Transactional HR self-service applications typically get implemented first because they typically automate manual, error-prone processes.

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1 Research Publication Date: 28 August 2008 ID Number: G HR Self-Service Applications Defined James Holincheck In this research, we discuss the different types of HR self-service and strategies for getting more value from these investments. Most organizations have invested in transactional HR self-service applications, but the greater opportunities lie with morestrategic HR self-service applications and communication services. Key Findings Transactional HR self-service applications typically get implemented first because they typically automate manual, error-prone processes. Having an accurate "reporting to" structure is critical for strategic manager self-service (MSS) applications. Transactional MSS applications are often implemented first to help better maintain the organizational hierarchy. Not all HR self-service is delivered in self-service applications. Strategic HR self-service functionality is embedded in talent management and workforce management solutions. Portals can provide a common front-end to a multisourced HR self-service environment. This can help with manager and employee adoption of these applications. Recommendations Start with employee self-service (ESS) applications. Many of them are very easy to set up and deploy while getting the self-service infrastructure established. Take a holistic view of HR self-service and consider all the applications that you might implement. Ensure that you take the employee and manager point of view so that you create a compelling user experience that drives wide adoption. Self-service is part of a complete HR service delivery model. Get feedback from your HR service center and HR subject matter experts about questions and issues they are still getting after implementing self-service. This can drive continuous improvements and lower service costs. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

2 WHAT YOU NEED TO KNOW HR self-service applications can not only automate manual processes, but also support morestrategic HR activities. However, most organizations start with the transactional, more tactical HR self-service applications because they set the foundation for more-strategic talent management and workforce management-related self-service. Adoption of self-service is key. Ensure you create a compelling user experience to drive adoption. Self-service is an important part of a comprehensive HR service delivery model. Once HR self-service applications are implemented, focus on continuous improvement across the whole service delivery model, not just self-service. ANALYSIS Context Most large organizations either have a core human resource management system (HRMS) personnel, payroll, and benefits administration or they outsource in these areas. These applications (or the outsourced services) are typically focused on the duties of HR professionals. However, much of the mundane, low-value administrative work done by HR is entering data from paper forms filled out by employees and managers. Proper implementation of HR self-service applications can not only eliminate that manual data entry (lowering costs and improving accuracy and cycle time), but also set the stage for implementation of more-strategic HR selfservice applications (and free up time for HR personnel to focus on higher-value-add activities). Analysis HR self-service applications are not new. The CedarCrestone HR Systems Survey shows significant adoption today, with even greater adoption in the next three years (see Table 1). Table 1. Adoption of HR Self-Service Applications In Use Planned in Next 36 Months Employee Self-Service 55% 33% Manager Self-Service 34% 45% Source: The CedarCrestone HR Systems Survey However, we find that even those organizations that have implemented ESS and MSS are unsure if they are getting the most value from their investments. These organizations are looking to see what additional possibilities may exist to get more value from their HR self-service investments. This research discusses the different types of HR self-service (see Figure 1) and strategies for getting more value from these investments. Most organizations have invested in transactional HR self-service applications, but the greater opportunities lie with more-strategic HR self-service applications and communication services. Publication Date: 28 August 2008/ID Number: G Page 2 of 6

3 Figure 1. Types of HR Self-Service Employee Self-Service HR Personal Data Changes Address and Emergency Contact Changes Employment Verification Job Postings Self-Assessment Career Development Training Request Benefits Open Enrollment Life Event Changes Stock Options 401K Programs Pension Administration FSA Life Insurance/Disability Employee Perks Payroll Time Reporting PTO Request Payroll Tax Deduction Online Pay Slips Online W-2 Source: Gartner (August 2008) Manager Self-Service Transactional Personnel Actions Strategic Recruiting Performance Management Staff Development Succession Planning Compensation Planning Scheduling Contingent Hiring Communication Services Corporate Communications Corporate Policies Employee Directory Employee Surveys E-Learning Employee Self-Service The examples in Figure 1 are U.S.-centric, but give a taste of the different types of ESS. We have classified them into three major categories: HR-related, benefits-related and payroll-related. HRrelated employee self-service includes the ability for employees to update their own demographic data (for example, personal data, address and emergency contacts), get employment verification (required for car loans, mortgages and so on), and manage their own career (apply to internal job postings, self-assess competencies, do their own career planning self-directed career paths and request training). Benefit-related ESS revolves around being able to make claims or requests for benefits (defined benefit or defined contribution plan payouts, exercising stock options, flexible spending account reimbursement, life/disability insurance claims request, and so on) as well as updating or changing benefit elections (annual open enrollment or life event changes). In addition, some employers provide self-service access to additional benefits for employees like negotiated discounts with merchants. Payroll-related employee self-service includes capturing inputs to the payroll process (time reporting, paid-time-off requests, payroll deductions for example, charitable contributions and payroll tax allowances for example, W-4s). In addition, payroll-related self-service also supports delivery of outputs of the payroll process (direct-deposit requests, online pay slips, online tax documents for example, W-2s). This is not an exhaustive list of ESS applications. However, these are the most common ones we see Gartner clients implement. Customers should start their HR self-service implementations with ESS applications. Many of them are very easy to set up and deploy (for example, updating Publication Date: 28 August 2008/ID Number: G Page 3 of 6

4 personal information) while getting the infrastructure established for further self-service implementation. There is not a lot of business logic required typically (although there are exceptions like benefit open enrollment or life event changes). There are a number of benefits that customers get from implementing ESS, including lower HR service delivery costs, reduced cycle times, and lower paper, printing and distribution costs (see "Leveraging HCM to Reduce Labor Costs"). Manager Self-Service Most organizations implement MSS as a separate phase. There are three main reasons. First, implementing ESS allows the organization to establish the necessary technical infrastructure. Second, implementing ESS causes a great deal of change for all employees, so there is a desire not to change too much too quickly. Third, MSS applications are generally more complicated than ESS applications to implement. Most MSS applications have a workflow component for approval processes. Many HR organizations struggle to have an accurate "reporting to" structure to guide that workflow. That is why most organizations start with transactional MSS. A transactional MSS application helps keep the "reporting to" structure accurate, enabling the more strategic MSS applications to work appropriately. A transactional MSS application automates the approval of personnel actions (for example, promotions, transfers, leaves, salary changes). Most organizations have some sort of personnel action form that a manager fills in and sends around for approvals. Ultimately, the personnel action is logged in the HRMS system by someone in the HR department. However, by the time the form has been routed and approved and the data entered, often weeks could go by. A transactional MSS application automates personnel actions, reduces cycle times and keeps the "reporting to" structure up to date. This is important because strategic MSS applications rely on accurate "reporting to" relationships to drive their processing. A requisition approval in recruiting requires routing to the right approver. A manager who wants to cascade goals to his/her employees needs to have an accurate view of who reports to him or her. A compensation professional who allocates merit increase budgets needs accurate hierarchy information. In addition to recruiting, employee performance management and compensation, there are other strategic MSS applications, such as contingent worker hiring (for example, hiring contractors or consultants), staff development (creating a development plan for an employee) and succession planning, that rely on an accurate picture of the organization. These are all talent management applications (see "Talent Management Applications Suite Can Enhance Workforce Effectiveness"). They are not sold as HR self-service applications at all. In fact, it is a little bit of a misnomer, as many of these applications include both MSS and ESS. In addition, there are other strategic MSS applications, like labor scheduling (along with more-transactional activities like time sheet approval or paid-time-off approval), that come in workforce management solutions (for example, time and attendance). Communication Services HR self-service should not be just about entering data to support HR-related business processes. Self-service can support push and pull styles of communications with employees. For example, employers can push out specific communications to specific employee populations. In addition, it can push out employee survey instruments to gain insight into employee satisfaction and engagement. Also, it can allow employees to pull information at point of need. For example, employees can look up information in corporate policy handbooks and organization directories when they need it if those resources are made available via self-service. In addition, employees can access more dynamic content such as e-learning through the same mechanisms. We see communication services evolving to include more emphasis on social-software capabilities that Publication Date: 28 August 2008/ID Number: G Page 4 of 6

5 promote more employee collaboration (see "How to Use Social Software to Support Your Learning Ecosystem"). Many Different HR Self-Service Applications From Many Places Most organizations do not get all of these HR self-service applications from a single vendor. The transactional ESS and MSS applications are typically sourced from an HRMS provider or outsourcing vendor(s). The strategic MSS applications come from talent management and workforce management vendors. The communication services may come from a specialist knowledge base provider. Each of these different sources of self-service applications will have its own user interface, navigation and security. From a manager and employee user perspective, this is daunting. Many customers will invest in portal technology as a "front end" to their HR selfservice applications. The portal technology can support "single sign-on" to the various self-service applications (assuming it is supported by those applications). In addition, a portal can provide a common navigation scheme for accessing the self-service applications. Finally, a portal allows a customer to add content around the self-service transactions. Most ESS and MSS applications are used infrequently, so this content can be used to assist employees in using the applications more effectively. You should take a holistic view of HR self-service and consider all the applications that you might implement. Ensure that you take the employee and manager point of view so that you create a compelling user experience that drives wide adoption. Getting More Value From the HR Self-Service Investment In addition to providing a richer user experience for employees and managers through portal integration and associated content, customers should look at self-service as part of a broader HR service delivery model. Employees and managers are not going to be able to do everything themselves. Many large organizations have set up service centers with less expensive, less skilled workers supported by technology to provide a first line of support for employees and managers. If more-specific domain expertise is required or a policy issue arises, then the issue can be escalated to the appropriate HR subject matter expert. Customers should use the data collected by the service center to understand frequently asked questions and update HR selfservice as needed to enable additional employee and manager self-sufficiency. This can drive continuous improvements and lower service costs. Key Facts Of respondents to "The CedarCrestone HR Systems Survey," 55% and 34% use ESS and MSS applications, respectively. RECOMMENDED READING "Person-to-Process Interaction Emerges as the 'Process of Me'" "Modernizing ERP: How to Make Users Fall in Love With ERP All Over Again" "The Portal Fabric Will Enable Each User to Be the Center of the Portal Universe" "Magic Quadrant for Horizontal Portal Products, 2007" Publication Date: 28 August 2008/ID Number: G Page 5 of 6

6 REGIONAL HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT U.S.A European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo JAPAN Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, andar World Trade Center São Paulo SP BRAZIL Publication Date: 28 August 2008/ID Number: G Page 6 of 6

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