Wednesday, November 30, 2005

HR Technology - State of the Industry

This is a reply to Jeff from the blog, who in his post about quality vs cost, invited me to comment about waste in systems and technology.

The Seven Wastes are (defined by Taiichi Ohno, Toyota’s Chief Engineer ):

1 - The Waste of Overproduction

2 - The Waste of Waiting

3 - The Waste of Transporting

4 - The Waste of Inappropriate Processing

5 - The Waste of Unnecessary Inventory

6 - The Waste of Unnecessary Motions

7 - The Waste of Defects

As I think about this, there are so many areas of waste in HRMS and point solutions that it’s hard to decide where to start. Then I add in the HRO and outsourcing factor and it becomes even more confusing.

It’s ugly…

Unfortunately, most waste is political. In the HRMS world, HR as an administrative center does seem to be pretty low on the totem pole. Operational and lately finance systems have really had more focus (read: Funding) over many years. Add to that the fact that HR hasn’t really had a seat at the table until recently, and political power has not been on HR’s side. Add to that the fact that HR and PR are often separated into different silos (HR and Finance) and you have ever increasing political struggles that now include policy and procedure. Let me just ask: HOW HARD CAN IT BE TO GET A MANUAL PAYROLL CHECK APPROVED??? We haven’t even gotten to the systems waste yet!!!

Jeff’s insight is right on when end users get caught between buyers and the vendor. Add in another twist when the buyer is IT or purchasing departments. We have seen too many times (especially in the ERP 90’s) IT and HRIS departments building large teams of programmers just to support HR. In recent years, many organizations switched to “vanilla” software philosophies where HRIS no longer creates customizations and end users still don’t get what they need as they are forced to live with the system as delivered.

But it gets better…

I actually think that momentum has been changing in the favor of HR For a few years now. The systems are getting deeper, HR strategy is more focused and on target, and systems are focused on catering to the workforce – both user and employee level. A few years ago, you had to pick. Oracle for finance, so we might as well do Oracle for everything. Now, you can take Oracle for Finance, SAP for SCM, and find another HR system altogether – tie the whole thing up on the back end and nobody feels any pain. Then wrap your TAS, TMS, learning and portal solutions around HRMS and pump the whole thing into a data warehouse.

Before it gets worse again…

We were getting so close to a valid and achievable systems model and then we had to drop the HRO ball on everyone. The systems people just got outsourced along with the entire recruiting staff, the HRO vendor wants another $5M to finish implementing the portal, and the generalists are running amuck in confusion!!!

But I’m feeling positive… (or What's my point!!)

Listen, I don’t know if HRO is the right model for everyone, and I don’t know if it will pan out for anyone. What I do know, is that even though we keep playing with process (now in an HRO state), the systems really are a beacon of hope. A couple years ago we were customizing systems to automate our processes which were themselves modified for the systems sake. Today, we configure systems so that they conform to our strategies - not vice versa.

Waste? Sure there’s wasted energy. But I tell you what… I’d rather be in HR technology today than even just 2 years ago. And what else? 2007 and 2008 are going to be a couple years to watch out for.