Three stories of self-service success – Case Studies

Three stories of self-service success – Case Studies – McData Corporation, Tally Defense Systems, WellPoint Health Networks Inc

Sarah Fister Gale

For decades, even the most experienced HR professionals have been forced to spend much of their time doing tedious data-entry tasks and fielding support calls. Because of the mountains of paperwork that flow into HR departments every day, there is little opportunity to focus on critical human-management initiatives. A recent Forrester Research study found that, on average, HR managers spend nearly 80 percent of every day administering employee benefits and answering routine questions.

It’s a poor use of the HR team’s expertise, but because of paper-based information-management processes, there’s been no way to avoid these tasks–until now. Many medium-sized and large companies are upgrading their HR management systems, adding self-service capabilities that will forever change the roles of the HR team. Self-service puts the responsibility for many information-management tasks, such as filing change-of-address forms and completing benefits enrollment, in the hands of employees, dramatically reducing the amount of time that HR staffers spend on administrative tasks. It frees them to focus their energy on achieving more strategic goals for the company, such as reducing turnover and developing skills inventories. It can also enable companies to deliver the same HR services using fewer people.

If a company wants to take better advantage of the skills of HR professionals or reduce the size of the HR department, self-service is an increasingly popular decision, says DJ Chhabra, vice president of global HRMS development at Oracle Corporation, an enterprise software company in Redwood Shores, California. “It eliminates non-value-added tasks, shifting the HR team’s efforts to the business side of HR.”

But the payoff of self-service is more than just happier HR people or even a smaller HR staff. It can also affect the bottom line in several areas, says Don Chun, director of Global HRMS product strategy for PeopleSoft, Inc., an enterprise application software company in Pleasanton, California. “Cost reduction drives the investment in self-service for most companies, and they are able to anticipate a quick return on investment in the software?

He estimates that most PeopleSoft clients see a return on investment in two years or less, as a result of improved accuracy in data collection, reduction in time to complete tasks, fewer calls to the HR department, and faster turnaround. For example, one of PeopleSoft’s clients documented spending roughly $10 to process a change-of-address form before moving to self-service. “With self-service, that cost dropped to 25 cents,” Chun says.

It’s an issue of efficiency. The $10 cost came primarily from the time it took an HR staff person to copy an employee’s handwritten form into all of the disparate databases. Using the self-service system, the employee enters the data once online and it’s automatically updated in all of the necessary databases. This level of savings is similar for every information-processing task formerly managed by the HR staff, Chun says.

Paper and mailing costs can be dramatically reduced as well, Chhabra adds. Pay stubs no longer have to be printed and mailed out-which can be a huge monthly effort and cost–and all HR-related documents can be completed and sent online, eliminating the need to print and distribute them.

Self-service HR tools also improve productivity and help attract and retain qualified employees, says Tom Tillman, director of product management and marketing for Best Software, Inc., a business management software company in St. Petersburg, Florida. Younger employees who have been raised with the Internet expect the freedom and rapid turnaround of self-service. They want access to company information and control of their own data.

“Self-service is an inevitability for most mid- to large-sized companies,” Chun says. That means in order to stay competitive, HR professionals must evaluate and update their skill sets. As data-entry tasks are eliminated, so too is the need for lower-level administrative employees, he says. “To move successfully into the future, HR professionals need to transform themselves into strategic business advisers.”

Open Enrollment Is a Non-Issue, Thanks to Self-Service

Name: WellPoint Health Networks Inc.

Location. Thousand Oaks, California

Type of organization: Health-care company

Number of employees: 17,000

When Chuck Moore was hired several years ago to upgrade WellPoint’s HR management system, administration of even basic employee documents at the company was a significant problem. The HR staff received up to 2,000 faxes a month that required some amount of data entry, but because everyone in the department hated dealing with the paperwork, entering the data was “the lowest priority, to be done at the end of the day’ Moore says. Consequently, critical documents piled up in HR in-baskets, delaying filing and frustrating employees, who logged up to 14,000 calls per month to the company’s human resources call center. “At that time, a six-week turnaround to complete a pay increase was considered good, and errors in all of the data were common,” Moore says.

The company initially implemented PeopleSoft 7.5 to centralize the HR databases, then upgraded to 8.0 in 2001 to take advantage of the new version’s self-service features. PeopleSoft 8.0 allows employees to see benefits options, update personal information, and view their pay history and 401(k) data online at any time. Managers can administer employee change information, such as pay increases and title changes, and complete employee reviews without sending hard copies to the HR department to be entered into the system.

WellPoint went live with the new version in August, with considerable success. Employees started using it almost immediately with little training or encouragement, Moore says. As of November 2002, the self-service system had tracked 17,000 separate users for the year, and managers had initiated an average of 300 promotions and 40 salary changes per month online.

“Now when data is entered in the self-service system, it’s done by employees and the information is updated immediately.” That means, for example, that a payroll increase shows up on the employee’s next paycheck–not six weeks later.

As a result, costs have been reduced dramatically and quality has improved immensely, Moore says. Within months of going live, paper flow to the HR department almost disappeared. In 2001 they received 63,000 separate pieces of paper; by November 2002 they had received fewer than 1,100 documents for the year, most of them via e-mail.

But the most obvious example of the success of the self-service system was the ease with which the company completed its open enrollment in 2002. In the past, WellPoint outsourced open enrollment to a vendor, which required months of planning and resulted in many errors and mishaps. Moore’s team used to begin planning for open enrollment eight months before the event, working with the vendor to design documents and establish the process. “It was a huge task that cost a lot of money and took an enormous amount of time,” he says.

However, since the installation of self-service, “open enrollment has become a nonevent,” Moore says. In 2002, forms and benefits information were available online, and employees were c-mailed reminders to complete their enrollment by the end of October. “On the last day of enrollment, more than 2,000 people made changes and there were no breakdowns,” he says. And he estimates that the reduction in man-hours, paper costs, and errors saved the company $400,000.

Except for monitoring the number of enrollment submissions and fielding calls, the HR team wasn’t involved at all, Moore says. “It trivialized the enrollment process, which means we can apply our resources to other projects such as improving recruiting efforts and reducing turnover.”

It has also changed the makeup of WellPoint’s HR team. “We don’t rely on administrative assistants anymore,” Moore says. “Our focus now is on employee relationship management.”

Self-Service Causes Call Volume to Drop 75 Percent

Name: Tally Defense Systems

Location: Mesa, Arizona

Type of organization: Developer of propellant systems

Number of employees: 300

As director of human resources for Tally Defense Systems, Marcie Franklin had many reasons to transition the company to a self-service HR management system. Reducing the amount of handholding that employees required for every decision or information change was a primary motivator, she says. Employees would often call to ask about such mundane issues as when they could get new safety goggles, or to check how many vacation days they had left. “Even though we sent all this information out, people would lose it and then call us when they had a need.” That meant her small team spent hours on the phone dealing with noncritical administrative issues. Franklin also wanted to eliminate unnecessary printing and labor costs, which would allow her to reduce the number of employees in the HR department over time. And she wanted to create a more open environment in which information was readily accessible to employees.

With these goals in mind, the company chose Best Software’s self-service HRMS in late 2000, putting much of the company’s relevant employee information online. “Now if employees want to know if it’s time to replace their safety goggles or to check if their training certification is up-to-date, they can find that information online,” Franklin says. They can also access salary and vacation history, review benefits information, and get copies of their W2 forms or verification of employment records–all requests that were previously filtered through the HR department.

She estimates that since the self-service system was implemented, call volume has dropped by 75 percent, now taking up less than 5 percent of her staff’s time and energy. The self-service tool also made it possible to stop printing and mailing pay stubs unless employees requested them–a job that occupied two full-time employees for several days a month. That is enabling her to reduce the size of her department through attrition without falling behind on HR obligations.

Franklin and her team are thrilled with the self-service tool, although it was a bit of a hard sell for some employees. “A few people were intimidated by the new system,” she says. “They wanted to know why they couldn’t just call us instead of having to find the information on their own.”

But, she says, winning them over was mostly a matter of education. Now when employees call with questions, instead of supplying them with the answers, HR staffers direct them to the Web site and walk them through the process of finding the information themselves. Franklin estimates that her team has coached half of the employees one-on-one on using the system, and the rest have figured it out on their own. “Now they all feel empowered because they don’t have to wait for us to provide them with the information they need. They just get it themselves.”

Self-Service Eliminates 80 Percent of Paperwork

Name: McData Corporation

Location: Broomfield, Colorado

Type of organization: Data storage and networking solutions provider

Number of employees: 1,000

In two years, McData tripled its number of employees, from fewer than 300 to more than 1,000. As a result, the HR team had to re-evaluate the processes they used to manage employee data and find ways to do more with less, says Deb Morton, director of business systems. “We needed to drive nonessential costs out of the business so we could be more efficient.”

The company’s HR processes depended heavily on spreadsheets and paper records. Resumes and employee files were maintained in hard copy, and the employee roster and workers’ compensation information were tracked on spreadsheets. Employee paperwork was frequently lost, and data inaccuracy led to payroll going to the wrong departments and employees appearing in the wrong cost centers. The company didn’t want to add more people to the HR department, but the existing team of three HR reps, two administrators, two trainers, and a vice president was overwhelmed by the work, and errors in employee data were widespread.

It was not uncommon for employees to have three different social security numbers recorded in three different databases, Morton says, and because of the legacy system’s limited reporting capability, managers could not track changes. “Because the information had to be entered manually into each separate system, there was incorrect and inconsistent data all over the place.”

The need to combine greater accuracy with less effort led them to the idea of employee self-service. “It just makes sense for employees to enter their own data directly,” Morton says.

Already a client of Oracle, they implemented the software vendor’s HR self-service application and immediately saw improvements in their processes. Once all of the HR documents had been moved online, routing time for document approval shrank dramatically. Instead of paperwork being sent through inter-office mail to be approved by managers who are often out of town for days at a time, now it is e-mailed so anyone can sign off on documents from anywhere there is Internet access, she says. That means that approval of employee documents, such as a promotion or a salary change, which used to take two to three weeks to complete, now takes two days.

And because the data is entered directly on-line by employees, the amount of paperwork handled by Morton’s team has been reduced by 80 percent, allowing her to avoid hiring six new people to manage the growing workload. Accuracy has also improved significantly now that fewer people handle the data.

Along with saving money, the self-service system has given management a better overview of its resources, allowing them to act more tactically, she adds. They now have up-to-the-minute employee data on such things as head count, training, and employee review details. “Having access to this kind of information enables them to make more effective decisions for the company.”

For the most part, employees supported the transition to self-service. Morton’s group marketed the switch through c-mails and the newsletter but offered little training. The only push-back they received was from a few engineering folks concerned about privacy, she says. “They were afraid that someone could use the refresh button on the browser-based application to access their personal data’ she says. The fear was unfounded. Once data is taken off a screen, it can’t be refreshed, she says. “Once we put their minds to rest, they accepted the technology.”

Selling managers on self-service, which will be rolled out by early 2003, has been tougher than winning the support of employees, she adds. “In the past it was easy to blame HR when information got lost or was incorrect. We were the convenient scapegoats.” Now managers will be expected to complete such tasks as online performance appraisals, status changes, promotions, and hiring and firing documentation.

Managers have been reluctant to undertake this responsibility, but Morton and her team have met with them on several occasions to help ease the transition. In staff meetings, lunch-and-learns, and computer-based training sessions, they’ve introduced the managers to the new system, answered their questions, and impressed upon them how cost-effective self-service can be. “Everyone here is very cost-conscious,” she says. “As we point out the benefit self-service brings to the organization, the managers begin to accept it.”

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