For further information:
Helen Axel
(908) 236-2351
For Release Wednesday, April 15, 1998
Release #4410
HUMAN RESOURCES: THE BATTLE FOR STATE-OF-THE-ART INFORMATION TECHNOLOGY
While most human resource departments are streamlining their operations, HR units often lack adequate budgets and clout to achieve optimum solutions to their information technology needs, according to a report issued today by The Conference Board.
The report notes that the HR function is often shortchanged by new enterprise-wide information technology systems and by budget allocations that typically favor product-producing areas over administrative ones.
Although nearly 80% of the 122 HR executives surveyed have already or are now implementing integrated HR information systems, only 6% consider their current HR operations to be equipped with state-of-the-art technology. The surveyed senior executives represent corporations in both the U.S. and Europe.
THE TECHNOLOGY PARADOX FOR HR
"Not many corporations seem willing to believe that HR can significantly improve its productivity with greater investments in technology, even though such investments can lead to better HR planning and utilization of the organization's human assets," says Helen Axel, senior research fellow at The Conference Board and author of the report. "How the HR function fares in its information technology transformation often depends on its leadership and status within the organization."
The Conference Board report points out that mergers and acquisitions and the rapid expansion into unfamiliar global markets have caused technological incompatibility and differences in the level of sophistication among many corporate business units.
Priority setting in corporate budgets may also contribute to the chaos within a recently merged company or a foreign subsidiary. Because of emphasis on cost-cutting and visible productivity improvements, HR and other staff functions often are not allocated funds to upgrade their systems as quickly as product-producing parts of an organization.
However, survey participants see the introduction of new, more powerful HR information systems and software, along with more highly developed communications networks, as an opportunity to reinvent and reposition the HR function. They believe freeing up HR resources to perform other, more strategic tasks will increase the HR function's importance to the organization, allowing it to be perceived as a more significant player in the business. The goal for HR is to find an optimum balance between its strategic and administrative responsibilities.
More powerful HR information systems and related technology have been important factors in the growth of two other options available to companies for improving the delivery of HR services - shared services and outsourcing. Shared services depend on enhanced internal capability to deliver greater consistency and speed in administrative tasks while saving money by avoiding costly duplication. Outsourcing uses outside providers to deliver information technology.
WHY THE MILLENNIUM PROBLEM CAN ACTUALLY HELP
Among the companies that are working with vendors to develop new information systems, most are relying on their chosen provider for 2000 compliance (The problem arises because most computers use only the last two digits of the year and will read 2000 as 1900 when recording dates). For some organizations, the compliance issue is one of the major reasons for developing an integrated human resource information system, or upgrading a current system using customized software from a third party. Other organizations are relying on expertise within their own information technology departments to make the necessary adjustments.
In the majority of surveyed companies, project teams or task forces that include members of the HR and IT departments have primary decision-making authority for major changes in HR technology, but senior corporate management has the ultimate say 34% of the time. Decision-making that is confined within the HR department is rare, but is a more likely occurrence in non-U.S. based companies.
HOW TO SUCCEED
Companies report that useful procedures for ensuring a smooth technological transition include phasing of the implementation process and building internal networks through e-mail, the Internet, and intranets. They also recommend allocating sufficient time and funds; maximizing training opportunities; setting performance expectations; and having HR/IT expertise on staff. Paying attention to these factors will ensure better cultural transformation, giving those less technologically-inclined more assistance in making the change.
Two broad areas in which technology can make a significant impact which still need further attention are developing better HR planning and strengthening the organizational network. Improving these areas would require closer examination of staffing, succession planning, career development and tracking, and knowledge management.
Company experiences included in the report include those of Champion International Corporation; Flexsys; Mobil Corporation; Roll-Royce; Boehringer Mannheim Group; Lear Corporation; Mactel; MAPCO; Deutsche Bank. - 30 - Source: HR Executive Review: Technology's Role in HR Management, Volume 5, Number 4, 1998 The Conference Board
Information on ordering this publication can be obtained by calling The Conference Board's Customer Service Department at 212-339-0345. Copies are available free to the media (Please call 212-339-0231).
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