B2E Portal Maturity: An Employee Self-Service Case Study

Paul Hawking [HREF1], School of Information Systems,Faculty of Business, Victoria University[HREF2] , PO Box 14428, MC8001, Melbourne, Australia [HREF3], Victoria, 3800. Paul.hawking@vu.edu.au

Andrew Stein [HREF1], School of Information Systems,Faculty of Business, Victoria University[HREF2] , PO Box 14428, MC8001, Melbourne, Australia [HREF3], Victoria, 3800. Andrew.Stein@vu.edu.au

Abstract

The Australian ERP industry has matched global trends in ERP usage and in 2001/2002 SAP has made moves to introduce a "second and third wave" of functionality in ERP systems. Research up to date has been limited especially in the relation to market penetration and effectiveness of these new "second wave" products in the Australian region. Companies around the world are exploring various Internet business models, mostly B2B & B2C, to evaluate their potential and business implications. A number of Australian companies have realised the relative quick gains with low associated risks that can be achieved through the business to employee (B2E) model. Employee Self Service (ESS) is a solution based on the B2E model that enables employee's access to the corporate human resource information system. This paper looks at the development of the human resources (HR) portal and presents the findings of a case study of a leading Australian telecommunications company that has implemented a "second wave" ESS portal. A model depicting portal maturity is presented and analysis shows that the ESS portal can be categorised as first generation with an "Access Rich" focus. Planned developments for moving the portal to second generation with a collaboration focus are proceeding.

Introduction

The global market for ERP software is estimated to have had US$300 billion spent over the last decade (Carlino, 2000). The global ERP industry, including the market leader SAP, blossomed in the 1990's automating back office operations has made moves to introduce a "second and third wave" of functionality in ERP systems. These products were basically enhancements to the ERP software and included Business Information Warehouse (BW), Knowledge Warehouse (KW), Strategic Enterprise Management (SEM), Customer Relationship Management (CRM), Employee Self-Service (ESS) and Advanced Planner and Optimisation (APO). In Table 1 see SAP's Asia-Pacific implementations of some of the second wave products presented with user segment and key market.

The change in demand for the second wave products is shown in the purchase patterns for 2001 & 2002 (Bennett, 2002). In Australasia in 2001, supply chain management (SCM) accounted for 15% and CRM for 20% of SAP sales revenue. In 2002 SCM was 22%, CRM 21%, Portals 11% and Supplier Relationship Management (SRM) exchanges 11%. There are several reasons for this diversification of ERP systems: integration of business processes, need for a common platform, better data visibility, lower operating costs, increased customer responsiveness and improved strategic decision making (Iggulden, 1999). This slowing in demand for core ERP systems has resulted in added functionality installed, like Employee Self Service (ESS), to prepare organisations for e-Business. Many of Australia's larger companies and public sector organisations are implementing ESS functionality as an adjunct to their enterprise resource planning (ERP) systems. These types of systems are enterprise wide and are adopted by companies in an attempt to integrate many of their human resource business process and provide better data visibility. They claim to incorporate "best business practice" and it is understandable the growth in companies implementing ESS solutions has been significant (Webster Buchanan 2002). The return on investment of ESS applications has been substantial (Lehman, 2000) with ESS transforming labour intensive paper based HR forms to digital enabled forms allowing a 50% reduction of transaction costs, 40% reduction in administrative staffing, 80% reduction in management HR duties and a 10 fold speed-up of HR processes (Workforce, 2001). Approximately 320 of Australia's top companies have implemented SAP's ERP system (SAP R/3) and of these approximately 150 have implemented the HR module with 33 implementing the ESS component. These companies include Toyota, Westpac, RMIT, National Australia Bank, Siemens, Telstra, and Linfox. In recent times there has been a plethora of research associated with the impact and implications of e-commerce. Much of this research has focused on the various business models such as business-to-business and business-to-consumer with the importance of developing customer and partner relationships being espoused. There has been little attention paid to the potential of business to employee (B2E) and the role that B2E systems can play in improving business to employee relationships. A number of companies have realised the relative quick gains with low associated risks that can be achieved through the business to employee (B2E) model. Employee Self Service (ESS) is a solution based on this model that enables employee's access to the corporate human resource information system and Australian companies are increasingly implementing this solution. This paper looks at a case study of a major Australian organisation that has implemented an ESS portal and presents an analysis based on a proposed portal maturity model based on work by Eckerson (1998) and Brosche (2002).

From HRM to HRMIS to eHR

The function of Human Resource Management has changed dramatically over time. It has evolved from an administrative function primarily responsible for payroll to a strategic role that can add value to an organisation. Companies have now realised the importance of this function and are investing resources into supporting Human Resource Information Systems (HRMIS). The evolution of HR to eHR has been accelerated by the convergence of several organisational forces. The internal process of HR is changing its role from support to a more strategic place in the organisation. The role has developed from being primarily administrative, to support then to the role of a business partner. At the same time HR is a stable, reliable business process that has high recognition within the organisation and touches every employee. This high recognition gives HR a rapid acceptance when being given the "e" treatment. Another important force acting on HR is the "adding value" imperative. Organisations are involved in a "war on talent" (Link, 2001) and organisations see eHR as an important technological tool in winning the war. HR has seized this change in organisational focus and adopted the B2E model to further enhance the business partner role. Internet technology continues to shape the way that HR information is being delivered to employees. There are three main delivery platforms - Customer Service Representative (CSR), Interactive Voice Response (IVR) and Web applications - however the frequency of use is changing. Customer service usage (CSR) and interactive voice response (IVR) gain 20-30% of employee access with Web applications gaining 50% of employee access (Anonymous, 2001). The customer service representative is still the dominant access method for complex transaction. Web access is replacing IVR as preferred self-service method in large organizations. Many of the world's leading companies are using ERP systems to support their HR information needs. This is partly due to the realisation of the integrative role HR has in numerous business processes such as work scheduling, travel management, production planning and occupational health and safety (Curran and Kellar 1998). The B2E model involves the provision of databases, knowledge management tools and employee related processes online to enable greater accessibility for employees (Deimler and Hansen 2001). They believe that there are large savings to make from implementing B2E solutions. Killen and Associates (2000) believe that these solutions can provide as much as a 4% gross margin improvement

Business To Employee (B2E)

With advances in network and browser technology companies have been moving more and more of their corporate information resources to web based applications making them available to employees via the company intranet. Originally these applications only allowed employees to view and browse electronic versions of existing documents. Companies found that there was a saving in publication costs and an empowerment of employees through the increased availability of corporate procedures and knowledge to enable them to perform their day-to-day tasks. The increased familiarisation of employees in the use of browser technology and the maturing of this technology within companies has resulted in these applications evolving to incorporate transactional interactions. This has a number of benefits including the move towards paperless transactions and the implied reduction in administrative overheads and the provision of better level of service to employees. Hamerman (2002) sets the Employee Relationship Management (ERM) landscape with corporate, personal and employee elements set out in a diagram (See Figure 1.). Hamerman (2002) sees ERM suites as being platforms for information delivery, process execution and collaboration in the organisation. The advantages in empowering employees through an ERM suite include: multiple value propositions, consistent portal GUIs, all employee 24x7, real-time dynamic information delivery and a comprehensive collaborative work environment. Employees can now access a range of information pertinent to themselves without having to rely on others. They can compare pay slips for a number of given periods. They can view their superannuation and leave entitlements and then apply for leave online. Human resources (HR) for many companies are evolving from the traditional payroll processing function to a more strategic direction of human capital management (Malis, 1998).

Figure 1

As HR has evolved the level of associated administrative duties has increased proportionally with some research estimating that as much as 70% of HR personnel time is spent on administrative duties (Barron, 2002). This has been estimated to represent a cost of up to $US1700 per employee per year (Khirallah, 2000). It has been estimated (Wagner, 2002) that HR paper forms cost $20-$30 to process, telephone based HR forms cost $2-$4 to process but Internet based HR forms cost only 5-10 cents. In an attempt to exploit these cost differences companies have looked to the Internet for the solution.

B2E: Employee Self Service

B2E Employee Self Service (ESS) is an Internet based solution that provides employees with a browser interface to relevant HR data and transactions. This enables employee's real time access to their data without leaving their desktop. They can update their personal details, apply for leave, view their pay details and associated benefits, view internal job vacancies and book training and travel. The benefits of this type of technology have been well documented (Webster Buchanan, 2002, McKenna 2002, Alexander 2002, Wiscombe, 2001). They include reduced administrative overheads and the freeing of HR staff for more strategic activities, improved data integrity, and empowerment of employees. One report identified a major benefit as the provision of HR services to employees in a geographically decentralised company (NetKey, 2002). Tangible measures include reductions in administrative staff by 40% and a reduction in transaction costs of 50% (Wiscombe, 2001) and the reduction of processes from two to three days to a few hours (NetKey, 2002). A recent study of UK top 500 firms revealed that the majority of B2E solutions were still at a basic level and have focussed on improved efficiency and electronic document delivery (Dunford 2002). Ordonez (2002) maintains the theme of information delivery in presenting ESS as allowing employees access to the right information at the right time to carry out and process transactions, further ESS allows the ability to create, view and maintain data through multiple access technologies. Companies such as Toyota Australia are now extending this functionality beyond the desktop by providing access to electronic HR Kiosks in common meeting areas.

ESS: State Of Play

The Cedar group (Cedar Group, 2002; Cedar Group, 2001; Cedar Group, 2000; Cedar Group, 1999), carry out an annual survey of major global organisations and their B2E intentions. The survey covers many facets of ESS including technology, vendors, drivers, costs and benefits. The average expenditure in 2001 on an ESS implementation was $US1.505 million. This cost is broken down into software 22%, hardware 18%, internal implementation costs 18%, external implementation costs 17%, marketing 10% and ASPs 17%. Looking at this cost from an employee perspective sees the average cost of ESS implementation ranging from $US32/employee for a large organisation (>60,000 employees) to $US155/employee for a medium size organisation (7,500 employees). The funding for the HR ESS comes from the HR function in North American and Australian organisations whereas the Head Office funds them in European organisations. The main drivers for ESS are improved service (98%), better information access (90%), reduced costs (85%), streamline processes (70%) and strategic HR (80%). Employees can use a variety of applications in the ESS and the main ones identified in the Cedar survey are, employee communications (95%), pension services (72%), training (40%), leave requests (25%) with many others. Managers use self-service differently in the three regions of the survey. North American managers use MSS to process travel and expenses (42%), European managers to process purchase orders (48%) and Australian managers to process leave requests (45%). Employee services can be delivered by a variety of methods and the web-based self-service (B2E) is undergoing substantial planned growth from 42% in 2001 to 80% planned in 2004. The trend is for implementing HRMIS applications from major vendors like SAP or PeopleSoft. ESS implementations show overwhelming success measures with 53% indicating their implementation was successful and 43% somewhat successful. The value proposition for ESS includes average cost of transaction (down 60%), inquiries (down 10%), cycle time (reduced 60%), headcount (70% reduction), R.O.I. (100% in 22 months) and employee satisfaction (increased 50%). The culmination of the Cedar group reports lists the barriers to benefit attainment and critical success factors in ESS applications. North America and Australian organisation both list cost of ownership/lack of budget as the main barriers whilst European organisations perceive lack of privacy and security as the main barriers. Other barriers include; lack of technical skills, unable to state business case, low HR priority and HRMS not in place. As with other complex IT application projects, executive commitment, internal collaboration and availability of technical skills to implement the application are all considered important success factors.

Web Portals

The term "Portal" has been an Internet buzzword that has promised great benefits to organisations. Dias (2001) predicted that the corporate portal would become the most important information delivery project of the next decade. The term portal takes a different meaning depending on the viewpoint of the participant in the portal. To the business user the portal is all about information access and navigation, to a business the portal is all about adding value, to the marketplace the portal is all about new business models and to the technologist a portal is all about integration. The portal was developed to address problems with the large-scale development of corporate intranets. Corporate intranets promised much but had to address multiple problems in the organisation (Collins as reported in Brosche, 2001: pp14). On the user side employees must make informed and consistent decisions and are being implored to access multiple information sources on the Web. On the technology side Intranet sites in organisation have proliferated resulting in an increase in search complexity for corporate users. Early versions of portals were merely web pages with extensive document linkages, a gateway to the Web. These early versions have been replaced by several generations of portals.

Table 2

Eckerson (1998) proposed four generations of portals (see Table 2) and he proposed that portals can be analysed by the information content, information flow and the technology focus that make up the portal. Just as the Intranet proliferated within organisations portals are now starting to multiply. A new generation is being developed that hopes to address to unfettered expansion of portals. The portal management system or the mega portal is being developed to take control of portal proliferation with the aim to enhance business process convergence and integration. Shilakes and Tylman (1998) coined the term "Enterprise Information Portal" (EIP) and this definition encompassed information access, application nature and Internet gateway that are apparent in the second and third generations of organisational portals. One area that is being developed via portal technology is employee relationships. We have already looked at ESS as an example of a B2E system; some additional employee applications are M2E (Manager to Employee), E2E (Employee to Employee) and X2E (eXternal to Employee). Taken together all these relationships are considered part of the ERM strategy (Doerzaph, 2002). An ERM strategy is made up of the following components; self-service technology, collaboration tools, communication tools, knowledge management techniques, personalisation focus and lastly access technology. The access technology can encompass employee interaction centres like hotlines or helpdesks or enterprise portals. General Motors are one of the leading HR portals implemented in the world and they have proposed three generations of HR portal (Dessert & Colby, 2002). The three phases are presented in Table 3 and are presented in five organisational dimensions. A model of portal architecture is proposed by Brosche (2002:19) and depicts a portal having core, key elements and specialisation components. The components proposed by Brosche (2002) can be further categorised as having an information focus, technology focus or a process focus.

Table 3

We can further combine Eckerson generations with Brosche portal model and analyse an organisation's portal by its information focus, technology focus and process focus and categorise it as being first, second or third generation. (See Figure 2)

Figure 2

It would be beneficial to introduce more defined categories and greater detail as in Dessert & Colby (like information attributes, flow and storage) for the description but that is the subject for other papers. Using this proposed categorisation of portals we will analyse the ESS portal of a major Australian organisation and locate the stage of portal development they are currently in.

Research Methodology

The move to B2E ESS portals is detailed through the use of a case study. Case study research methodology was used as the chapter presents an exploratory look at implications of ESS implementations. Yin (1994, p. 35) emphasises the importance of asking "what" when analysing information systems. Yin goes further and emphasises the need to study contemporary phenomena within real life contexts. The etic or outsider approach was used in this case study. This approach emphasises an analysis based upon an outsider's categorisation of the meanings and reading of the reality inside the firm. The analysis is based upon objective methods such as document analysis, surveys and interviews. Assumptions that were gleaned in the analysis of maturity of portal development were queried and clarified by interview. Walsham (2000, p.204) supports case study methodology and sees the need for a move away from traditional information systems research methods such as surveys toward more interpretative case studies, ethnographies and action research projects. Several works have used case studies (Chan & Roseman, 2001; Lee, 1989; Benbasat et al., 1987) in presenting information systems research. Cavaye (1995) used case study research to analyse inter-organisational systems and the complexity of information systems. A single company was chosen for case study research in attempt to identify the impact of an ESS implementation and the associated development along the ESS to Portal path. The company chosen attended a forum on ESS conducted by the SAP Australian User Group (SAUG). The case study company was chosen because it is a leading Australian organisation with a long mature SAP history and had implemented SAP ESS module. Initially, information was collected as a result of the company's presentation at the ESS forum in June 2002. Interviews were conducted firstly by email with two managers from Auscom, one manager was from Corporate Systems and the other from Infrastructure Services. These predetermined questions were then analysed and enhanced and formed the basis of the interviews supported by observations through access to the ESS system. Interviews were transcribed and follow up queries and clarification of points were conducted by telephone. Project documentation and policy documents were also supplied. The initial case study was commenced in October 2002 by Engleby, Nur and Romsdal (2002) and then refined and extended in December by the authors of this paper. The name of the case study organisation has been withheld due to conditions set in the case study interview.

CASE STUDY

Australian Communications Organisation (Auscom)

Auscom is Australia's leading telecommunications company. It was privatised in 1997 and currently has 40,000 full time employees, 20,000 contractors, 2,000 information systems and 50,000 desktops (Greenblat, 2002). It offers a full range of communications and information services products, including, local, long distance, mobile, Internet and subscriber television. In the year ending June 2002 it had $AUD 20 billion of sales and a profit of $AUD 3 billion. Auscom's vision is to be a world-class, full service telecommunications by delivering company wide process improvement, productivity gains and cost efficiency (Auscomvision, 2002). It could be viewed in the same strategic light as say a leading European telecom, Deutsche Telecom AG. One of the areas that Auscom had analysed and felt was able to better deliver their vision was HR. The existing HR system was cost bloated, process fragmented and had poor data access. Auscom wanted to explore the strategic aspects of HR specially the concept of "employer of choice" and instigated "People Online" in May 2001. The project was to be developed in three phases, Phase 1 introduced ESS to provide simple HR employee based transactions and information search facilities. Phase 1 had two components, MyDetails, the simple employee HR ESS and PeopleSearch, the information search component. Phase 2 would introduce workflow for both HR and non-HR processes. Phase 3 would provide additional features, but is really "over the horizon" at this stage. Phase 1 was rolled out in May 2002; phase 2 was scheduled to be rolled out in November 2002 with Deloitte consulting the development partner. The business case for phase 1 identified four groups of benefits; quantifiable cost savings, increased data integrity, enabling process re-engineering and e-Enabling the workforce. Details of the benefit metrics were not available due to commercial in confidence. Four months after the implementation an external organisation carried out a review and analysed the business requirements, performance, implementation and project management of PeopleOnline. An analysis of the review is presented with reference to the portal generations in Figure 2.

Information Focus

Information stickiness refers to the ability of the ESS to draw and retain the user. The Mydetails application did provide enhanced stickiness but PeopleSearch did not. The review team found that the needs of super/power users in switchboard/reception, who use PeopleSearch extensively, had not been analysed enough in the initial business requirements analysis. There was also a problem when cost considerations created a scope and software change and project requirements of the special power users was not re-visited after this change. There was also an operational problem where service level agreements did not have adequate time/penalty clauses and or metrics built in thereby causing performance problems to be neglected. Overall, the Mydetails component did enhance stickiness as it provided the full range of typical "PULL" ESS features; personal details, pay, leave, bank and benefit packages. This type of ESS site is typically a first generation "ACCESS RICH" site with predominately "pull" features (Static Web, High Usage). The information provided to the user was limited to HR or employee based information. There was no process information, business transaction information or product information provided. There was no across function information flows. The access focus of the portal would indicate that the portal was immature and still first generation.

Process Focus

This dimension looks at the extent that the portal reaches out to other areas of the organisation and the extent that the portal enables collaboration and cross-integration business process operations, like e-procurement, travel expenses authorisation, payroll, time and HR data management. The services provided by the Phase 1 project was limited to HR type data including payroll. The extension into other areas of the organisation and across business units is scheduled for Phase2. The Peopleseach component enhanced communications by providing one stop search facility in the whole organisation. It was important that this communication tool should have been aligned to the corporate intranet look and feel. There was little collaboration built into this phase. Again this type of portal with moderate communications but limited collaboration features is a first generation "ACCESS RICH" HR portal.

Technology Focus

The IT model of the HR infrastructure was based around SAP R/3 with ESS added functionality for self-service and SAP's WhosWhos application for search capability. Half way through the business requirements analysis Auscom dropped WhosWhos and replaced it with an in-house search package. The risk of upgrading the Internet browser from IE4 to IE5 created major problems to the extent that the system was written to IE4 compatibility. There was no content management, publishing capability, workgroup, collaboration or email access. Again looking at the Figure 2 the technology dimension is clearly first generation "ACCESS RICH" portal.

Discussion

"MSS and ESS are the "killer applications" of the HR world. They represent a pivotal point in the technology of HRMS" (Johnston, 2001) ESS has proven to provide a number of quick wins in the business to employee e-business model. It provides a number of benefits to companies and streamlines many of the HR processes while at the same time empowering employees. A recent Tower Perrin report (2002) showed that ESS portals have been or are being adopted by 73% of organisations and that eHR has taken hold in organisations. David White from Deloitte Touché (2002:7) confirmed the acceptance of eHR portals into the lexicon of e-enablement, "A Successful technology-enabled HR strategy combines business strategy with emerging technologies and existing infrastructure to produce an integrated, comprehensive plan for how HR will deliver services, provide information, and process transaction." Compared to other e-business solutions it has a relatively low impact on the organisation, employees and processes. The risks are minimal as it provides a web interface to an existing system and improves data-integrity, as employees are responsible for much of their own data. However as with most IT projects ESS portals do promise to provide extended functionality into and across the organisation. Many companies such as GM USA (Dessert & Colby, 2002) are now evolving their ESS solutions into employee portals where the HR functionality is just another tab that appears on their web page with their business transactions, corporate data, calendar and email functionality. ESS should eventually disappear as a term as web interfaces become standard in corporate portals where the employee has one interface to carry out all business related transactions. We can analyse the relative positions of Auscom and GM portal maturity by referring to Table 4. Auscom developed their first generation portal to be primarily an information pull application with the main focus on traditional HR forms. Little collaboration or communication applications were developed in the first release and as such this place the Auscom portal firmly in the "Access Rich" type. The next version of the portal was looking at the online routing of standard HR transactions, online recruitment, talent management and an enhanced emphasis on training. This development would move the Auscom portal into the "Content Rich" and partially into the "Application rich" phases. The GM portal, as shown in Table 3, has moved beyond this "Access Rich" phase into the content and application phase. Auscom seem to be moving in the right direction if somewhat behind GM. There seems no doubt that the technology exists to move an organisation like Auscom from first generation "ACCESS RICH" to second generation "CONTENT RICH" and onto third generation "APPLICATION RICH" portal.

Table 4

CONCLUSION

There are many terms used to describe the move from traditional HR to the "e-enabled" versions of HR; HRMIS, eHR, B2E, ESS, web enabled ESS, HR portal, ESS portal and several others. What is not vague is the understanding that these are information delivery platforms that have much potential to deliver not only cost focussed savings but the more important strategic HR benefits being sought by modern organisations. The recent Cedar report (2002:1) commented: "HR self-service and portal technologies are maturing as strategic, comprehensive solutions that support building high performance workforces, while sponsored and supported by HR, these technologies are increasingly part of enterprise to employee solutions." When a major Australian organisation leads the way with modern e-enabled applications the stage is set for other Australian organisations to be aggressive followers. We will watch with great interest the march to ESS and then the advancement to HR/Corporate/Enterprise Portals.

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Copyright

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