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!

Not since the appearance of Client/Server technology in the early 1990s has the Human Resource (HR) business community experienced such marketing hype surrounding a new technology as we have seen recently with Software-as-a-Service (SaaS). From an IT perspective SaaS is a distributed computing solution and from a business perspective it is a hosted application delivery solution. It is a revolutionary concept that has changed the enterprise perception about computing economics and created a new business model for the purchase and utilization of business applications. As the world sinks into a global recession all forms of business expenditure comes under close scrutiny, and the SaaS business model is a perfect way to reduce Information Technology (IT) costs and help steer companies through the recession period. Although recession-friendly SaaS still has two major barriers to overcome before there is universal adoption of the SaaS concept. They are security and integration. This article describes the SaaS model, identifies why security is a customer concern, and outlines the integration problems associated Human Capital Management (HCM) software applications.

You can download the full article here => HCM perspective for Software-as-a-Service

Communication is the focal point for all successful interaction within and across organizations. As communication tools and technologies have evolved over the decades, the nature and expectations of the workforce have changed. The figure below shows a collection of sites, services, methods, and technologies mapped along the axes of Location and Collaboration.

In the lower half of the graphic are the traditional, tangible methods of communication, such as company directories, manuals, newsletters, meetings, conferences, as well as the company picnic, hallway discussions, and informal chatter around the water cooler. The collaboration and communication technologies shown in the top half of the figure have grown out of the digital age: in the upper left are those referred to as Web 1.0 and in the upper right are what have collectively been called Web 2.0.

The term Web 1.0 is a “retronym” – a term developed after the creation of the term Web 2.0 in order to refer to the previous state of the Web. Web 1.0 can be generally characterized by the development of static websites with read-only material, widespread computer illiteracy, and slow Internet connections. Some examples of websites that have evolved from the Web 1.0 era are Yahoo! and Amazon.

According to Wikipedia, “Web 2.0 describes the changing trends in the use of World Wide Web technology and web design that aim to enhance creativity, communications, secure information sharing, collaboration and functionality of the web. Web 2.0 concepts have led to the development and evolution of web culture communities and hosted services, such as social-networking sites, video sharing sites, wikis, blogs, and folksonomies.” The main difference between Web 1.0 and Web 2.0 is that of programmer-generated content versus user-generated content, hence Web 2.0 places a heavy focus on ease-of-use so that users can easily contribute content on a real-time basis.

Web 2.0 technologies cover a broad spectrum of websites, services, methods, and tools such as the following:

Online Marketplace – where buyers and sellers collaborate over offers and purchases, such as pioneer eBay, and later Amazon, Craigslist, Angieslist, and now all major retailers.

Mass Communication Tools – where workers communicate freely in a subscription-based or ad hoc approach, such as RSS feeds, readers, blogs, podcasts, videocasts, YouTube, Flickr.

Instant Messaging – tools that facilitate remote collaboration over the Web through real-time messaging, such as trailblazer ICQ and now Yahoo, AIM, MSN, Google Talk, and Skype.

Social Software – where users network and communicate with others of similar interests, such as MySpace, Facebook, Linked-In, Plaxo, Orkut, Xing, Ning, SelectMinds, and many others.

Collaborative Documentation or wikis – where people contribute knowledge to build a common database, such as pioneer Wikipedia, and others such as Answers, Google Docs, Jive, SocialText, Confluence, and Basecamp.

Web Meetings – screen sharing, audio, and video via the Web allowing users to conduct virtual meetings and collaboration sessions, with such products as WebEx, GoToMeeting, and Dimdim.

VOIP (Voice Over Internet Protocol) – a method for transmitting voice over the Web enabling real-time conversations, such as Skype, Vonage, and MagicJack.

Web Development Software – collaborative Web 2.0 programming languages and tools that improve the user experience, such as Ruby on Rails, Drupal, Ajax, Flash, Dreamweaver, etc.

Tags and Social Bookmarking – a framework for storing, organizing, searching, and managing websites via metadata and making information publically available to others, such as Delicious and Google Bookmarks.

Smart phones – Web-enabled, multi-function cellular telephones, incorporating telephony, calendaring, Web surfing, music/video, and gaming, such as the iPhone, Blackberry and Palm Treo.

Status Updates – tools that that facilitate staying touch with friends and colleagues, such as SMS (Short Message Service) commonly known as text messaging, as well as microblogging tools like Dodgeball and Twitter.

Crowdsourcing or Community-based Design – taking an activity generally performed inhouse and outsourcing it to a large group of undefined people to enhance work and innovation, such as vendors using potential customers to help design new products.

Virtual Reality Software – software that simulates another world that can be used to create more effective, life-like training scenarios, such as Second Life and World of Warcraft.

Effective leadership of the modern, multi-local workforce requires agility and mastery of skills along many dimensions, from informal chats to networking approaches to formal meetings and written documentation. The figure below summaries key communication strategies common for each of the four groups of workers making up today’s talentforce: local, remote, digital, and virtual.