Sure its cool, but do you need it?

HR departments may like the potential of new technology but they aren’t even using the old technology correctly

The common complaint about technology is that it is impossible to keep up with its constant, rapid change. No sooner do you get the latest software up and running or the fastest computer on your desktop and it is out of date.

Many organizations introduced HR systems through the mid- and late-’90s, but already vendors are talking about the new bells and whistles everyone absolutely has to have.

“There is no doubt that the technology has advanced really dramatically and there are all kinds of things that you couldn’t do two or three years ago,” said Ed McMahon, regional practice leader e-HR with Watson Wyatt Canada and author of Bricks to Clicks.

But buying new technology for the sake of new technology is a fool’s game, McMahon said. “Technology companies say you definitely could, you should. We say you can. But should you?”

The concern is that technology is being introduced faster than HR departments and organizations can adapt it.

“There is a fairly consistent demand to upgrade and keep technology current, but my sense is there is not a lot of demand for brand new stuff,” said McMahon. Rather, organizations are still struggling with how to maximize the return on existing technologies.

But vendors aren’t the only ones putting pressure on HR departments to improve their HR systems. A lot of organizations are seeing employee expectations increase at a dramatic pace, said McMahon. Employees may not care about making personal information changes online, but will consider the system a failure if there is no employee directory or if they can’t access their pension data with a few clicks of the mouse. They feel that since the Internet came along six or seven years ago and they can do their banking online, they should be able to do just as much with the corporate intranet. Of course the reality is that the typical HR department has far fewer resources than the banks to create anything even remotely approaching that level of customer service.

The big thing these days is portals, said McMahon. These are content aggregators that create a single point of access from which users can launch applications and access forms.

That may make a lot of sense, but organizations need to ask themselves if they really need a content aggregator. Particularly since much of the technology already implemented still isn’t being used effectively.

“I love technology, I’m a big fan. But I’m a big fan of technology properly applied,” said McMahon. Too often organizations aren’t getting the return on their investment.

“In the ’90s, a lot of enterprise resource planning (ERP) implementations were done on the basis that technology will improve processes. Put the right technology in and processes will change.”

This was untrue. It takes a lot of time and energy to change processes and organizations didn’t dedicate enough resources to successfully move to new systems, said McMahon.

A lot of organizations were pushed into implementing HR management systems because of concerns about Y2K, said John Johnston, director of strategic consulting and e-HR with Arinso Canada.

“The common comment was that it took a lot longer and cost more than we expected,” he said.

Now, HR departments that didn’t take all of the options the system offered or else are thinking about adding new functionality are trying to get the funding from the CFO, but most times they don’t know how to make the business case.

Employee self service is another hot topic, but the business leaders can’t see the value in a considerable capital expenditure just so HR doesn’t have to process a few address changes.

In Canada where large organizations are relatively rare it is difficult to get economies of scale, he explained.

Manager self service and portals are also hot topics but there is little actual activity. It is mostly just talk, said Johnston. Without the business case, HR departments aren’t getting the green light to update systems.

Besides the considerable interest in self-service bolt-on applications, there is little going on from the vendors’ point of view, said Johnston.

New versions come out but any of the upgrades after the decimal point (PeopleSoft 8.0 was followed by 8.1, 8.2) are typically just fixing issues that emerge once users start putting the software through its paces, said Johnston.

SAP is slated to introduce a new version of its package in the third quarter of this year but that will be the first significant change in the last two years. On the other hand, some PeopleSoft clients have been considering the option of upgrading the system architecture, moving from the old client server model to the new browser-based functionality.

“I wouldn’t say that people who put in a system five years ago are looking at putting in a new system. They may be looking at whether or not to upgrade, but that is largely driven by vendor support plans,” he said.

“At a certain point and time the vendor says, ‘We are not going to support this system anymore.’ But some of the vendors are actually extending their period of support right now.”

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