-house recruiting to e-learning to outplacement services.
HR officials at Texas Instruments made strategic use of its intranet by including an online wealth management system that made it easier for employees—particularly engineers it didn’t want to lose to competitors—to quantify the worth of their benefits and the company’s total compensation package.
A recent development bolstering the growth of corporate intranets—particularly among smaller companies—is the increasing selection of reliable open-source software and applications that can be downloaded from the Internet for free or for little cost, says Lisa Sulgit, editor of the Journal of Intranet Strategy and Management, a publication that supports intranet development.
Most providers of open-source products make their money off support and add-on systems, rather than up-front licensing fees. HR managers can familiarize themselves with the wide array of open-source products through NewsForge.com—a corporate-sponsored online publication that focuses on open-source options—and download software from SourceForge, a repository of open-source code and applications. Using open-source applications, which can enable sophisticated programs for e-mail, scheduling and file sharing, can slash the cost of a company’s intranet, Sulgit says.
Increasingly, however, big companies looking to better organize their information services and resources are investing in supercharged intranets often referred to as “enterprise portals.”
At their most basic, enterprise portals provide access to human resource staples like 401(k) forms and employee directories. But more-sophisticated portals include applications that support sales initiatives, collaborative features such as electronic whiteboards (gizmos that make a computer image of the notes that are made on flipsheets during brainstorming sessions), and company and industry news. All the information gets delivered through a single web page that individual employees can customize to their own job and information needs.
Most enterprise portals are developed and perfected through collaboration among various departments, including HR, corporate communications and information technology.
High-tech giant IBM took the high-end, enterprise portal approach when building its award-winning intranet, known as W3. The intranet is used by some 300,000 workers, two-thirds of whom access it every day for a range of applications that support the company’s business development and marketing, as well as HR.
“It’s really a critical piece of our business redesign,” says Mary Barton, vice president of workforce communications at IBM.
In addition to featuring easy access to basic pay, benefits and job information, it includes an expansive collection of online courses and an unusually detailed directory that allows employees to identify themselves—and be identified by other workers worldwide—by job function, specialty, knowledge and even personal interests.
In August, IBM launched a new site on W3 that allows employees to connect with their co-workers based on nonwork-related interests. Most of the site’s content comes from established IBM clubs or employees who have volunteered to lead an interest group, such as softball or gardening, or to run an event for an existing local club.
IBM officials acknowledge that the dollar-for-dollar benefits of the company’s HR intranet services can be difficult to quantify. But taking into account the varied functions supported by W3, IBM estimates the portal saves the company huge sums every year. A hiring tool that shaves days or weeks off the recruiting cycle by allowing IBM employees to submit requisitions, state job requirements and review resumes online delivers additional value, according to company officials.
“We can say with confidence that we have saved many millions by driving self-service as an alternative to direct calls to the center or to our human resource partners,” says one IBM official. “There’s also the nonmonetary impact of creating communities and trust by communicating key messages in a real-time and consistent fashion—worldwide.”
While the investment in enterprise portals is often too steep for small and medium-sized companies, less expensive outsourced options are available from such companies as Walldorf, Germany-based SAP and Santa Clara, Calif.-based Webex. (In August, Webex acquired Intranets.com, a large developer of intranet products for smaller businesses.)
Getting Good Value
Much of the growing popularity of intranet applications stems from promises of return on investment. Part of the hype, however, comes from intranet product vendors, prompting a number of business advisers to urge caution.
Regardless of the size or scope of a company’s intranet, says CalPoly’s Bassett, “the ultimate success of an HR intranet is not in its bells and whistles, but in its value to the enterprise.”
Intranet applications are notoriously underutilized, and companies that get the most bang for their intranet buck have a firm grasp of their strategic direction, Bassett maintains. “An intranet can facilitate this process by bringing people and their ideas together, speeding up processes, increasing efficiencies and reducing costs. But it won’t happen automatically. Not all intranets add strategic value,” he says.
HR departments, he says, have much to learn from the experience at companies like Texas Instruments. To ensure that a company’s intranet becomes a strategic asset, Bassett says, “each component needs to be selected and designed with a specific value-added purpose in mind.”
Rita Zeidner is editor of the Society for Human Resource Managements online HR Technology Forum.