E-HRM

Technological optimistic voices assume that, from a

technical perspective, the IT possibilities for HRM are
endless: in principal all HR processes can be supported by IT.
E-HRM is the relatively new term for this IT supported HRM,
especially through the use of web technology. This paper
aims at demystifying e-HRM by answering the following
questions: what actually is e-HRM? What are the goals of
starting with e-HRM? What types can be distinguished? What
are the outcomes of e- HRM? Based upon the literature, an
e-HRM research model is developed and, guided by this
model, various organizations have been studied that have
already been on the 'e-HR road' for a number of years. The
major goals of e-HRM are mainly to improve HR's
administrative efficiency/to achieve cost reduction. Next to
these goals, international companies seem to se the
introduction of e-HRM to Standardize/harmonize HR policies
and processes.

Finally, e- HRM hardly helped to improve employee

competences, but resulted in cost reduction and a reduction
of the administrative burden.

Wright and Dyer (2000) present a similar line of reasoning:

e-business is emerging, and therefore HR and HR
professionals are faced with the challenge of performing in
ways that are in line with the business. In their view 'HR
functions [can] become critical partners in driving success,
but to do so requires that HR changes its focus, its role, and
its delivery systems' (Wright and Dyer, p. 52). According to
them, in e-business, the application of intranet technology
for HR is inevitable.

Before starting to define e-HRM, it is important to identify

terms that possibly carry similar meanings to the term e-
HRM. There is a fundamental difference between HRIS and e-
HR in that basically HRIS are directed towards the HR
department itself. Users of these systems are mainly HR
staff. These types of systems aim to improve the processes
within the HR departments itself, albeit in order to improve
the service towards the business. With e-HR, the target
group is not the HR staff but people outside this department:
the employees and management. HRM services are being
offered through an intranet for use by employees. The
difference between HRIS and e-HR can be identified as the
switch from the automation of HR services towards
technological support of information on HR services.

In our view it concerns the following: e-HRM is a way of

implementing HR strategies, policies, and practices in
organizations through a conscious and directed support of
and/or with the full use of web-technology-based channels.
The word 'implementing' in this context has a broad
meaning, such as making something work, putting
something into practice, or having something realized. E-
HRM, therefore, is a concept - a way of 'doing' HRM.

The e-HRM business solution is designed for human

resources professionals and executive managers who need
support to manage the work force, monitor changes and
gather the information needed in decision-making. At the
same time it enables all employees to participate in the
process and keep track of relevant information.

The e-HRM business solution excels

in: Features
modularity

the solution can be accessed and used in a web browser

security of data, protected levels of access to individual

modules, records documents and their component parts

parametric and customizability

access to archived records and documents

user-friendly interface

connectivity with the client's existing information system

(payroll accounting, ERP, attendance registration, document
systems…)

multi-language support

Advantages of the e-HRM business

solution:
gradual implementation

adaptability to any client

collection of information as the basis for strategic decision-

making

integral support for the management of human resources

and all other basic and support processes within the
company

prompt insight into reporting and analysis

a more dynamic workflow in the business process,

productivity and employee satisfaction

a decisive step towards a paperless office

lower business costs

Implementation
There are five main phases in the implementation of the
eHRM business solution.

Analysis (Infrastructure)
We analyse the existing infrastructure with regard to
quantity of data and classification of business activities.

Business processes in the company

After the existing processes have been analysed, the options
for automating these processes in the client's environment
are proposed. Finally a project plan is developed based on
the model of the processes identified.

Implementation
After a fundamental analysis of the processes in the work
team, individual modules are deployed in the client's
environment. With modular design a gradual implementation
is possible. Company-specific functionalities are discussed
with the client and built upon request.

Implementation and training

A complete knowledge of the components of the solution is a
key factor for successful implementation. The entire team of
project managers, information technology professionals and
human resources specialist are thus involved in user training
and implementation. SRCI.SI provides well planned and
quality training of future users, including initial training in
their work environment.
Maintenance
Fast technological development and development of new
modules make cooperation after the implementation
indispensable. A maintenance contract typically includes:

technical support experts available by phone, through e-mail

or on-site

adaptation of existing modules or development of new ones

application software adjustment to changes in the system

environment or operating system

functionality improvement and software upgrades in the

form of new versions

consultation about further development of the system

E – HR As the New Strategies For The

Human Resources In The 21st Century
1. Introduction

This is based on a review and summary of five leading

research (reports) produced by thought leaders about the
evolving role of HR, and how forward thinking, strategically
orientated HR professionals are increasingly adopting E- HR
Strategies.

Never before has the pressure on people management

professionals been more intense. A dramatic change in the
employment law arena is forcing Human Resources (HR) to
transform its own operations, and its strategic role in
contributing to the success of business of all size.

Today’s business environment along with the increasing

importance of technology require smart thinking, quick
action and rapid adaptation to constantly changing
conditions. The marketplace increasingly rewards those who
respond to the demand for innovation driven by the Web and
Internet, technology advances, globalization, skills
shortages, and shifting demographics. This new business
landscape means leaving behind old ways of thinking and
doing. Consequently, HR practitioners are adding a new,
technology focused dimension to their more traditional roles
as HR experts, business partners, employee advocates,
change agents and human resources management leaders.

2. Technology as an E-HR enabler

E - HR refers to the broad access to human resources data,

tools and transactions available directly on the web in most
workplaces today. It describes the "net effect" of the
explosion in web technologies and the dramatic impact this
growth has had on the way employees now receive
employment-related information through integrated self-
service applications. It also includes the variety of new
technologies available that help connect multiple systems,
tools and databases, both inside and outside organizations"
(Watson Wyatt Research Report - The Net Effect).

Much has been written in the past about HR acting as a

strategic partner. HR leaders have been told repeatedly that
they must earn a "seat at the table" with top management in
order to play a significant role in the development of
organizational strategies and business success. But, while
many HR leaders have become active participants in
strategy sessions occurring in boardrooms around the world,
they are continually hindered by the need to think and act
strategically, while still overseeing the time-consuming
administrative aspects of day-to-day HR.

It is clear that HR must find a way to relieve itself of

administrative burdens (without abdicating their
administrative role) in order to maximize its contribution to
business strategy.

Technological change is a key driver for HR transformation,

providing the foundation to support HR’s growing strategic
focus. In particular, Web and Internet technologies have
already given workers direct access to each other, to HR,
and to business information with such ease and intelligence
that every worker can contribute more directly to business
results.

Although great strides have been made in recent years to

use technology to simplify HR, technology until now offered
only partial solutions to HR’s challenges. Consider the
employee self-service model that evolved throughout the
1990’s. Developed in part due to employee and manager
complaints about the impersonal and inefficient services
offered by outsource solutions of the early 1990’s, self-
service has proven to be extraordinarily popular.

A recent research report on E-HR people management

strategies is associated with a nearly 6.5 percent increase in
a company’s market value. E - HR helps maximize a
company’s progress toward a knowledge economy and
increased shareholder value.

3. Small and medium sized business realities

One of the biggest sources of frustration for small and

medium sized business has been the inability to easily and
cheaply use electronic technologies to better manage their
business resources. Enterprise Resource Planning (ERP)
solutions that rely on expensive mainframes, and high-level
programming skills are simply unaffordable by HR functions
in small and medium business.
Human resource functions have struggled for well over a
decade to shift their focus from administration to more
strategic contributions. From interactive voice response
systems and multimedia kiosks to implementing an
enterprise- wide HR/payroll system, people management
professionals in large organizations have invested heavily in
reducing the administrative load on HR. Until recently, costs
were high and progress was slow.

The sudden explosion in Internet technology, however, has

dramatically accelerated the transition to a more
strategically orientated HR function. New resources are
appearing that enable today’s employees and managers in
any sized company to complete HR- and benefits-related
transactions on their own. E - HR liberates human resources
from its administrative shackles and provides the foundation
for a collegial, flexible workplace where employees have
easy access to communication tools.

In the meantime, the general comfort level using the web

has increased so steadily that it has become the preferred
media in the workplace — making the introduction of E - HR
a relatively ‘painless’ and cost efficient welcome event in
almost any organization.

The use of Internet and Web technology has also liberated

management to re-assume its abdicated role of day-to-day
people management without the endless wait for HR to
eventually process requests for information, and/or provide
vital reporting information needed to make swift people
management decisions. Hopefully this will lead to the
‘extinction’ of the old type of HR practitioner who publicly
proclaim the need to outsource HR Administration because it
is too complex and arduous to handle in-house. The ‘smart’
thing to do would be to invest in upskilling line managers
with the ability to use the new HR technologies to take on
their strategic HR role, and to outsource non value-adding
HR Administration.

4. Getting from here to there

To successfully make the transition from HR being an

administrative cost HR becoming an E - HR strategic partner
of line management, human resources professionals must
rethink their strategy for transforming the delivery of
information and services to managers and employees. New,
evolving standards such as extensible mark-up language
(XML) are dramatically increasing the ease with which HR
can integrate various systems and databases into an E - HR
environment. These technologies also help present
information in a user-friendly manner that is available to
employees and managers at all times and from all locations.

Watson Wyatt, a USA based eHR ™ company advocates that

for companies to become E – HR focused, they need to move
their HR communications and transactions to the Web and
Internet.

The Internet provides HR with the ability to transfer

information and many common administrative tasks to
employees — freeing HR personnel to pursue more strategic
initiatives. Benefits information, employee data changes and
other transactions that monopolized an HR department's
time can now be quickly handled via the Internet.

Employees and managers are embracing this "self-service"

direction.

The functionality of the web is appealing for many reasons

beyond cost:

· A more mobile workforce needs access to HR

information at various locations and times Changes in work
style resulting from the proliferation of more functional
wireless devices (phones, pagers, handsets, laptops and
palmtops)

Companies that are ready to adopt an E - HR Strategy and

realize that improved communications, reduced costs and
fewer redundancies can start with the following action steps:

· Establish solid executive support for an E – HR Strategy.

Whether a company is small, medium, or large; there is an
initial investment of money and resources required to be
successful. Be sure your business case states the return on
the investment.

· Understand how far the core HR systems extend today. A

technology audit will help determine the effectiveness of
your HR systems and databases.

· Know the company’s IT direction and limitations in areas

such as a corporate Internet, and remote computing strategy

· Develop a formal strategy for your HR web that improves,

integrates existing content and provides a framework for
seamlessly providing access to users of the systems(s).

· Get the most effective specialized support possible (from

the IT function and vendors) to deal with complicated issues
such as legal, communications, and data integrity and data
security.

· Finally, build early impact into the service delivery plan by

scheduling clear milestones and achieving them. Early
returns on your global service delivery initiative can only
help build support at all levels within your multinational
organization.

5. HR technology focus has significant impact on

company shareholder value
February 19 2002 - Businesses focusing HR technology
initiatives on achieving specific, quantifiable improvements
can see as much as a 6.5% increase in company shareholder
value. But companies with "softer" goals may find
themselves with negative returns.

These conclusions come from Watson Wyatt's recently

released 2001 Human Capital Index(R) (HCI) study.

"When it comes to implementing HR technologies, the focus

of the initiative is the key driver in achieving financial
results," says Ed McMahon, National Practice Leader, eHR
Canada, Watson Wyatt. "The same technology initiative
implemented in two similar organizations, but with a
different focus, can actually result in a dramatically different
impact on company shareholder value."

The HCI study shows that returns on that investment can be

significant when technology is used primarily to:

- help reduce costs,

- improve employee service,

- increase transaction accuracy.

But where HR service technology is focused on less

quantifiable goals - for example enhancing communication
and promoting culture change - it is associated with a
significant decrease (-14.3 percent) in shareholder value.

Primary focus for HR technology Expected change

in shareholder value

Reduce costs
+2.3%

Improve service to employees/managers +2.3%

Increase transaction accuracy/integrity +1.9%

Promote common corporate culture -6.6%

Enhance employee communication -7.7%

"The important point here is not that HR technology

shouldn't be used to enhance employee communication and
build organizational culture. Both are important components
of organization success, and both are valuable results of
successful HR technology implementations," notes McMahon.
"But making them the primary focus of those technology
implementations negatively impacts the results."

The data can also be used to measure factors such as impact

of HR technology choices on total returns to shareholders
over 5 years. Most HR organizations are now dependent on a
combination of Enterprise Resource Planning (ERP) systems,
outsourcing and individual "best- of-breed" HR applications.
The HCI study shows that those decisions may also have an
impact on market value, depending on company size.

Five-Year Total Return to Shareholders, by Company Size

Primary HR Fewer than 1,000-

More than

Technology 1,000 10,000

10,000

Choice Employees Employees

Employees

ERP -19%
33% 92%

Total outsourcing -12% -3%

71%
Integration of multiple

HR applications 5%
78% 82%

"Clearly, larger organizations are achieving significant

returns for their shareholders from properly focused HR
technology initiatives, regardless of the primary HR
technology chosen for service delivery. For small and mid-
size firms, however, the technology choice itself can
severely restrict any positive impact on financial results,"
observes McMahon.

The HCI study was based on a comprehensive survey of HR

practices at a total of 750 North American and European
companies, each with a track record of at least three years
of total returns to shareholders (TRS), 1,000 or more
employees and/or a minimum of US$100 million in revenues
or market value.

According to Watson Wyatt: " The survey data is matched to

objective financial measures of a company's worth, including
its market value, three- and five-year TRS, and its Tobin's Q,
which measures a company's ability to create economic
value beyond its physical assets."