Managing the HR spectrum

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Magazine Article, Source : The Manufacturer
Zone : People and Skills
Published : October 2004

HR software comes in many shapes and sizes. Brian Davis examines how companies have chosen the best match for their operations

Managing human resources can be costly and time-consuming if all you’re using is an Excel spreadsheet and conventional paper-based systems. By comparison, automated systems are easy to update and navigate, and web-based self-service benefits both the management and their employees.

Specialised HR software packages or modules make human capital management easier than ever before. More accurate record keeping improves the accuracy of payroll, benefits and compensation programmes, and compliance reports. Training programmes can be reviewed online, skill gaps identified, and annual appraisals reviewed for succession and planning purposes.

Considering the importance of integrating HR functions with other business processes, surprisingly few UK manufacturers utilise HR software modules from big ERP providers. Though larger organisations favour HR modules from the likes of Oracle, SAP and Peoplesoft, the cost of these modules is often seen as a barrier to smaller firms.

Small and medium-sized operations tend to prefer specialist HR and payroll software from the likes of KCS, Kronos, Smart Human Logistics, Crown Computing, Mitrefinch and others. However, functionality and fit-for-purpose are just as important as gaining value for money.

Spring water bottlers Highland Spring is a case in point. The Perthshire-based company acquired a KCS K-Pay payroll system in 1999, and recently installed K-Time to handle its time and attendance (T&A) needs.

At the time, Highland Spring employed about 70 people and relied on a system of “trust and manual spreadsheets to track attendance,” says payroll account manager Avril Dunn. Faced with a rapidly growing workforce – which now stands at 300 employees – the company invited tenders from several T&A suppliers, including Blick, Mitrefinch, KCS and Kronos. KCS scored because the £23,000 K-Time system integrates easily with K-Pay and is primarily used as a management tool.

“K-Time provides everything we need, driven by health and safety requirements as our workforce has increased by 30 per cent over the last 12 months, and involves many more agency and contract workers.” Dunn also emphasises the benefit of using K-Time to generate an automatic roll-call list in the event of a fire alarm.

Self-service was not an immediate priority, and Dunn found implementation of K-Time more complex than expected. “Implementation took a few months, and involved a massive shift change, as we have a variety of working patterns with hundreds of different rules for flexitime, staggered starts and the like.”

HR software provider KCS sees growing demand for self-service and recently introduced a new business process management module, which is targeted at ‘field level’ operations. The software can send new employee details and HR-related events to key processes defined by an organisation. For example, if somebody joins a company, then a message is sent automatically to the fleet manager requesting a car.

One of Britain’s biggest bottling plants recently took the plunge into web-based HR self-service. Rexam’s glass bottle manufacturing plant at Barnsley employs 750 people and has run Smart Human Logistics HR software for a decade. The firm has now upgraded to Smart’s web-based eHL solution, which is based on Microsoft’s .NET architecture. “Our old T&A system was getting long in the tooth and we could not longer support a DOS-based system,” remarks Alan Haycock, Rexam’s HR manager. “We considered a couple of other systems, but decided to stay with Smart Human Logistics because of the level of customer support we’d received.”

The biggest benefit came with the original move from manual clock-in to an automated T&A system a decade ago. However, upgrade to eHL has provided more agility and scalability, as well as making significant savings on the admin bill. “We’ve managed to eliminate two data input people, two part-time payroll personnel and a time-keeper, as well as cutting down on absenteeism and improving T&A reporting,” says Haycock.

The switch to the eHL system took about four months, but managers can be trained up in the system within an hour. Supervisors and team leaders can now gain access to T&A screens via the intranet on their own desktops, rather than relying on dedicated terminals, to authorise overtime, holiday and training schedules. T&A information is downloaded into a Cintra payroll system at month-end. But full HR system integration still has some way to go. Training records are held on HR Classic software from Software for People, and Rexam also runs bespoke 360 appraisal software from Aston Zorastor for management appraisal reviews.

Neither of the above companies thought themselves big enough to consider using major ERP vendor solutions. But Plymouth-based semiconductor fabricator Xfab (formerly part of GEC Plessey) compared a range of solutions from Peoplesoft, SAP and other off-the-shelf modules, when looking for replacement of a bespoke mainframe system. HR manager Hilary Stanton concluded that the SAP and Peoplesoft modules were simply too large and expensive for their needs.

“We had a limited budget of £10,000 - £12,000 in the UK, and the group decided to standardise on Snowdrop System HR software, for sites in Plymouth, Germany and Texas to follow. Beginning with UK installation in April 2003, data download took several weeks, to ensure that data was clean and matched new records to old. An in-house team handled most of the installation and system change-over, with a little support from Snowdrop.

Snowdrop’s Evergeen software is used to maintain comprehensive personnel records, training records, job histories, parental leave details, appraisal reviews and benefit entitlements. “The system helps us monitor HR issues, track work patterns, pensions, salary history, holiday entitlement, benefits, training records and company compliance with the Working Time Directive,” says Stanton. The group also uses Fountain Executive to define skills and competencies, to identify skill gaps, and support career and succession planning. Some managers use the self-service online appraisal system for 360 degree performance reviews, but the system is voluntary, “as some people are uncomfortable with it,” admits Stanton.

Employees can access their own records via U-Access. They can apply for leave online, gain information on benefit packages, pensions and private health schemes. Managers also use the system for work resource planning. Automatic updates are also relayed to the Inland Revenue, payroll and other third parties when necessary. “The HR system empowers staff and enables us to be more proactive in work planning and training initiatives,” says Stanton.

ERP vendors Peoplesoft, SAP and Oracle mostly focus their HR solutions at larger organisations, employing 1000 or far more globally. “Performance management and learning management software should be part of everyday operations, and HR software should integrate readily into the business process,” maintains Peter La Salle, director of product marketing for human capital management at Peoplesoft.

Peoplesoft offers a wide range of HR and financials packages, including Peoplesoft HRMS8.9, global payroll, and workforce performance management. HRMS8.9 is the backbone of the human capital management suite, and handles employee tracking, job history, skills and competencies for companies including British American Tobacco, Chivas Regal, Michelin and Unilever. Better integration of HR software gives managers the opportunity to improve workforce performance, integrating appraisal with skills management, training programmes and performance scorecards.

Specialist packaging and security products manufacturer API is currently deploying an Oracle e-business and HR suite at several locations here and abroad. The company employs 1500 worldwide, including 900 in the UK, with headquarters in London. Previously API operated a variety of mid-tier ERP packages, from Evolution, Syspro and BPCS. But now favours Oracle as a one-stop shop for HR, financials and procurement.

“The Oracle HRMS system was the best fit for function as our core business is manufacturing. Oracle also provides consulting services and on-demand hosting services,” says Iain Anderson, director of information systems, API. “We looked at tier one and mid-tier solutions, and came to the view that only tier one software would integrate properly with our core manufacturing operations.”

First, API built a global template to fit operations worldwide, then tailored it to meet site specific requirements. Initially, API is using Oracle HRMS to hold basic employee and payroll records. But the long-term goal is to extend the functionality to cover the complete employee lifecycle for recruitment, appraisal and training programmes. The system will also hold health and safety information and details of skills for competency management.

“Till now, our HR resources have been very fragmented, involving operations worldwide,” says Anderson. About 30 admin staff have been involved in HR management. “Our goal is to create a common approach to HR management. The benefits will not only be financial, but also promise a new level of consistency in our human capital management.”

Self-service goes live in the Laminates Group at the end of 2004, with other operating divisions to follow. Employees will be able to update their own personnel records via the Oracle intranet, and share information about competencies and skills. Benefits packages will be brought into line across the group. Training needs will also be identified at management level.

The Oracle HRMS system is closely integrated with a new Oracle IIi ERP system which is being implemented at the same time, to handle everything from order management, to factory automation and output financials. The HR system accounts for about £500,000 of the total £2.5 million IS budget, with estimated payback of two years. “As a rule, HR software must be closely matched to manufacturing needs,” Anderson insists.