Firms urged to continue HR technology spending

Companies should continue spending on human resource technology to increase productivity while cutting costs and without sacrificing the quality of service to customers despite the global economic crunch, a global surveyed said. Of 1,800 executives surveyed, 60 percent said they were cautiously continuing plans and budgets for HR technologies, CedarCrestone’s 2009-2010 HR Systems Survey-12th Annual Edition said. CedarCrestone provides information technology (IT)-related consultancy and management services to enhance the use of Oracle applications. Tim Darton, Oracle Corp. general manager for human capital management solutions of the firm’s Asia-Pacific division, said the increasing acceptance of HR technology points to efficiency and cost savings in HR operations. “We are talking about a system to manage what is probably the most expensive, the most unpredictable and the only asset that a company has that can walk out the door," Darton said in an e-mail. HR technology primarily involves the “marriage" of HR management and IT. Such automated information processing promotes the use of an employee self-service module that enables employees to access personal information, attendance, skills data, payroll, and performance record, among others, through an office’s Intranet or via the Internet. The use of HR technology allows firms to implement management competency, to determine the right people to retain, and expand HR capabilities, according to the CedarCrestone survey. “Productivity and cost reductions, balanced with the recognition that getting the right employees and retaining the right employees with the right skills and competencies, is the foundation that guides organizations’ activity with HR technologies," it said. Darton noted that HR technology has two types of benefits: direct and indirect. Data and system consolidation has a direct benefit to businesses as this helps reduce maintenance and support costs, while enabling them to streamline process. “These seemingly simple benefits can lead to some serious cost savings, achievable through consolidation, simplification of global process, shared services, and the use of a standard product within the company," he noted. While the technology’s indirect value is often ignored, it is important to recognize its huge impact on the company. Studies have shown that businesses that do not adopt HR technology hold on to more than half of their employees who are looking for another job or are willing to take better offers, according to Darton. “Keeping the work force engaged is all about having employees that feel they are valued properly; are contributing to the success of the company, and they understand how their contribution is valued and paid for," he said. Results of the CedarCrestone survey showed that 79 percent and 47 percent of the respondents spent their time and budget this year on business process improvements and innovations, respectively. Companies with high-tech manufacturing operations have increased HR technology adoption by 95 percent from 2008, the CedarCrestone survey said. It also noted that industrial firms were the first to adopt new technologies and approaches. The financial industry also boosted its technology implementation by 60 percent, while the professional services sector increased their HR technology use in work force management by 52 percent. The same is true for industries in the Philippines. According to Darton, different organizations in the Philippines have been adopting the technology to efficiently deliver HR services, to provide updated employee population demographics, to reposition the existing work force in time of organization changes, and to assess how much employees are contributing to the company’s success, among others. “Typically, they are focusing on a long-term goal of refining their service delivery model along the lines of the HR shared service center," he noted. These centers share information across the organization and are established in countries where wages are cheaper. It aims to reorganize the HR department into a business-driven function from a routine one. It can eventually be turned over to a business process outsourcing firm. The Ayala group, for one, has been benefiting from HR technology through its BPO firm HRMall, Inc., which has been catering to four companies under its wing: Globe Telecom, Inc., Bank of the Philippine Islands, Manila Water Co., Inc., and Ayala Land, Inc. “Technology must lead the way in enabling us to be prepared. Organizations that can make decisions based on accurate and readily available data will be able to make the right decisions, [while] those that have to rely on guesswork will need to rely on luck to survive," Darton said. — Ma. Aizl Camille B. Cabarles, BusinessWorld