The tides are shifting on the age-old question for Human Capital Management (HCM): Enterprise Resource Planning (ERP) Suite versus Best-of-Breed (BOB). The 1980’s movement toward a single vendor, single platform ERP system is altering its course toward modern, agile, single function, fully integrated systems. This change is being enabled with the growth of Web 2.0 – the method of software and service delivery via the Internet that is now penetrating all aspects of our work and personal lives.

In their article “Unbundling the Corporation” McKinsey consultants John Hagel and Marc Singer contend that “the forces that fractured the computer industry are bearing down on all industries. In the face of changing interaction costs and the new economics of electronic networks, companies must ask themselves the most basic of all questions: what business are we in?” The movement to outsource non-core functions to reduce ongoing costs and allow the company to focus on their core competencies is being made easier with the drastic cost reductions in communications and technology. Just look at the prices of cell phones and, in particular, netbooks, which now can do more than many desktops!

Because systems integration and human collaboration across space and time have never been easier or cheaper, it is now often more cost-effective to communicate across organizations than within one. Hence, we are seeing the unbundling of the modern organization into separate and discreet functions – either outsourced, offshored or split off into shared services centers – so that each function can focus on what they do best. Hagel and Singer maintain that “activities that companies have always believed to be central to their business will suddenly be offered by new, specialized competitors that can undertake those activities better, faster, and more efficiently.”

This shift is causing the modern organization to un-bundle and then re-bundle their activities and infrastructure into more agile, nimble structures that can change and scale up or down as business needs dictate. So what does all this means for the modern HR organization and for HR technology? HR has long been an organization that has worked across boundaries, and functions such as benefits and payroll have long been outsourced to third-parties. Yet, the un-bundling of HCM will have a much farther reaching impact. Beyond benefits, payroll, and call centers, we are seeing the un-bundling of HR services from RPO (recruitment process outsourcing) to off-boarding and the un-bundling of HR technology from licensed enterprise resource planning (ERP) software to subscription-based software-as-a-service (SaaS).

Adapting from Hagel and Singer’s model to HCM, the modern HR organization needs to focus on three key areas: employee relations, service delivery, and infrastructure and tools (see graphic below). These areas rarely match the company’s formal organizational structure, and each has different goals, different economies, and different competition and cultural underpinnings. HR business processes are typically cross-functional, stretching both horizontally and vertically across the organization; as they cross these different areas of the organization, the goals and expected results inevitably conflict. “Scope, speed, and scale can’t be optimized simultaneously; trade-offs must be made,” according to Hagel and Singer. Thus, it is by un-bundling HR and building dedicated teams to focus on specific areas – either within or outside the organization – that we can achieve the best results. Allow your recruiting partner to battle for the best talent, demand your benefits provider to provide the best-in-class, most flexible programs, and ensure your technology infrastructure is standardized, variable cost, and high scalability.

In this month’s Jeitocast Karen Beaman interviews Steve Parker on how HR Shared Services can help achieve greater efficiencies and effectiveness.  Steve talks about how it’s important to realize that not every high-volume, transaction-based activity is necessarily a good candidate to move into a shared services group.  The most effective use of the HR Shared Services balances three components together to determine what should be transitioned:

1. move non-strategic, non-business unit critical activities that will scale appropriately to Shared Services while making sure the business units can still operate effectively,
2. make sure expertise exists within your Shared Services staff to handle the activities in a cost-effective manner with improved quality,
3. re-engineer or streamline processes before moving them to Shared Servcies to take advantage of process improvement and standardization.

If you can’t standardize a process, you need to give some second thoughts to moving it into an Shared Services group.  Many failures in the delivery of services from the Shared Services function can be tied back to non-standard, one-off processes that cannot be effectively managed by the Shared Services group.

Given today’s economic environment, companies are under pressure to do more with less.  Often this involves standing up a Shared Services function.  But unless care is taken to ensure that the right processes are identified, standardized, optimized, and that the Shared Services staff is adequately trained to handle them, the result can often be more costly and less efficient.

Vinnie Mirchandani from Deal Architect is doing a series on the impact that technology has had/is having on hobbies and asked me to participate. You can read my take on technology and tennis here, as well as many other great posts such as the impact of technology of sailing, basketball, wine and beer making, gardening, chess, restoring antiquated books, and 30+ other interesting hobbies and life activities.  Many thanks to Vinnie for spearheading this great series!

Today is Ada Lovelace Day and I’m joining bloggers across the world to write a post about a person I admire in Technology. But first, here are a few words about Ada Lovelace, who is considered to be the first woman in technology:

“Ada Lovelace (1815 – 1852) is often referred to as the world’s first computer programmer. The daughter of the famous poet Lord Byron, and the admired intellect, Annabella Milbanke, Ada Lovelace represented the meeting of two alternative worlds: the romanticism and art of her father versus the rationality and science of her mother…. In her attempt to draw together these polar opposites…, Ada collaborated with the renowned mathematician and inventor, Charles Babbage.”

“Ada Lovelace’s reputation comes from her important work interpreting Charles Babbage’s Analytical Engine…. Ada translated Babbage’s paper on the principles of the Analytical Engine from French but in doing so she added lengthy notes and further level of understanding which perhaps even Babbage himself had not achieved. Babbage was impressed with her work, describing her as ‘the Enchantress of Numbers’…. Ada had understood the significance of the Analytical Engine and its implications for computational method. She saw that through the punched card input device the Analytical Engine opened up a whole new opportunity for designing machines that could manipulate symbols rather than just numbers. Her achievements are even more exceptional given the attitudes of Victorian Britain towards the intellectual pursuits of women.”

Like Ada, Row Henson is (one of) the first women in HR Technology.  Row has been involved in Human Resources and Human Resource Management Systems for the past three decades. Retired from full-time employment, splitting her time between her homes in Altanta and southern France, Row continues to be very involved in the Human Resource field. She is currently a PeopleSoft fellow, providing thought leadership, input, and advice on the company’s HRMS product line — a natural role for her after serving eight years at PeopleSoft as Vice President of HRMS global product strategy where she was involved in setting the direction for the company’s flagship Human Resources product line. She was voted one of the “Top Ten Women in Technology” by Computer Currents, received IHRIM’s (International Association for Human Resource Information Management) coveted Summit Award for lifetime achievement in her field, and was named the first Visionary of HR Technology at the Annual HR Technology Conference.

I had the pleasure to work with Row in 1997 when we were both living in Paris.  She joined the IHRIM Journal Editorial Advisory Board as I co-founded it, and we have continued to collaborate on articles, presentations, and publications in the field of HR Technology over the years. Among her many professional contributions, she was one of the early advocates raising the bar for HR technology beyond purely administrative and transactional processing to more strategic workforce management issues. Row is not only an admirable HR technologist, but also a wonderful, warm-hearted person, with a passion for travel, french food and wine, and a deep love for her dog.

A colleague forwarded this interesting presentation on to me by Linda Avey of 23andme about the work being done on mapping the human genome:

“With the advent of the Human Genome Project came the birth of a new term and lifestyle: personalized medicine, which promises to provide better care by analyzing the genetic basis of a disease and tailoring the treatment to the individual. As the science of genomics continues to improve, the implications could rock the medical world — and the ethical one. But when does personal become too personal?”

So naturally I started thinking about how the implications of this could “rock the HR world.” What role should HR play — if any — and how should data privacy and protection laws expand in this new world? I’m not talking about genetic engineering and creating superbabies — that’s something still in the realm of science fiction… I hope! But rather what role could/should gene mapping play in recruitment and selection, competency management, training and development? For individuals endowed with certain SNPs causing them to have particular skills or to be predisposed to certain professions, what role should/could HR have in counseling individuals to move in (or run from) a particular direction, such as finance and accounting versus business development or research and development? Will we start recruiting and screening our candidates looking for certain traits that we “think” make an individual successful in a certain position?
23andme presents their new service as an interesting exercise in determining your ancestry and how similar/dissimilar you may be from your siblings. Certainly interesting dinner conversation and a great topic for social networking sites. But now — for only $399 — you can get a complete map of your genome.

How far away are we from a $35 background check as part of pre-employment screening? What role could/should HR professionals play in this emerging field? I’m interested in your thoughts.