Published April 2012
By: George John V, Founder & Managing Director, Kallos Solutions Private Limited & www.KServeHRMS.com
Synopsis
HR automation can range from simple spreadsheet based solutions to complex enterprise wide solutions that automate every single process of the HR function. The automation can also extend to employees and even sourcing partners using self service portals. This paper looks at the various levels of sophistication that organizations have typically automated within this wide spectrum, and articulates the benefits that occur when the organizations take leaps through these various levels of sophistication. Organizations can leverage this paper to identify their current level of automation and determine if the benefits associated with a level of sophistication warrants the investment return for the chosen investment leap.
A guide to decisions in automating HR functions
1.0 Levels of sophistication
The need for the automation of HR and payroll usually increases when complexity and quantity of HR processes increase. The typical drivers for these are when
a) The number of employees go up
b) The geographical spread of employees across locations and countries go up
c) The number of statutory compliances related to employees go up
d) The cost per employee is higher based on industry or geography of operation
e) The availability of people with the right skills and profile to match the various positions is difficult to find.
As each of these factors drives up the complexity of HR processes within the organization, the need and the demand for Automation goes up. The result is a wide variety in the levels of sophistication as depicted in the diagram below.
As the diagram above indicates, the sophistication level depends on the level of automation and the coverage of the automation. Automation levels can start from simple spreadsheets and go on to highly integrated online applications that automate every process and activity.
In practice, however it is seen that organizations make the leaps in automation in steps. This is primarily because each leap requires careful planning for change management as well as investment in suitable IT systems that can be the foundation for the leap. The path to sophistication may be different for almost every organization, and this paper discusses some leaps that organizations most commonly take in their quest for better HR Automation solutions.
While there may be many routes, this paper depicts a specific 3 step route which in our experience has been the common route to complete automation
Leap 1: From spreadsheets to isolated applications
When volumes are low, spreadsheets are the most common form of managing. They are easy to edit, view and manipulate. However as the volume goes up the same flexibility proves to be its undoing. Errors creep in as multiple copies of the spreadsheet proliferate. Updates of existing and new employees are not made uniformly in each version, leading to different versions of the truth. The crunch time is usually at the end of every period when numerous updates and reports are required at the same time, and if updates are not done accurately, the results are wrong. The need for applications becomes critical, especially in areas where processing is required – typically payroll and leave management.
There are numerous areas where HR applications will do a better job than spreadsheets and these are in the areas of
Employee Database
Employee Life Cycle Tracking
Leave, Time and Attendance
Payroll & Benefits
Performance Appraisals
HR Administration and Reimbursements
Recruitment
Training
Time Sheet and Resource Management
Income Tax and Tax Planning
The choice of automation will depend on the priority for the business. Typically organizations in countries that have a high level of statutory complexity will automate payroll and benefits. Similarly organizations that employ highly skilled and expensive resources will give high importance to areas like Performance Appraisals and Resource Management, and organizations which have a high volume of new employees and separations would consider Recruitment important.
Choosing isolated applications are relatively easy since the functional breadth is small, and a quick evaluation of available products in the space will enable easy choices for implementation. Isolated applications can also be developed custom in case your processes are unique and products are not available for your flavor of business processes in the respective area.
Leap 2: From isolated applications to integrated applications in the core areas
Isolated applications as the name implies, lack integration. This means that while individual systems work well, a considerable amount of effort is needed to ensure data consistency between the systems. The core operational systems like leave, payroll, and employee database have a number of inter-relationships and require a high level of accuracy and timeliness.
In practice, reconciliation of the above is always done in a hurry, primarily because there is very little time between when the information comes in and the time when payroll and balances are processed. A lot of compromises occur, and these can be potentially dangerous for the organization. While it may be possible to have isolated applications for each of the core areas, a number of inefficiencies creep in if not integrated. The net result is that in every period a lot of time and effort is spent in reconciling the various systems before finalizing any useful output from the system.
Integration of these applications usually becomes a necessity typically when the number of employees crosses the hundred mark. While it is difficult to leap directly to completely automated applications for end to end HR functions, it is essential that at least the core operational applications are integrated. This is because the core applications of employee database, employee life cycle, leave management and payroll form the backbone of the HR function. The primary benefits of integrated will be in terms of saving the time of HR & Payroll Administration, and accuracy in internal and statutory reporting. Productivity levels will also be much higher. Once the operational accuracy, timeliness and productivity are obtained, the organization can scale out to far larger sizes, with far lower proportional increases in effort.
Integrated applications are however complex to build and maintain and hence they are usually purchased from established vendors. The complexity arises from the fact that the number of processes being automated is very high. Statutory reporting needs to be complete and most importantly architecture of the application needs to be designed with flexibility so that changing organization structures, rules, and statutory laws and formats can be handled by the same application. The application should also be scalable as the organization grows larger over a period of time. Proven HR products like KServeHRMS™ specialize in all the above areas and hence it is better to leverage such products to handle this automation.
The decision also has to keep in mind that at some point the third leap will have to be made, and hence the choice of the product should be one that has the capability to execute the next leap also. If that is not made, it will lead to a reimplementation and re-purchase of another product to achieve that lead later on.
Leap 3: From integrated core areas to End to End automation/ Employee Self Service
Once the organization has automated its core HR transaction systems, the time is ripe to cover all areas of automation, and also expose this to employees for self service. It is not mandatory to automate all the applications before one goes for self service. It is vital, however, to ensure that the back office part of the application is functioning accurately before they are exposed to employees.
One could automate Payroll and make the pay slips available to employees, or automate leave alone and make it self-service ready. In all these cases it is essential to ensure that the back office component of the respective areas has been reconciled with accurate data and the transactions that update the system on a regular basis are accurate leading to useful services to employees live and online.
The investment decision to make the next leap is better done in one step, though this could also be phased out. The following are the reasons why the investment decision should be taken together
End to end solutions are usually provided by external vendors and hence it is vital to know if the vendor you choose can provide an end to end solution for your HR function rather than a part solution
Part automation of a peripheral area like training will lead to duplication of effort later since integration with the same employee database or other information will have to take place
The architecture of the whole solution should be determined from the deployment perspective, as well as from the technology perspective. Proliferation of solutions may lead to fatal flaws in the whole solution that may need to be reworked later.
A large part of an Enterprise HR product involves use of common utilities like approval routing workflow, mail or SMS alerts, performance indicator tracking, role specific alerts, dashboards and portals. Localized applications in one area will lead to lack of integrity
Newer environments for usage are coming up. Cloud (Private and Public), mobiles, tablets and other newer forms can provide tremendous benefits for HR managers and employees to improve their productivity. Applications from vendors that can effectively leverage these changes should be taken once for all HR functions rather than be taken numerous times separately.
Once the decision is taken, there has to be recognition that the implementation of the solution is a major one, which may be phased out and is to be executed in a professional manner. This means that internal and external positions of responsibility need created to implement the project over a period of time. Vendor selection, Change management, Extension development and IT infrastructure related decisions become vital for success.
Benefits of End to End Self Service Solutions
End to end solutions, especially ones with Self Service and live alerting via Email or SMS can provide major transformations in organizations. Approval routing workflows drive transactions through various stages of the workflow increasing the speed and reducing the effort in executing and completing processes. Leave requests, claims, infrastructure support, income tax workings and numerous other processes that are typically cumbersome to request, approve, process, monitor and account for are handled far more easily and automatically.
A typical HR interaction between an employee and the HR function (e.g. to determine leave balances) or to calculate tax deductions involve a lot of time if done manually. One could expect between two to four physical visits by the employee to complete the task, often taking weeks before the employee is satisfied. Compare that with a click of a button response. More important than the time saved is the satisfaction the employee gets through the process. He/ she now does not have to request, or sometimes plead, or even cajole to get responses now.
Typical benefits achieved from self service applications are
Increase in productivity of HR and payroll executives.
Time saved by employees while interacting with the HR and Payroll function
Perform actions at the convenience of the requestor or approval, and is available 24 x 7
Perform actions from remote offices, while traveling or even customer locations
Employee satisfaction and motivation due to speed and accuracy of response
Automatic processing of reports and statutory filings leading to accuracy and on time submissions
The difference between successful implementation of a HR initiative is the ease at which it can be executed. The success HR policies like frequent performance appraisals to ensure that the organization stays performance driven and goal oriented depends a lot on the ease of adoption and execution, and self service makes the difference between success and failure
Scale up size of organization, and HR services without equivalent additions in HR staff.
Each of the above points could be converted into tangible monetary returns for the organization which would normally justify the investment for the End to End applications.
For any additional information and advice on the above topic, one could visit www.KServeHRMS.com and make a query, which will be responded to as soon as possible.
You can also call or Mail to manish.kumar@kallossystems.com/+91 9379994111 for any advice for the best HR Practice in your company.
To meet our Representative at your city feel free to contact us.
By: George John V, Founder & Managing Director, Kallos Solutions Private Limited & www.KServeHRMS.com
Synopsis
HR automation can range from simple spreadsheet based solutions to complex enterprise wide solutions that automate every single process of the HR function. The automation can also extend to employees and even sourcing partners using self service portals. This paper looks at the various levels of sophistication that organizations have typically automated within this wide spectrum, and articulates the benefits that occur when the organizations take leaps through these various levels of sophistication. Organizations can leverage this paper to identify their current level of automation and determine if the benefits associated with a level of sophistication warrants the investment return for the chosen investment leap.
A guide to decisions in automating HR functions
1.0 Levels of sophistication
The need for the automation of HR and payroll usually increases when complexity and quantity of HR processes increase. The typical drivers for these are when
a) The number of employees go up
b) The geographical spread of employees across locations and countries go up
c) The number of statutory compliances related to employees go up
d) The cost per employee is higher based on industry or geography of operation
e) The availability of people with the right skills and profile to match the various positions is difficult to find.
As each of these factors drives up the complexity of HR processes within the organization, the need and the demand for Automation goes up. The result is a wide variety in the levels of sophistication as depicted in the diagram below.
As the diagram above indicates, the sophistication level depends on the level of automation and the coverage of the automation. Automation levels can start from simple spreadsheets and go on to highly integrated online applications that automate every process and activity.
In practice, however it is seen that organizations make the leaps in automation in steps. This is primarily because each leap requires careful planning for change management as well as investment in suitable IT systems that can be the foundation for the leap. The path to sophistication may be different for almost every organization, and this paper discusses some leaps that organizations most commonly take in their quest for better HR Automation solutions.
While there may be many routes, this paper depicts a specific 3 step route which in our experience has been the common route to complete automation
Leap 1: From spreadsheets to isolated applications
When volumes are low, spreadsheets are the most common form of managing. They are easy to edit, view and manipulate. However as the volume goes up the same flexibility proves to be its undoing. Errors creep in as multiple copies of the spreadsheet proliferate. Updates of existing and new employees are not made uniformly in each version, leading to different versions of the truth. The crunch time is usually at the end of every period when numerous updates and reports are required at the same time, and if updates are not done accurately, the results are wrong. The need for applications becomes critical, especially in areas where processing is required – typically payroll and leave management.
There are numerous areas where HR applications will do a better job than spreadsheets and these are in the areas of
Employee Database
Employee Life Cycle Tracking
Leave, Time and Attendance
Payroll & Benefits
Performance Appraisals
HR Administration and Reimbursements
Recruitment
Training
Time Sheet and Resource Management
Income Tax and Tax Planning
The choice of automation will depend on the priority for the business. Typically organizations in countries that have a high level of statutory complexity will automate payroll and benefits. Similarly organizations that employ highly skilled and expensive resources will give high importance to areas like Performance Appraisals and Resource Management, and organizations which have a high volume of new employees and separations would consider Recruitment important.
Choosing isolated applications are relatively easy since the functional breadth is small, and a quick evaluation of available products in the space will enable easy choices for implementation. Isolated applications can also be developed custom in case your processes are unique and products are not available for your flavor of business processes in the respective area.
Leap 2: From isolated applications to integrated applications in the core areas
Isolated applications as the name implies, lack integration. This means that while individual systems work well, a considerable amount of effort is needed to ensure data consistency between the systems. The core operational systems like leave, payroll, and employee database have a number of inter-relationships and require a high level of accuracy and timeliness.
In practice, reconciliation of the above is always done in a hurry, primarily because there is very little time between when the information comes in and the time when payroll and balances are processed. A lot of compromises occur, and these can be potentially dangerous for the organization. While it may be possible to have isolated applications for each of the core areas, a number of inefficiencies creep in if not integrated. The net result is that in every period a lot of time and effort is spent in reconciling the various systems before finalizing any useful output from the system.
Integration of these applications usually becomes a necessity typically when the number of employees crosses the hundred mark. While it is difficult to leap directly to completely automated applications for end to end HR functions, it is essential that at least the core operational applications are integrated. This is because the core applications of employee database, employee life cycle, leave management and payroll form the backbone of the HR function. The primary benefits of integrated will be in terms of saving the time of HR & Payroll Administration, and accuracy in internal and statutory reporting. Productivity levels will also be much higher. Once the operational accuracy, timeliness and productivity are obtained, the organization can scale out to far larger sizes, with far lower proportional increases in effort.
Integrated applications are however complex to build and maintain and hence they are usually purchased from established vendors. The complexity arises from the fact that the number of processes being automated is very high. Statutory reporting needs to be complete and most importantly architecture of the application needs to be designed with flexibility so that changing organization structures, rules, and statutory laws and formats can be handled by the same application. The application should also be scalable as the organization grows larger over a period of time. Proven HR products like KServeHRMS™ specialize in all the above areas and hence it is better to leverage such products to handle this automation.
The decision also has to keep in mind that at some point the third leap will have to be made, and hence the choice of the product should be one that has the capability to execute the next leap also. If that is not made, it will lead to a reimplementation and re-purchase of another product to achieve that lead later on.
Leap 3: From integrated core areas to End to End automation/ Employee Self Service
Once the organization has automated its core HR transaction systems, the time is ripe to cover all areas of automation, and also expose this to employees for self service. It is not mandatory to automate all the applications before one goes for self service. It is vital, however, to ensure that the back office part of the application is functioning accurately before they are exposed to employees.
One could automate Payroll and make the pay slips available to employees, or automate leave alone and make it self-service ready. In all these cases it is essential to ensure that the back office component of the respective areas has been reconciled with accurate data and the transactions that update the system on a regular basis are accurate leading to useful services to employees live and online.
The investment decision to make the next leap is better done in one step, though this could also be phased out. The following are the reasons why the investment decision should be taken together
End to end solutions are usually provided by external vendors and hence it is vital to know if the vendor you choose can provide an end to end solution for your HR function rather than a part solution
Part automation of a peripheral area like training will lead to duplication of effort later since integration with the same employee database or other information will have to take place
The architecture of the whole solution should be determined from the deployment perspective, as well as from the technology perspective. Proliferation of solutions may lead to fatal flaws in the whole solution that may need to be reworked later.
A large part of an Enterprise HR product involves use of common utilities like approval routing workflow, mail or SMS alerts, performance indicator tracking, role specific alerts, dashboards and portals. Localized applications in one area will lead to lack of integrity
Newer environments for usage are coming up. Cloud (Private and Public), mobiles, tablets and other newer forms can provide tremendous benefits for HR managers and employees to improve their productivity. Applications from vendors that can effectively leverage these changes should be taken once for all HR functions rather than be taken numerous times separately.
Once the decision is taken, there has to be recognition that the implementation of the solution is a major one, which may be phased out and is to be executed in a professional manner. This means that internal and external positions of responsibility need created to implement the project over a period of time. Vendor selection, Change management, Extension development and IT infrastructure related decisions become vital for success.
Benefits of End to End Self Service Solutions
End to end solutions, especially ones with Self Service and live alerting via Email or SMS can provide major transformations in organizations. Approval routing workflows drive transactions through various stages of the workflow increasing the speed and reducing the effort in executing and completing processes. Leave requests, claims, infrastructure support, income tax workings and numerous other processes that are typically cumbersome to request, approve, process, monitor and account for are handled far more easily and automatically.
A typical HR interaction between an employee and the HR function (e.g. to determine leave balances) or to calculate tax deductions involve a lot of time if done manually. One could expect between two to four physical visits by the employee to complete the task, often taking weeks before the employee is satisfied. Compare that with a click of a button response. More important than the time saved is the satisfaction the employee gets through the process. He/ she now does not have to request, or sometimes plead, or even cajole to get responses now.
Typical benefits achieved from self service applications are
Increase in productivity of HR and payroll executives.
Time saved by employees while interacting with the HR and Payroll function
Perform actions at the convenience of the requestor or approval, and is available 24 x 7
Perform actions from remote offices, while traveling or even customer locations
Employee satisfaction and motivation due to speed and accuracy of response
Automatic processing of reports and statutory filings leading to accuracy and on time submissions
The difference between successful implementation of a HR initiative is the ease at which it can be executed. The success HR policies like frequent performance appraisals to ensure that the organization stays performance driven and goal oriented depends a lot on the ease of adoption and execution, and self service makes the difference between success and failure
Scale up size of organization, and HR services without equivalent additions in HR staff.
Each of the above points could be converted into tangible monetary returns for the organization which would normally justify the investment for the End to End applications.
For any additional information and advice on the above topic, one could visit www.KServeHRMS.com and make a query, which will be responded to as soon as possible.
You can also call or Mail to manish.kumar@kallossystems.com/+91 9379994111 for any advice for the best HR Practice in your company.
To meet our Representative at your city feel free to contact us.
