Deployment of Learning Management Systems

Related to talent management are learning management systems, since for organizations of virtually any size, ongoing training is an essential component of developing a workforce. Learning management software essentially delivers training to the desktop (often via a web browser, and is thus sometimes also called e-learning). It allows organizations to track and monitor which employees receive training (in other words, verifies attendance), when they are trained, and how well they understand the training material (for instance, by centrally testing their comprehension). Such systems are particularly relevant in industries that are bound by regulation and compliance issues (such as finance and health care) or that require employee certification.

To that end, these systems have also caught on in manufacturing, retail, and even casinos—due in part to the impact a better educated workforce can have on the top line. Manufacturing companies specifically are in need of more effective ways to manage their employees amid shrinking workforces (driven by plant closings and outsourcing) and skyrocketing benefits and disability expenses, and they have been grappling with how to deliver learning modules to employees with specific information. For instance, a company could design an event-driven workflow that is triggered by mandatory learning assignments, whereby a touch screen kiosk situated near the factory floor work area administers a training program. The interactive kiosk would then track, for instance, which individuals completed the module as well as what direct association they have with lowering machine downtime as a result of completing the training session. That would then tie back to HR and other associated enterprise applications.

Learning systems are also deployed to train employees on new products—either those they are using internally, or those they are selling to customers. Such systems are based on foundational software that acts as a database or administrative hub, tracking employees, course content, and other components, whereas on top of that may sit content creation tools and other middleware that helps distribute content. And then, there is the training content itself, which can be developed in-house or obtained from a universe of third parties. Cost avoidance (due to paper and travel elimination) and efficiency (for example, an enterprise has to quickly train its sales force prior to the launch of a new product and service) can be a primary reason for deploying learning systems, although one often has to reckon with a price tag in millions of dollars. GeoLearning, Knowledge Anywhere, Plateau Systems, SumTotal Systems, Intellinex, Saba, and Convergys are among the pure-play providers in this space, while some traditional ERP providers like SAP and Oracle/PeopleSoft have learning management functions as part of their human capital management (HCM) suites, like SAP HCM, Oracle HRMS, and PeopleSoft HCM.

Managing Contingent Labor

Also, more companies are reliant upon contingent or temporary contract labor and services now than at any other time. For the majority of companies, contingent labor is a significant component of the workforce mix, and they expect their reliance upon contingent labor to increase during 2006 and beyond. According to a recent survey conducted by Fieldglass, a provider of contingent workforce management solutions (which manage the business process of finding, hiring, managing, and monitoring contingent or contract labor or services), companies that take the opportunity to streamline their contingent workforce management processes stand to gain competitive advantage. The most cited motive (from about 60 percent of respondents) for improving the management of contingent labor and services was "improving the efficiency of procuring and managing services resources."

If organizations view employees as assets, then it follows that those assets should be allocated effectively, and in the context of business goals and demands. To that end, workforce management software generally involves staffing, developing, tracking, and rewarding employees. In practical terms, such software schedules employees based on business volume, and also tracks labor activities, projects being worked on, work orders, hours, and how workers should be paid. Workforce management software grew out of time and attendance (T&A) monitoring systems, and can now address many facets of the workforce, from making sure that assembly lines are adequately staffed on any particular shift, to identifying the best salespeople to tackle a new account and making sure they are rewarded properly. Workforce management software vendors include Ultimate Software, Kronos (which also recently acquired SmartTime), Automatic Data Processing (ADP), Softscape, Workbrain, 360Commerce (now part of Oracle), Kaba Benzing, MBH Solutions (including the recently acquired Concur HR product), WorkForce Software, and CyberShift.

The Total EAM Vision Strategic Advantages in Asset Management

Enterprise Asset Management systems (EAM) continue to point the way into the future for capital intensive industries. The combination of functionalities, asset focussed business intelligence and advanced management consulting have allowed some vendors to provide consistently high results to those industries whose operating model involves the management of large numbers of physical assets.

This specifically refers to industries in the areas of Mining, Oil and Gas, Defense, Utilities and Transport although it does also offer positive benefits for companies in some areas of manufacturing.

The Gartner Group defines EAM as the following:

"EAM consists of asset management, materials management, HRMS and financials"

Figure 1: Complimentary Effects between Managerial Functions in Capital Intensive Industries

The focus and structure of an EAM system recognises the strategic importance of asset management and provides a structure and depth of functionality dedicated to providing clear strategic advantages in these areas. It is for this reason that it is directed at the central role played by maintenance and includes the three additional functional areas in capital intensive industries that have a synergistic relationship with asset management. They have truly evolved into solutions for enterprise performance management in this industry sector.

It represents a key strategy to increase plant capacity, using information technology in lieu of new construction in large, asset-intensive enterprises. It integrates key plant control systems (PCS) and ERP with maintenance activities and functions to reduce downtime and minimize maintenance spending

The emergence of EAM as the solution for this style of industry has at times been confused both by clients, as well as by vendors.

Myth 1: EAM are only transactional Systems

While there are lower standard systems that offer only transactional functionality, a true EAM system builds on this data by providing advanced functions in critical areas affecting asset management. For example:

* Risk management and reliability engineering (Including predictive maintenance management)

* RCM

* Root Cause Analysis

* Advanced Workforce and Human Capital management

* Advanced Inventory Management

It is the inclusion of these ranges of functions that EAM systems are able to provide strategic advantages in asset management. Advantages that can separate industry leaders from their competitors.

Myth 2: Misunderstanding of the Areas of EAM

A common ploy by vendors of lower quality systems is to attempt to include other functions as a part of the core functionality of these systems. This effort of re-branding by specific vendors is not only misleading but affects the overall goals of asset management in industry. For example:

1. Addition of CRM (Customer / Client Relationship Management)
2. Addition of SCM (Supply Chain Management)

While these two system functionalities are important parts of managing enterprises., they are not vital parts of asset focussed industries. In fact the use of these systems, functions, in lieu of basic EAM functionalities, can substantially reduce benefits from the overall asset-centric solution. (Note: Basic CRM is considered to be a part of EAM)

An EAM provides a means of generating strategic advantages through the management of physical assets. And uses the issues of Asset Management as key drivers for achieving these advantages.

Recognised Benefits of E.A.M
In Q4 of 2001, the analyst organization ARC stated:

"Fast ROI and Hard Savings Keep the EAM/CMMS Software Market Healthy...The recent success of Enterprise Asset Management (EAM)/ Computerized Maintenance Management System (CMMS) solutions is directly related to strong corporate concentration on profitability. EAM/CMMS solutions are the only ones where a substantial and quick ROI can be realized."

This underscores the ability of these style systems to produce rapid results through advanced physical asset management functionality. The strategic importance of this, in terms of financial and non-financial returns on investment, cannot be overlooked by companies with large asset bases.
For a corporation to understand the potential impact of EAM it first needs to understand the strategic importance of asset management. The management of physical assets offers a vast area of potential strategic advantage for many companies. A thorough and accurate approach in this area can bring benefits in the areas of:

* Productivity

* Risk Management

* Asset utilization

* Quality of product and of client service

When combined with the added benefits available in applying EAM systems this adds potential areas of strategic advantage in:

* Utilization and development of human resources

* Financial optimization of the maintenance function

* Reduced inventory holdings

* Better vendor selection and management

* Human Capital Management

This requires a truly proactive approach to asset management. An approach that involve looking forward to take decisions instead of looking back. Proactivity, when expressed in terms of EAM, means:

* Use of "what if scenarios" and forecasting. This is a vastly under used area of all implementations. The ability of a company to be able to forecast differing scenarios when analysing the asset management function can add substantial value to a company.

* Accommodation of RCM style analyses

* Extensive use of Business Intelligence as a strategic asset for managers

* Providing for the creation of asset specific decision support information tools

* Allowing for asset policy decisions, in terms of redesign, changes to policies, identification of root cause analysis opportunities

* Inventory reduction, or increased efficiency decision support information

* Future workforce planning

It does not merely mean reacting to analysis. This practice, although recommended, is a reactive practice and focuses on what has happened. The key to proactivity is in focussing on what could happen in the future and planning accordingly.

Software as a Service beyond Customer Relationship Management and Sales

Despite the fact that this seems to be the focus of Microsoft's, SAP's, and even Salesforce.com's software as a service (SaaS) initiatives, surveys conducted by renowned analyst houses suggest that the more widespread use of technology accessible services through a Web browser is not necessarily centered on customer relationship management (CRM) or sales force automation (SFA) solutions, which focus on sales leads and customer targeting. Rather the technology is being used to share information and collaborate. The fact is that most enterprises have thus far invested tremendously in information technology (IT) support for administrative processes, whereas there has hardly been any investment in support for non-routine, cognitive information, which is of paramount importance for business decision makers, service and product innovators, and other staff members, who increasingly create the competitive advantage for the business. The tasks performed by these people require a mix of technologies, not just new technology. Users need access to unstructured data, unstructured content, and collaboration support. Yet, most collaborative teams have e-mail as the only mechanism of information exchange among knowledge workers. This is incredibly inefficient and can become increasingly overwhelming—to the point of becoming a negative productivity tool. For example, for anyone trying to collaboratively design a new aircraft and source its parts and assemblies, or manage a thousand scientists around the world working on a new drug, e-mail is a far cry from being an ideal tool for knowledge worker collaboration. Also, many smaller enterprises may need as much functionality as their larger brethren, making offering enterprise-level functionality via the SaaS model necessary, but also even more challenging. Given their enterprise resource planning (ERP) or accounting origins, the recent successes in the market of NetSuite and Intacct might vouch for this need.

In fact, applications are more often outsourced than infrastructure, and this is increasingly done through SaaS. These applications include travel services, human resources (HR) management (personnel, benefits, and payroll, from vendors like Taleo, Employease, Kronos, Ultimate Software, etc.), and billing and payment processing. Business to consumer (B2C) e-commerce and product catalogs are also delivered through SaaS. This includes dynamic pricing models, customer loyalty groups, targeted sales promotions, and other sophisticated sales tactics, as well as integration with other supply chain applications, those which do not necessarily need a large internal team of sales support people. Financial, tax, procurement, and customer service management have also followed suit. Companies are choosing to promote SaaS-based strategic sourcing and procurement applications ahead of well-publicized CRM deployments for a number of reasons, including, globalization, Web-based collaboration, manufacturing outsourcing in far-flung regions, and distributed order management (DOM).
Given this focus on information and collaboration, WebEx may very well be a leader in SaaS. Many of us have used the services of this on-line conferencing pioneer many times, but would not identify it as an SaaS leader. However, it should be straightforward to see how the multiple aspects of Web conferencing lend themselves well to the SaaS model. It moves well beyond shared presentations, workspace, and applications, and is supplemented by instant messaging (IM) and integrated with video and audio conferencing, often using voice over Internet protocol (VoIP) technology to bring the whole experience to the personal computer (PC). All of these features and benefits are available without purchasing, implementing, or managing a stack of hardware and software that is only used on occasion. Aside from e-meetings and presentations, another important use of WebEx is remote training, for example for regulatory compliance or IT support, as this reduces travel and increases business productivity.

WebEx uses a multi-tenant architecture, and the same core application serves every customer. Consequently, it is a far more stable business model than first-generation application service providers (ASP), which hosted specific instances of applications for each customer. The vendor also lets partners self-brand its WebOffice collaboration service, which offers group calendaring and scheduling, bundled with messaging, white boarding, and IM. WebOffice can also be billed directly from WebEx, typically for $10 (USD) per user, per month. It is thus not surprising that WebEx reportedly served its 14,000 customers with 2.2 billion on-line minutes in 2004. Moreover, approximately 60 percent of those conferences involved people from more than one organization.

While the market might have heard of Arena Solutions, which has long been offering an on-demand product lifecycle management (PLM) solution (see On-demand Product Life Cycle Management: Not Just for Small to Medium Businesses Anymore), a lesser known SaaS provider is Webcom, Inc. Webcom offers software solutions that simplify the quote-to-order process for the sale of complex products and services, such as those offered by Rockwell Automation, Motion Computing, Cray Computer, General Electric Industrial Systems, and ABB. Requiring only a browser, its solution, WebSource CPQ, allows customers to configure, price, quote, and ultimately propose their offerings across multiple sales and distribution channels, including customer self-service in a B2C setup, virtually at any time and anywhere. The software not only handles the traditional bill of material (BOM), routing, and diagram generation tasks frequently associated with product or engineering configurators, but also addresses the guided selling, proposal generation, and multilevel channel management tasks associated with sales configurators (for more information, see CRM for Complex Manufacturers Revolves Around Configuration Software).

Webcom touts that its software solutions provide the same level of depth as the on-premise peer products from Cincom Systems, Oracle, Trilogy, Selectica, Firepond, Big Machines, Access Commerce, etc., but without the highly involved and lengthy implementations typically associated with implementing these products on the customer site. One should, however, note that some of these competitors have been AppExchange participants, which indicates they also have SaaS prowess. The CPQ product, nevertheless, represents one of over thirty new partner-developed applications available via Salesforce.com's AppExchange (and linked by Web services), and it lets customers augment the base Salesforce.com functionality for more complex configurable product sales processes. Earlier in 2005, Webcom also joined the Siebel Alliance Program as a CRM On Demand Software Partner.
Another vendor has also caught our eye recently. MCA Solutions, the provider of the Service Planning and Optimization (SPO) suite of solutions, which helps companies in industries ranging from aerospace and defense (A&D) and semiconductors to industrial and medical equipment improve asset utilization and customer support, made a notable announcement in November 2005. It announced the availability of its SPO On-Demand solution, offering user companies one more way to gain access to its best-of-breed service parts planning solution. Generally available, the on-demand version is reportedly already helping some MCA customers across the high technology, telecommunications, and semiconductor industries reduce inventory, increase fill rates, and improve customer satisfaction.

As MCA recently closed a couple of hosted deals, interest in the vendor does not appear to be waning, as it has for many other prospects. This is no surprise, given the hosted software is faster to implement (in several weeks only), reduces the upfront hardware and software capital expense, and minimizes IT resistance to new software solutions. The announcement also means that smaller companies like Tellabs can now enjoy the benefits of software capabilities that larger companies like Cisco Systems are also using.

MCA's original, on-premise SPO suite is a Web-based suite of advanced inventory planning, forecasting, and execution solutions that gives companies the ability to manage and monitor inventory levels of mission-critical materials by providing global, real time visibility throughout the extended service supply chain. As commercial software devised to optimize assets in a multi-echelon service supply chain network, it supports these collaborative processes by linking the ERP and CRM systems of a user's company.

Simply put, the software supplies inventory forecasts based on the customer installed base, provides contract coverage analysis, and determines where to position spare parts most effectively to meet customer service requirements (i.e., it suggests the optimum stock levels and location for spare parts while balancing the required level of customer service with the allowed inventory investment). SPO is able to provide that level of information by using sophisticated risk-based algorithms specifically designed to handle the uncertainty inherent in knowing when or where a particular piece of equipment may fail, and a spare part will be needed. For more information, see Lucrative but "Risky" Aftermarket Business—Service and Replacement Parts SCM.

Software as a Service Is Gaining Ground

One does not have to closely watch the enterprise applications market to realize that the hosted delivery model is enjoying a new glorified, (or reinvented, if you prefer) status. Referred to as on-demand, utility computing, or software as a service (SaaS) delivery approaches, hosting has not only achieved buzzword status overnight, but the concept has been gaining ground through real deployments. Hosting was once known as application service provider (ASP), which has negative connotations stemming from the "dot.com propaganda, boom and bust," but this term is being replaced by these other, "sexier" terms (which are also quite possibly better value propositions). Industry giants (and some thought-leaders, which are not necessarily large vendors yet) are spending significant marketing dollars vouching for this old concept reborn.

Although there are subtleties and even distinct differences separating these terms and their associated business models, the various hosting flavors are all variations of the same market. New business models, markets, and providers are taking advantage of Internet-based technologies and standards to provide solutions based on the notions of standardization, interoperability, software component reuse, and automation. These terms describe a shift away from traditionally heavily customized (and supposedly unique) packaged software suites, owned and managed by user enterprises, which were expensive and time-consuming to develop, implement, and maintain (see The "Joy" of Enterprise Systems Implementations), and toward standardized, componentized, common, and lower cost software services sourced (and even cancelled) at will from service providers.

Whether referred to as hosted services, ASP services, SaaS, utility computing, or software on-demand, the idea is basically the same: instead of buying and installing expensive and pesky packaged enterprise applications, users can simply access applications over a network, with an Internet browser being the only absolute necessity. Thus, often there is no software and hardware to buy per se, since the application is used over the Internet and is paid for through a subscription or supported by a third party, such as an advertiser. Advertising-based software offerings emerged several years ago in the form of Web e-mail and Web calendaring. More recently, advertisers have realized that Web-based software applications are just another type of digital content that can be used to reach a targeted audience, and companies such as Google, Yahoo!, and Microsoft, are refining their capabilities to target users with context-based advertisements.
Burned by negative experiences deploying unwieldy packaged software suites on their premises, users are now wiser and more assertive. Increasingly, they are demanding software that is easy to purchase, easy to consume, and has tangible payback or return on investment (ROI). For users, their purchasing demands have almost become akin to retail purchases that can be made via credit cards. Rather than spending millions of dollars on software before seeing any inkling of ROI, users have started to demand a performance-based, shared risk model of software provision. The licensing and delivery of enterprise software products is therefore undergoing a fundamental shift from traditional upfront fees for perpetual licenses to incremental, per transaction, pay as you go (PAYG), or even success-based pricing. These are becoming popular alternatives, especially for small businesses and startups that do not have the same, large information technology (IT) budgets as larger, established companies. Companies can acquire software for a lower entry cost and pay for more only as their business expands (see Trends in Delivery and Pricing Models for Enterprise Applications: Pricing Options).

Though the price of hardware is decreasing and becoming more affordable, a major predicament remains: enterprise software applications, such as complex enterprise resource planning (ERP), supply chain management (SCM), product lifecycle management (PLM), and customer relationship management (CRM) systems, are often too expensive and too intricate for small companies to govern. While they can afford the necessary hardware, they do not have the IT staff and infrastructure required to support a major enterprise application. Relatively cheaper solutions are now becoming widely available, and vendors are addressing their customers' desire to use technology as needed. Users do not want to buy entire software packages or infrastructure when, typically, only a small percentage of the overall capability is used. User enterprises have also become more agile, requiring more flexibility in IT delivery and usage, as well as licensing and payment structures, and vendor business models. In the enterprise applications space, many customers are moving away from large upfront licensing contracts (with ongoing maintenance fees), to one that is variable, based on usage, and defined by a subscription-based relationship bundling the entire offering. There might also be a financial advantage to having the software be an expense rather than capital, which will depreciate over time.

A slew of recent moves by the most prominent contemporary market players may be another sign of enterprise applications' slow but ongoing evolution to SaaS, on-demand, and related hosted models. The market may be experiencing the beginning of the end of traditional user-based licensing on the customer's premises for a given period of time and product version. The vast majority of business application software vendors still generate most of their revenues by selling their software licenses (via compact discs [CDs] or similar physical media gadgets) based on the number of named or concurrent users or seats or on the number of processing hardware units (and sometimes on a per module basis, though this is often based on an unnecessary "wall-to-wall", "all you can eat" functional scope). Revenues are also derived from accompanying implementation services, post-implementation service, and support and maintenance, which are priced as a percentage (or more often as multiples) of these software license fees.

This model might be wearing out its welcome on both the vendor and customer side. For one, it tends to be cyclical, since vendors first sell their present product versions into the market, and then sell subsequent upgrades. Logicallly, sales revenue should peak after each major upgrade or product release, and then drop until the next one (on average every twelve to eighteen months). This creates a cyclical, yet erratic revenue stream, which, in turn, creates cyclical, volatile stock prices (for public vendors) and also has other business performance-related ramifications. Bundled with this is the inability of licensed, on-premise, packaged software to keep up with ever-evolving "best industry practices", since traditional packaged software is largely stuck in revolving major release cycles. These cycles require most of the research and development (R&D) effort to be spent on building and testing compatibility for operating systems (OS), databases, application servers, and other platforms.
On the other hand, many user companies are unhappy with the rigidity of the model, especially in terms of the tiresome and endless upgrade process, and maintenance fees that keep creeping up. This, coupled with the non-standard pricing, leaves them wondering what kind of deal they have gotten (and particularly whether they are paying for functionality they will not use any time soon). To put this into perspective: how often do we buy a lifetime's worth of snacks and coffee during one trip to the grocery store? Such shelfware comes in many forms, such as products that are acquired but never used, or modules that are bought as part of an entire suite. They are modules that were once bought to fulfill a function that no longer exists in the business, for whatever reason; and capabilities that have become redundant as they are replaced by new software applications. Though these gratuitous capabilities are hardly ever used, they still require license and maintenance fees. SaaS gives users the option of buying software applications as appetizers, which are far more sensible portions that satisfy a need. It decreases software bloat, and is far more kind to the IT system's "waistline". For more information, see Application Erosion: Eating Away at Your Hard Earned Value .

The widespread use of personal computers (PC), the Internet, and ensuing Web-based applications has had an essential impact on the way business applications are being sold and delivered. The development of Web-based applications has decoupled the user interface (UI) from the business application logic and its underlying software and hardware platforms. As a result, any user working at a PC with a Web browser can access a variety of business applications running on different software or hardware platforms in any number of different locations for the cost of a mere Internet connection. This decoupling has therefore allowed enterprise application vendors to begin to change their business model from traditional on-premise software license sales to the delivery of SaaS offerings.

However, a more important factor in the shift to SaaS might be a change in the way the software itself is created nowadays. Rather than software components being developed and bundled together to form a monolithic, rigid solution, systems are increasingly being developed as a "federation", "mash up" of services, or composite applications, which are only tied together at the point of execution. This will eventually enable alternative software components to be substituted between each use of a system, allowing much finer grained flexibility. A simple analogy is the use of an electrical appliance. The user does not directly negotiate with the electricity company to use power for the specific appliance. There are standards and controls, but they are broad enough that an electrical appliance can be plugged into the service without the user's notifying the electrical utility. On its side, the electrical utility takes care of the complexity of power generation, including matching capacity to demand, and it can change which generators and circuits deliver the power—all without coordinating these events with the millions of users who rely on the service.

The Imperative for Strategic Contribution

Most chief executive officers (CEOs) are challenging their human resources (HR) departments to make more strategic contributions to the organization. With HR traditionally viewed as a cost center, it is often difficult to know precisely what that means. CEOs, who are focused on growth, earnings, and shareholder returns, want HR to support corporate business objectives and to have the necessary data to support business decisions. These roles are necessarily integrated with HR's responsibility to ensure that there are qualified and satisfied workers when and where they are needed. The way to fulfill these roles is through process excellence, integrated HR systems, and accurate and actionable data from all HR departments. When these elements come together, HR can have a tremendous and meaningful impact on the bottom line.

It sounds like a lot to ask, but these demands are achievable today. And the HR department doesn't have to go it alone. There are technologies and service providers that can help move HR from the administrative rut, free up manpower for strategic tasks, and employ business intelligence capability to align HR with desired business outcomes.

The Role of Outsourcing

Human resources outsourcers play a critical role. Companies often choose to work with outsourcers to gain access to the latest technologies without having to make the associated capital investment. At most enterprises where HR functions have been outsourced, the initial tier of value is well-established. Processes are standardized and employee interactions are professionalized. Transactions are faster, more user-friendly, and less costly. As employee programs continually become more complex and difficult to administer, outsourcing consistently delivers high levels of service.

But it's that next critical tier where advanced HR outsourcing technologies are delivering strategic leverage by gathering and combining fragmented data from discrete vertical HR systems. When data from various departments is integrated into a reliable, consistent source of centralized information, HR can make better-informed and more strategic business decisions daily. The impacts of HR programs and practices can be assessed, and critical insights into the workforce revealed.

Sophisticated analytics can measure how HR systems and programs affect employee behavior and influence customer behavior (for example), ultimately impacting financial results and corporate growth. Companies are beginning to see that reducing HR administrative costs is only the tip of the iceberg. A new priority is to employ the technologies that provide data and analysis, in order to realize the savings that lie in HR.
For example, your time and attendance program tracks worker hours and absences, and is the entry process for generating payroll. A separate program handles short-term and long-term disability payments. Both of these systems are important. But viewed separately, they reinforce HR's traditional administrative role. An outsourcing solution that combines information from both systems and employs business intelligence functionality delivers a human asset management program that tracks absenteeism, peak work periods, and turnover. Now your data shows impacts on labor costs, overtime, and the amount of money spent on temps and employee replacement. This business intelligence can be used to closely align the workforce with long-term labor needs, manage absence and labor utilization, and thereby reduce operating costs.

Training, staffing, and recruiting programs can be linked in beneficial ways, too. There are lots of technology tools that enable prospective employees to submit r�sum�s online. But does your HR department use that information beyond the recruiting process? By integrating prospective employee data and skill sets against the company's development plan and training programs, qualified individuals can be "pipelined" into the organization over time, and existing staff can be educated. This ensures more strategic hiring decisions from the outside, and better use of existing personnel.

Succession planning is another key area where HR outsourcing can provide strategic value. For example, if a company has a 10 percent turnover rate, and it typically takes 30 days to fill a job, what does that mean for its staffing at any given point in time? It means the company is nearly one percent understaffed at all times. In an organization of 50,000 employees, that's 400 workers not meeting deadlines or producing, which negatively impacts customer satisfaction.

In that same scenario, add in the ramp-up time required for new hires to fill the open slots, and the "downtime" could be as much as sixty days per opening. Factor in absenteeism, short- and long-term disability, sabbaticals, maternity and paternity leave, job sharing, and other benefits, and the staffing levels are likely to be much lower than imagined. Using business intelligence technologies and analytics allows HR departments to better see and manage what is really happening with staffing levels, and predictive measurements can help plan more accurately for the normal ebbs and flows of business.

Selecting the Right Outsourcing Provider

As important as deciding to outsource HR functions, however, is selecting the right partner. Partnering with an HR provider is a critical business decision, and should be considered with the same due diligence as a merger or joint venture. Companies should be culturally compatible and share a common vision.

An outsourcing partner's service framework and delivery model should be engineered to meet your requirements, and there should be a clear definition of the scope of services and defined service levels. The objectives of outsourcing should be translated into service-level agreements so performance can be measured against stated expectations. Most large enterprises will want a full-service provider rather than one that handles just one element (such as payroll). References should be checked, and the provider should demonstrate capabilities in full-spectrum HR outsourcing (and have the financial backing to be around for the long term).

Remember, working with an outsourcer is not about giving up control. Rather, it is about finding the best ways to deliver quality service, impact organization economics, and provide the data that aligns the HR department with business outcomes.
In today's economic climate, all CEOs have a growth agenda that requires a solid and committed workforce—in other words, they need to have the right people in the right place at the right time. The true value of the human resource team will be measured in how well it aligns with this growth agenda. Effectively integrating HR business intelligence technologies is foundational to HR's metamorphosis from administrative cost center to strategic contributor to corporate growth.

Examples of Strategic HR

Here are some quick takes on how companies can strategically leverage HR for measurable gains. The impact areas and results in the list below are far from complete, and are provided here only as samples:

* Staffing levels: Aligning time tracking with disability and leave information fosters greater understanding of staffing needs.
* New hires: Melding r�sum� data with future business needs "pipelines" qualified individuals for impending job openings.
* Succession planning: Assessing skill sets of existing employees and overlaying it with upcoming job openings promotes hiring from within.
* Benefits cost: Integrating HR survey data with corporate goals can help predict changing corporate contribution rates that would result in more job turnover.
* Hiring assessments: Extracting data from various HR functions allows you to determine if increased hiring is due to growth and skill upgrades, or to unwanted turnover.

Essential Considerations When Selecting an Outsourcing Provider

Beyond general considerations with respect to the utility of outsourcing providers, there are specific questions which enable companies to determine the compatibility of a prospective provider:

* Do the provider's systems have the capabilities to meet specific technology and business requirements? Note that inadequacy with respect to this question can of course come on two counts: either the provider's systems are too "generic" to meet these specific requirements, or else (in the case where they do in fact address the particular requirements) they simply underperform.
* Does the outsourcer have a clear understanding of needed capabilities?
* Will the operation be transparent, both financially and managerially?
* Do the outsourcer and your company share a common vision?
* Does the outsourcer have a partnering mindset?
* Is the outsourcer's culture compatible with your corporate culture?
* Will the outsourcer be proactive in engaging your company to resolve problems?
* Are the scope of services and performance levels clearly defined in a service level agreement?
* Can the provider enable your company to deliver business performance impact?

By conducting a thorough review of the tangible and intangible elements underlying these questions, companies should be in a strong position to ensure that HR is not only a fundamental element for achieving corporate objectives, but an integral driver of success.