Q&A with Ed McMahon
Canadian HR Reporter sat down with Ed McMahon, national practice director, technology solutions for Watson Wyatt Canada and author of Bricks to Clicks: e-strategies that will transform your business. McMahon talked about the state of technology today, where it’s going in the future, what HR should be doing and dispelled a few myths along the way.
CHRR: What’s hot on the technology scene right now?
McMahon: What’s hot is best-of-breed functional applications rather than all-encompassing application suites. What we’re seeing is a preference for picking something that’s really good at the recruitment process, or payroll or online learning — I’m just picking these at random — rather than we can do everything in the context of an ERP (enterprise resource planning) system.
CHRR: Why is that?
McMahon: It’s because technology budgets are limited. There’s a huge focus on return-on-investment and HR people, like everybody else, are challenged to do more and better service delivery with fewer dollars. More for less is not going away and it’s sometimes easier to demonstrate ROI with a very specific application than it is with a broad suite. If I name specific technology vendors, I’m not taking shots at them. I’m only using them as examples. So it’s sometimes easier to demonstrate ROI with Recruitsoft than it is with PeopleSoft because PeopleSoft is big and complex and takes a long time like any ERP does. When organizations have pointed issues with their HR processes, it’s sometimes easier to buy very pointed solutions for those problems.
CHRR: While that could be an easier ROI sell, is it practical to be patching a bunch of systems
together?
McMahon: I don’t think patching a bunch of systems together is nearly as difficult today as it used to be. Ten or 20 years ago you had rather proprietary back-end systems that consisted of a company’s database structure and a weird version of some data engine. What we’re seeing now is a huge amount of standardization both at the front end and the back end. The front end is moving toward the Web and the back end is moving towards some kind of industry standard database format.
CHRR: Does this mean the systems are becoming easier for HR practitioners to use?
McMahon: I’m actually not convinced that it’s becoming easier for practitioners to use. I mean, you use a computer, right? You use Excel, or any of those applications. Are they getting easier? It’s kind of an intuitive thing — if they’re managing more things, then they’re probably slightly more complex to use. I think they’re becoming more competent but I’m not sure they’re becoming simpler.
CHRR: Many companies are using software to do things they’ve never done in the past, such as succession planning and knowledge management. Is this an important step?
McMahon: Yes, it is. It’s a very important thing for companies to be doing, especially succession planning. The demographics are, depending on who you listen to, either catastrophic or mildly frightening or just something we should be aware of. But demographics are not working in favour of Canadian industry, particularly knowledge-based industries, and so anything an organization can do to understand its own demographics and understand the labour market in which it’s going to compete is a good thing. Technology can help because there’s a certain amount of brute force number crunching work that needs to be done in the background to understand your succession issues and your internal and external labour market issues.
CHRR: What isn’t working? Is there stuff out now that held a lot of promise when it was first talked about but turned out to be impractical?
McMahon: Portals.
CHRR: Are portals dead?
McMahon: No. Portals will rise again. What I said in my book is basically you should really give some thought to this whole Web thing before you spend a gajillion dollars building yourself an online store. Does that fit your business model? Does it fit the kind of customer relationship you want to have? The reality is just because you implement new technology does not mean people’s behaviour is going to change. What happened with portals is quite analogous to what happened in the dotcom world. People rushed into deploying them, thinking “this is really cool. We can do things.” And they didn’t really give enough thought to what is it they were trying to accomplish. With portals, like any other technology, somebody has to create a business case. And the business case says when we put the portal in place, a whole bunch of good things will happen and processes will be different and the world will be a better place. And what often happens with portals is the portal goes in and nobody uses it and then the business case falls apart and the portal is deemed to be a failure. I would suggest it’s probably not a failure. The technology works just fine. The fact that nobody is using it is an HR issue, not a technology issue.
CHRR: Is one of the problems that a lot of HR people don’t know what they should be using a portal for?
McMahon: No, they don’t. We spend an awful lot of our energy helping HR people make decisions about the use of technology and where it will actually help in the delivery of your HR function and where it won’t.
CHRR: So what should a portal be used for?
McMahon: Employee directories, as boring as it sounds. Everybody wants to know, particularly in large global organizations, who’s that guy in the Chicago office who does the purchasing? And what’s his phone number? And if you work in a large global organization, it’s a real pain in the butt finding that information. So, as boring as they sound, directories are a big thing. The term portal itself is an issue in the marketplace. Our perspective on portals is probably different than what you might hear from a technology vendor. To a technology vendor like Plumbtree, a portal is a piece of software that you deploy. That’s not the definition that we use around portals, and I think the difference in these definitions is probably causing some confusion and limiting the adoption of these technologies. For us, a portal defines an individual’s relationship with their company. We have this term that we use — contextual relevance — which I keep trying to find a simpler way to say because it sounds way too consultantly. But what we’re trying to get at is that for the employee, the portal should be the primary home for them while they’re in their working space and logged on to their computer. What contextual relevance means is all the information that I personally need to do my job and that governs my relationship with my company, like my HR stuff, my benefits, my employee stock purchase portfolio, my reports and my applications that are most important to me in my job. So a portal brings that work to life for me personally. And it doesn’t matter if you create that contextual relevance using Plumbtree or Microsoft.net or Microsoft Outlook or paper — I guess paper is a bit of a stretch — but a portal is about this concept of contextual relevance and relationship with the employee.
CHRR: What’s going on with self-service? Everyone says the number one thing an employer needs to do is communicate it to staff to make it work. Are there any technology issues with self-service?
McMahon: Bluntly, no. There aren’t. Employee self-service works. Companies have been using it for years. Technology is not the issue. The issue is the behaviour change that is required. Every dollar worth of business benefit you anticipate from technology will only happen when people change their behaviour. No behaviour change, no benefit, no dollars. The issue with employee self-service is not the technology — it’s robust, it’s easy and it works. The issue with employee self-service is related to, you can call it change management, you can call it human capital alignment, you can call it whatever you want. But what it comes down to is are people changing their behaviour to take advantage of these new systems in a way that’s consistent with our business case and, if they’re not, what are we doing about it?
CHRR: Is there too much focus on return-on-investment?
McMahon: No. I don’t think there is such a thing as too much focus on ROI. HR people would love to have ROI go away, but it’s not. It’s never going to go away. Until somebody comes up with a better decision-making tool for senior executives, get over it. Everybody does ROI. Listen to conversations with people. If you go out with your buddies for a beer or if you’re having an internal discussion, people will say, “Oh, it’s not worth it.” Well, they’ve done an ROI calculation. CEOs and CFOs and COOs and senior vice-presidents of HR are pretty good at doing ROI calculations. I actually think HR people have been barking up the wrong tree for years trying to say, “You know what? You shouldn’t try to calculate ROI on this.” The last time we heard that was during the dotcom boom and people were saying, “Well, we shouldn’t try to do ROI. It’s a new economy.” Well, you know what? There’s no new economy. ROI is here to stay, it’s not going away and people had better just learn to deal with it. Which is not to suggest ROI is always going to be positive. What senior management wants to know is if there is going to be a persistent long-term cost for doing this, what is it? If I just have to put this in because it’s like hydro and I should stop complaining about it, just say so. Don’t try to come up with some really complex business case that says ROI will be positive in 27.8 months on something for which we intuitively know there is no positive ROI.
CHRR: What would you like to see in the future?
McMahon: More, and easier, personalization is something I would like to see coming down the road for HR. It’s difficult to do well at this stage of the game. The other thing I would love to see is more effective technology tools for working in groups or working in a collaborative way. The old way of working was, “I worked at Chrysler, I designed a car, me and my guys did it and then we went out shopping for stuff.” And that’s just not how the world works anymore. A couple of years ago I was engaged in a technology project with a team of more than 200 people globally. We had people in Britain, California, Massachusetts, Toronto and Chicago. Working in distributed teams that span the boundaries of many organizations is going to be the way the world will work. To go back to the Chrysler example, that’s just not the way Chrysler designs cars anymore. They invite the guys who make brakes in at the design stage, and they may even invite competitors in, and say, “You tell me how to design the brakes for this car and how much they’re going to cost.” That’s a much different approach to work than what used to go on. And also distance work. People are going to want to work at home, but it’s a pain in the butt really. Dialing up to your network and all that stuff — how tedious is that? It’s slow and it’s painful. The remote workforce is something that’s sort of looming that needs to be dealt with.
CHRR: What’s hot on the technology scene right now?
McMahon: What’s hot is best-of-breed functional applications rather than all-encompassing application suites. What we’re seeing is a preference for picking something that’s really good at the recruitment process, or payroll or online learning — I’m just picking these at random — rather than we can do everything in the context of an ERP (enterprise resource planning) system.
CHRR: Why is that?
McMahon: It’s because technology budgets are limited. There’s a huge focus on return-on-investment and HR people, like everybody else, are challenged to do more and better service delivery with fewer dollars. More for less is not going away and it’s sometimes easier to demonstrate ROI with a very specific application than it is with a broad suite. If I name specific technology vendors, I’m not taking shots at them. I’m only using them as examples. So it’s sometimes easier to demonstrate ROI with Recruitsoft than it is with PeopleSoft because PeopleSoft is big and complex and takes a long time like any ERP does. When organizations have pointed issues with their HR processes, it’s sometimes easier to buy very pointed solutions for those problems.
CHRR: While that could be an easier ROI sell, is it practical to be patching a bunch of systems
together?
McMahon: I don’t think patching a bunch of systems together is nearly as difficult today as it used to be. Ten or 20 years ago you had rather proprietary back-end systems that consisted of a company’s database structure and a weird version of some data engine. What we’re seeing now is a huge amount of standardization both at the front end and the back end. The front end is moving toward the Web and the back end is moving towards some kind of industry standard database format.
CHRR: Does this mean the systems are becoming easier for HR practitioners to use?
McMahon: I’m actually not convinced that it’s becoming easier for practitioners to use. I mean, you use a computer, right? You use Excel, or any of those applications. Are they getting easier? It’s kind of an intuitive thing — if they’re managing more things, then they’re probably slightly more complex to use. I think they’re becoming more competent but I’m not sure they’re becoming simpler.
CHRR: Many companies are using software to do things they’ve never done in the past, such as succession planning and knowledge management. Is this an important step?
McMahon: Yes, it is. It’s a very important thing for companies to be doing, especially succession planning. The demographics are, depending on who you listen to, either catastrophic or mildly frightening or just something we should be aware of. But demographics are not working in favour of Canadian industry, particularly knowledge-based industries, and so anything an organization can do to understand its own demographics and understand the labour market in which it’s going to compete is a good thing. Technology can help because there’s a certain amount of brute force number crunching work that needs to be done in the background to understand your succession issues and your internal and external labour market issues.
CHRR: What isn’t working? Is there stuff out now that held a lot of promise when it was first talked about but turned out to be impractical?
McMahon: Portals.
CHRR: Are portals dead?
McMahon: No. Portals will rise again. What I said in my book is basically you should really give some thought to this whole Web thing before you spend a gajillion dollars building yourself an online store. Does that fit your business model? Does it fit the kind of customer relationship you want to have? The reality is just because you implement new technology does not mean people’s behaviour is going to change. What happened with portals is quite analogous to what happened in the dotcom world. People rushed into deploying them, thinking “this is really cool. We can do things.” And they didn’t really give enough thought to what is it they were trying to accomplish. With portals, like any other technology, somebody has to create a business case. And the business case says when we put the portal in place, a whole bunch of good things will happen and processes will be different and the world will be a better place. And what often happens with portals is the portal goes in and nobody uses it and then the business case falls apart and the portal is deemed to be a failure. I would suggest it’s probably not a failure. The technology works just fine. The fact that nobody is using it is an HR issue, not a technology issue.
CHRR: Is one of the problems that a lot of HR people don’t know what they should be using a portal for?
McMahon: No, they don’t. We spend an awful lot of our energy helping HR people make decisions about the use of technology and where it will actually help in the delivery of your HR function and where it won’t.
CHRR: So what should a portal be used for?
McMahon: Employee directories, as boring as it sounds. Everybody wants to know, particularly in large global organizations, who’s that guy in the Chicago office who does the purchasing? And what’s his phone number? And if you work in a large global organization, it’s a real pain in the butt finding that information. So, as boring as they sound, directories are a big thing. The term portal itself is an issue in the marketplace. Our perspective on portals is probably different than what you might hear from a technology vendor. To a technology vendor like Plumbtree, a portal is a piece of software that you deploy. That’s not the definition that we use around portals, and I think the difference in these definitions is probably causing some confusion and limiting the adoption of these technologies. For us, a portal defines an individual’s relationship with their company. We have this term that we use — contextual relevance — which I keep trying to find a simpler way to say because it sounds way too consultantly. But what we’re trying to get at is that for the employee, the portal should be the primary home for them while they’re in their working space and logged on to their computer. What contextual relevance means is all the information that I personally need to do my job and that governs my relationship with my company, like my HR stuff, my benefits, my employee stock purchase portfolio, my reports and my applications that are most important to me in my job. So a portal brings that work to life for me personally. And it doesn’t matter if you create that contextual relevance using Plumbtree or Microsoft.net or Microsoft Outlook or paper — I guess paper is a bit of a stretch — but a portal is about this concept of contextual relevance and relationship with the employee.
CHRR: What’s going on with self-service? Everyone says the number one thing an employer needs to do is communicate it to staff to make it work. Are there any technology issues with self-service?
McMahon: Bluntly, no. There aren’t. Employee self-service works. Companies have been using it for years. Technology is not the issue. The issue is the behaviour change that is required. Every dollar worth of business benefit you anticipate from technology will only happen when people change their behaviour. No behaviour change, no benefit, no dollars. The issue with employee self-service is not the technology — it’s robust, it’s easy and it works. The issue with employee self-service is related to, you can call it change management, you can call it human capital alignment, you can call it whatever you want. But what it comes down to is are people changing their behaviour to take advantage of these new systems in a way that’s consistent with our business case and, if they’re not, what are we doing about it?
CHRR: Is there too much focus on return-on-investment?
McMahon: No. I don’t think there is such a thing as too much focus on ROI. HR people would love to have ROI go away, but it’s not. It’s never going to go away. Until somebody comes up with a better decision-making tool for senior executives, get over it. Everybody does ROI. Listen to conversations with people. If you go out with your buddies for a beer or if you’re having an internal discussion, people will say, “Oh, it’s not worth it.” Well, they’ve done an ROI calculation. CEOs and CFOs and COOs and senior vice-presidents of HR are pretty good at doing ROI calculations. I actually think HR people have been barking up the wrong tree for years trying to say, “You know what? You shouldn’t try to calculate ROI on this.” The last time we heard that was during the dotcom boom and people were saying, “Well, we shouldn’t try to do ROI. It’s a new economy.” Well, you know what? There’s no new economy. ROI is here to stay, it’s not going away and people had better just learn to deal with it. Which is not to suggest ROI is always going to be positive. What senior management wants to know is if there is going to be a persistent long-term cost for doing this, what is it? If I just have to put this in because it’s like hydro and I should stop complaining about it, just say so. Don’t try to come up with some really complex business case that says ROI will be positive in 27.8 months on something for which we intuitively know there is no positive ROI.
CHRR: What would you like to see in the future?
McMahon: More, and easier, personalization is something I would like to see coming down the road for HR. It’s difficult to do well at this stage of the game. The other thing I would love to see is more effective technology tools for working in groups or working in a collaborative way. The old way of working was, “I worked at Chrysler, I designed a car, me and my guys did it and then we went out shopping for stuff.” And that’s just not how the world works anymore. A couple of years ago I was engaged in a technology project with a team of more than 200 people globally. We had people in Britain, California, Massachusetts, Toronto and Chicago. Working in distributed teams that span the boundaries of many organizations is going to be the way the world will work. To go back to the Chrysler example, that’s just not the way Chrysler designs cars anymore. They invite the guys who make brakes in at the design stage, and they may even invite competitors in, and say, “You tell me how to design the brakes for this car and how much they’re going to cost.” That’s a much different approach to work than what used to go on. And also distance work. People are going to want to work at home, but it’s a pain in the butt really. Dialing up to your network and all that stuff — how tedious is that? It’s slow and it’s painful. The remote workforce is something that’s sort of looming that needs to be dealt with.
