Retooling people management in heavy industry<!-- sponsoredarticle 20071215-->

Old economy firms no longer need to feel they’ve been left standing at the station as the high-tech economy leaves them behind

High tech they’re not. Nor do they want to be.

But staying true to core manufacturing competencies has not stopped TrentonWorks Ltd. from using modern business applications to overhaul the way they manage their people by putting in a new human resource management system.

Being both a manufacturer of railway cars and located in Trenton, Nova Scotia, two hours east of Halifax combined to put one big obstacle in their way. They did not have the IT resources required to run a modern HRMS, and they had little chance of finding them anytime soon.

Their IT department was small and good at what they had been doing but not expert in the languages or programming that would be necessary for a typical information system implementation, says Bob Hickey, vice-president of finance at TrentonWorks. “It’s not easy in this neck of the woods to keep those expert people here and I just didn’t think we wanted to be out there competing for top-notch IS people.”

Instead they’ve become one of a handful of organizations in the country to use an application service provider (ASP), paying a monthly fee to access the application over the Internet while the service provider takes care of getting the software up and running and all maintenance concerns afterwards.

According to manager of employee relations and project manager for the implementation, Christine Druhan, it started to become obvious two or three years ago they needed something to help them manage the important workplace information that was necessary to make informed business decisions.

Supervisors who asked for information about absenteeism, for example, often found the reports did not match at all with what they knew to be true down on the frontlines. Everyone was always certain their data was right, but time and again contradictions would pop up, she says.

“We were working in so many segregated worlds. If someone came in to change an address, it often meant forms had to be done in triplicate.”

At the same time, the HR department was pushing, and being asked to play a more strategic role in the organization: having a greater role in recruitment and training for example. And to do that, they too wanted more and better information at their fingertips. “It’s amazing how little data we were working with,” she says.

So in July last year, a small selection team — setting out with a budget of just $150,000, since expanded to about 10 times that — was put together and did some preliminary research of various vendors.

The project was totally HR-driven, says Druhan, but the HR department realized they also had very little idea of what they needed and called in a consultant to help them choose a vendor.

“HR had very little technical knowledge and I wanted to keep it that way. My urge to go out and learn everything there is to know about UNIX was just not there,” she says. “We had enough sense to realize we did not have the resources.”

From that, a shortlist of five or six was created.

After going out and test-driving some of the software and doing some reference-checking, the selection team decided to go with D.L.G.L. of Blainville, Que. (north of Montreal), using them as an ASP. TrentonWorks then approached its Portland, Oregon, head office -- which had no familiarity with ASP providers -- with its recommendation. “It was quite new to them. They were shocked initially with the concept,” says Hickey.

Aside from the ability to implement the system without hiring IT people, Hickey says the speed with which the system could be up and running was appealing. As was the unique way of financing the system.

“Either way we went it was going to cost us big bucks,” he says.

“But this method of financing it was very attractive to us from a tax point of view and a cash-flow point of view.” Going with D.L.G.L. requires no capital outlay up front. The client simply signs a contract committing them to monthly payments over a fixed period of time. According to D.L.G.L. co-president Jacques Guénette, the average cost of D.L.G.L. ASP service ranges from $15,000 to $40,000 a month.

Once the contract was signed in March, D.L.G.L. sent a team to Nova Scotia to study the operation and figure out exactly what was needed. And by early July, the TrentonWorks implementation team — made up of the nine people from across the organization who would be using the system the most during phase one — was in Blainville testing the various modules.

In what was essentially a classroom setting, each team member sat in front of a terminal and put the system through its paces. For payroll, the team entered data to simulate May’s payroll while accident reports were entered into the health and safety module. Any changes that needed to be done were done immediately and by the end of the three weeks the system seemed ready to go.

While there is still no standard way of doing things yet for such a new model, TrentonWorks did things a little bit differently than what is expected.

In theory, an ASP allows a customer to access the software from a remote server over the Internet. However TrentonWorks decided at the outset that while they liked the idea of D.L.G.L. taking care of implementation, maintenance and all the upgrades, they weren’t comfortable with the idea of having the server so far away and chose instead to have it set up on site. All of the maintenance would stay with D.L.G.L., “All we have to be able to do is turn it off and turn it on and reboot it,” says Hickey.

“The real added value of an ASP is to take responsibility for managing the application and the infrastructure away from the client. Where (the server) is, is not really key because we are still managing the infrastructure from here in Blainville,” says Guénette.

In hindsight, they probably would leave the server in Blainville, admits Hickey. “But at the time, I just couldn’t make that stretch.”

With that stage of testing done, the team returned to Trenton, taking the two servers with them. The second is a backup, with a further redundancy precaution in place in Blainville, where D.L.G.L. has copies of the software so that in the unlikely event of a double failure, TrentWorks can access the software from Blainville in true ASP fashion, and began to prepare to go live. Before that, D.L.G.L. sent a team down to “test the hell out of it again,” says Hickey.

The first phase was rolled out earlier this month and includes payroll, benefits, basic HRM, vacation packages and pensions as well as a function for an equipment loan tracking module. But the technical side is just one part of an HRMS implementation.

TrentonWorks is a heavy manufacturing, heavily unionized workplace. Most of the 1,200 employees belong to the United Steelworkers and about half of those have been there for 20 years or more, says Druhan. Not surprisingly, a lot of people were reluctant to embrace the change a new HRMS required and brought with it.

As part of the system implementation, they put 1,200 people on direct deposit. Many didn’t like that, unhappy about not having a cheque put in their hands every two weeks. Another sizable percentage of staff didn’t even have bank accounts.

It does take a little bit of hand-holding to help people work through those changes and some staff were reluctant to let go of that control, giving up some of their turf and working more closely with other departments. “The biggest change in my opinion was that payroll was always just payroll, but now payroll and HR are much more interrelated,” she says. “It’s been slow and there’s still a bit of ‘I don’t want people doing that.’”

But any early reticence is disappearing. “My biggest challenge now is managing expectations,” she says.

For one, they believe the HRMS will enable them to improve the company’s safety record by giving them the ability to track near misses for the first time. And Hickey expects the information system will help them manage collective agreements. “We have grievances here galore because we can’t manage the contract,” he says.

“The largest group of grievances we have is over overtime,” says Druhan. Most of the time it’s an issue of seniority versus ability: somebody would get upset when a job was given to another employee with less seniority. A job would call for a certain level of welding expertise and training, for example. “We would tell them you can’t do that job and they’d say well prove I can’t do that job.”

In the past the management team would be at a loss since they had no documentation to prove the employee lacked the requisite training, a problem that disappears with the new system in place to track employee history.

It will take a while to realize the ROI they expect from the new system, but Hickey is confident the new technology infusion to TrentonWorks and access to information will help them improve their human resources management.

“I want to see this thing pay off, which is still down the road,” he says.

“But we’re going to know so much more about our employees and that will help us to better manage them.”

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