Human capital management

IBM Software April 2013 Enterprise Content Management Human capital management Achieving efficiency in key employee lifecycle processes

2 Human capital management As the workplace grows more diverse and budgets shrink, human resources (HR) professionals have strong incentives to improve overall HR efficiency and reduce the cost of managing critical employee information. Streamlining content and process management is instrumental in achieving these goals. The challenge for HR departments is how to cut those costs across a broad range of activities, including managing forms, documents, communications and content associated with hiring, maintaining employee records, managing labor relations, publishing policies and procedures, complying with regulations and supporting myriad employee interactions. Enterprise content management (ECM) can help HR departments optimize processes to achieve these goals. Today, HR organizations around the world are leveraging the IBM Enterprise Content Management (ECM) platform to: Manage content, communications and processes associated with the employee lifecycle from hiring to retiring Enable consistency and accuracy in the development and publication of policies, procedures, forms, documentation and training materials by establishing a central source for content and standardized processes across geographically distributed HR departments Improve efficiency and auditability in hiring, status change, dispute investigation and resolution, labor relations, retirement, and regulatory compliance processes associated with thousands of employees Eliminate the physical storage costs of retaining paper documents and records Provide a unified single view of individual employees by linking unstructured employee information to the employee record in the HR management system (HRMS), thereby reducing administrative costs related to searching and handling of employee documents

IBM Software 3 Streamlining HR processes Innovative IBM ECM capabilities enhance a variety of HR processes and activities with support for information capture (scanning, optical character recognition and classification of paper documents); document-centric business process management (BPM); integration of enterprise resource planning (ERP) and HRMS; case management; electronic forms; content analytics; and information lifecycle governance. IBM ECM offers these capabilities as shared services to support HR and other departments that frequently collaborate with HR, including legal, finance, operations and IT groups as well as outside agencies. Improved efficiency frees skilled HR specialists from timeconsuming administrative tasks, so they can focus on valueadded activities such as consulting, business leadership, compensation, workforce planning, labor relations and employee development. Addressing 10 major HR challenges HR organizations must contend with increasing complexity and diminishing resources even more so for widely distributed organizations or those operating internationally. IBM ECM capabilities promote overall cost and workforce efficiencies for managing document-centric business processes by enabling HR organizations to address 10 persistent challenges: 1. Reducing the cost, overhead and risk of managing paperbased employee records 2. Tracking, managing and retaining critical communications among HR and applicants, employees, agencies and regulatory organizations 3. Developing and publishing accurate, consistent HR forms, policies, procedures and guidelines in a timely manner 4. Managing complex employee lifecycle processes and interactions requiring the focused skills and experience of HR specialists 5. Stopping the proliferation of paper forms that impede accurate information-gathering and inhibit efficient processing 6. Providing authorized personnel with easy, secure access to employee information 7. Evaluating and implementing an increasing amount of corporate, industry and government regulations in a timely manner 8. Minimizing administrative overhead, allowing HR specialists to focus on value-added activities 9. Exploiting insights regarding employee skills, ideas and attitudes contained in employment applications, résumés and surveys to help guide planning, recruiting and staffing 10. Retaining critical HR information to remain compliant with evolving regulations The following sections discuss these 10 challenges, explaining how specific IBM ECM capabilities enable HR organizations to improve efficiency and reduce costs.

4 Human capital management Reducing the cost, overhead and risk of managing employee records on paper Paper documents applications, résumés, faxes, contracts, forms and acceptance letters are a source of vital employee information and at the same time, a hindrance to efficiency. Volumes of employee records contained in file cabinets or stored off-site have associated costs of physical storage, manual filing and refiling, copying and mailing. These associated costs can be substantial, especially for widely distributed organizations. Additionally, paper can expose organizations to confidentiality breaches and other risks if data is incorrectly keyed from hardcopy forms into the HRMS or misfiled. The AIIM Industry Watch states, The average proportion of office space taken up by paper is now 15.3 percent, and it would drop to 7.4 percent with an all-electronic filing policy, a saving of nearly 8 percent in overall office costs. 1 Consequently, HR organizations evaluating long-term storage costs may find that reduction or elimination of on-site and off-site file storage can easily justify an investment in a content management solution. In addition to storing thousands of employee files in its HR office, one insurance company was paying annual off-site storage charges for approximately 80,000 (former) employee records conservatively estimated to fill a file drawer 1.57 miles (2.5 kilometers) long. There are two ways to avoid the inefficiencies of paper documents. First, organizations with a substantial volume of employee files both current and historical can digitize these files to virtually eliminate physical cost and risk. Modern scanning and optical character recognition (OCR) technologies enable an HR organization to accurately capture information from a paper document, classify the document and then create a digital version of it. These digital documents can then be linked to individual employee records in the ERP/HRMS to provide a single view of information relevant to each specific employee. The single view is a complete, unified profile that spans multiple departments and data sources. Second, organizations can process paper documents using scanners or OCR devices at the point of entry, thereby eliminating paper from the start to heighten documentprocessing efficiency and security (often with the aid of BPM). According to AIIM research, mobile capture can speed data availability and keep paper out of the process while also improving data accuracy and reducing the number of lost or incomplete forms. 2 Tracking, managing and retaining critical communications among HR and other groups Certain email, faxes, formal agreements, employment contracts and other communications among the HR organization and candidates, employees, employment agencies, regulatory agencies, collective bargaining units and benefits providers must be retained for future reference and adherence to regulatory requirements. Often, however, these

IBM Software 5 communications remain in isolated silos such as email archives, file shares or desktop computers, making it difficult for an HR specialist to quickly access the relevant information when conferring with an employee, agency or benefits provider. In a worst-case practice, some organizations have been known to print these communications and then file duplicate copies in different locations. Email is typically the most prevalent form of communication. The ability to automatically capture inbound and outbound emails and logically associate them with a specific entity, such as a candidate, employee, labor relations group, recruitment agency or regulatory organization offers the HR specialist a detailed understanding of the relationship and prior interactions. Providing that understanding of relationships and interactions can in turn expedite responses to an inquiry or resolution of an issue. Other forms of important communications that record the interaction or relationship, including faxes, word processing documents and PDFs, can be logically associated with a specific entity and automatically retained as corporate records in conformance with company or regulatory requirements. Developing and publishing accurate, consistent HR materials in a timely manner HR publishes an increasing volume of corporate content, such as forms, policies, procedures, handbooks, regulatory guidelines and benefits information. In many instances, production of this information is a collaborative effort that involves several different departments. The majority of these Retaining all relevant inbound and outbound email communications associated with collective bargaining processes can be critical in the development and defense of a contract. Questions regarding the reason for a certain term or clause in the contract can be answered by referencing email history and draft versions of the contract. documents are drafted, reviewed and revised using Microsoft Office productivity software. However, the process can get complicated and lead to delays depending on the number of participants, length of publication, number of publications in process, and variations based upon line of business, language or geographic location. The process of synchronizing document edits and versions among the various contributors often bogs down otherwise efficient collaboration. Applying a formal business process to the document lifecycle including creation, review, approval and publishing allows authors and reviewers to work within the familiar Microsoft Office environment to accelerate the development and delivery of accurate and timely information to the appropriate channels, such as an employee portal. Creating a single source for accurate HR content helps eliminate the problem of employees acting on outdated information, initiating processes using obsolete forms or following incorrect procedures. If required, previous document versions can be retained automatically for future reference or compliance with regulatory policy.

6 Human capital management A private aviation service is using IBM ECM to help ensure consistent dissemination of common business content, forms, processes and procedures for its highly mobile global workforce, which accesses this information through the employee portal. Corporate news, job postings, health and safety alerts, compensation, benefits and education are examples of content made available to employees based upon geography and line of business. Managing complex employee lifecycle processes and interactions HR initiates and coordinates complex, protracted activities such as background checks, employee relocations, labor contracts, dispute investigations and resolutions, medical claims, disciplinary action and implementation of new regulations. These activities might involve subject-matter experts across the organization from management, legal, labor relations, health and safety and compliance. They might also involve external parties such as recruiting agencies, outside counsel or collective bargaining units. However, HR activities are also highly variable. They might include formal as well as ad hoc processes to flexibly accommodate the uniqueness of each situation. A variety of supporting documentation may be acquired throughout the process. Inbound and outbound email may be important artifacts of the process. In certain situations such as employee claims, response to collective bargaining, and regulatory reporting an organization must meet specific deadlines for response or completion. Too frequently, organizations lack the appropriate solutions to facilitate productivity and coordination. As a result, relevant information may be distributed across multiple sources and HR organizations may be unable to determine the current status of the activity. Other consequences include duplication of efforts and an incomplete context for understanding the issues or completing the process. A case management approach significantly improves initiation, processing, investigation and resolution of complex HR activities by providing a secure, collaborative environment that allows both required and optional tasks to be executed. This approach also aggregates all relevant information documents, email, reports and faxes together with data from ERP, data warehouses, HRMS and so forth to offer participants a complete context for understanding and resolving any given issue in a timely manner. Case management solutions capture real-time communications such as instant messaging as well as comments among participants to provide up-to-the-minute context that aids decision making while it documents the reasons for specific decisions. Business rules can be applied to high-volume processes such as employee on-boarding or separation to minimize administrative overhead. A particular strength of the case management approach is the capability to retain all of the documents, communications, decisions, record of processes and tasks completed essentially, the entire context of the case if any of that information needs to be referenced in the future.

IBM Software 7 A US government agency is adopting a case management strategy to facilitate employee on-boarding and separation processes involving the HR, payroll, financial and legal departments. The case management approach enables consistent and efficient cross-departmental HR processes for the tens of thousands of employee transactions executed annually. Electronic forms can contain sophisticated rules that verify whether correct information is entered in form fields, access existing data in HRMS to prepopulate forms and intelligently present the form to request only relevant, required information. Data from the electronic form can be used to immediately launch a business process upon completion of the form. As part of the process, a copy of the form as well as the information entered on the form can automatically be saved as a corporate record, if required. Stopping the proliferation of paper forms Converting paper to a digital format using scanner and OCR technologies can deliver immediate efficiency and cost-reduction benefits. In addition, organizations using numerous paper forms to capture employee information and initiate processes stand to achieve even greater efficiencies by replacing paper forms with electronic forms. For example, electronic forms help ensure that an employee is always accessing the correct, current form, not an outdated paper copy, to initiate a request. At many organizations, electronic forms now play a vital role in enabling employee self-service (typically available via an employee portal), alleviating the administrative burden on HR personnel. An international foods company with over 25,000 employees converted paper forms to electronic forms to capture employee information and, based on that information, automatically launch the appropriate process such as hiring, salary increase, transfer, promotion, retirement or skills training. Tight integration of electronic forms and BPM allows quick process modification. Completed electronic forms are automatically retained as a record of the transaction.

8 Human capital management Providing authorized personnel with easy, secure access to employee information Rarely is all relevant employee information available through a single, secure point of access. The HRMS contains employee master records, while other critical employee information such as résumés, applications, performance appraisals, medical records and certifications is typically maintained elsewhere. Information isolated in multiple systems or locations prevents the HR specialist from easily accessing the relevant information in a timely manner. This inefficiency can be mitigated by digitally capturing pertinent unstructured information that is acquired during the employee s tenure and linking that information to the employee s master record. Creating a single view of the employee helps provide complete context for understanding a specific employee s situation and efficiently resolving the request or issue. Accessible through the HRMS, it enhances the security of personnel information while offering greater efficiency for authorized parties. Plus, HR specialists no longer need to request and wait for information from different sources to complete their tasks. A European telecommunications provider links relevant unstructured employee information to the ERP HR module. This approach allows HR specialists to work within a familiar user interface while providing secure access to employee information expediting employee consultations and accelerating response to management requests. Evaluating and implementing regulations in a timely manner HR contends with a rapidly increasing number of new or changing laws and regulations that must be reviewed and evaluated, often in conjunction with the legal and financial departments, before being implemented. The difficulty of the process is proportionate to the number of pending regulations, potential impact of the regulations and implementation timeline. Here too, the case management approach streamlines the process by providing a collaborative environment that supports formal workflows and ad hoc tasks, instant messaging, comments and document versioning. By developing a formal, repeatable process for the creation, review, approval and publishing of policy and procedure documentation, case management helps smooth workflows and pushes them toward completion. Managing regulations as cases enables key personnel across departments, and even countries, to evaluate new regulations, assess their impact, develop implementation plans and create and publish new or updated policies or procedures. For example, it helps ensure that the appropriate subject-matter experts from HR, legal, financial and operations participate in the review process at the appropriate time, and in the proper sequence, to develop the final regulatory guidelines and implementation plans. In cases where new regulations supplant previous ones, previous versions of policies and regulatory guidance documents can be retained for reference.

IBM Software 9 After a consumer packaged goods company adopted electronic forms to replace all of its HR forms and integrated BPM with HRMS, it realized productivity gains equivalent to hiring two additional FTEs in its HR department. Minimizing administrative overhead Large HR organizations are involved in many high-volume, transactional processes such as hiring, on-boarding, employee provisioning, updating employee data, renewing benefits and managing retirements. These processes may involve numerous forms, disparate information sources and many manual tasks. Inability to determine the status of a particular employee s process often results in duplication of effort and delayed completion. The net effect is that HR specialists spend an inordinate amount of time on administrative activities. By integrating the capabilities of electronic forms and BPM with the HRMS, organizations can eliminate many employee requests, interactions and administrative tasks. Electronic forms support self-service by allowing employees to initiate a process or update information, typically through an employee portal. BPM avoids manual processes and enables tracking of important activities, allowing HR specialists to devote time and skills to high-value activities when working with their constituents. Process efficiency also allows an HR organization to accommodate employment growth or widen its range of services without adding staff.

10 Human capital management Exploiting insights contained in employment materials to help guide planning, recruiting and staffing A report from the Cornell University Center for Advanced Human Resource Studies highlights the growing interest in applying analytics to HR data. While only 13 percent of survey respondents indicated they had the necessary technology/ systems to facilitate HR analytics, 67 percent reported having the support of senior leaders for HR analytics projects and initiatives. In addition, all respondents indicated that they used HR data for basic reporting purposes. 3 Indeed, HR has access to vast amounts of employee data contained in HRMS, finance and payroll. HR groups often overlook unstructured employee information that resides outside these systems. Organizations can apply content analytics to that unstructured information to help uncover valuable details and generate new insights into the organization s current state. For example, organizations can apply content analytics to unstructured information in résumés to quickly assess the experience and skill sets of applicants or employees. They can analyze surveys that ask open-ended questions to uncover employee opinions and sentiment. In addition, they can analyze social media posts to assess the company s current reputation. And they can analyze performance reviews to determine what skills, practices and perspectives contribute to good (or poor) performance. Analyzing job classification, line of business, division or geography can provide a more detailed understanding of corporate culture and attitudes. Used in conjunction with analyses derived from other sources, content analytics offers HR professionals accurate, detailed insight to help determine how employee skills, capabilities and perspectives may influence organizational performance. Retaining critical HR information to remain compliant with evolving regulations Most documents created or managed by an HR organization are essential for ongoing corporate operations. However, consistent and cost-effective retention of these documents can be challenging given corporate, industry or regulatory requirements that often vary by size of organization, type of document or geography. Many HR organizations waste productive office space and budget by retaining paper documents on-site and off-site. Electronic retention of HR documentation and communications can produce significant benefits. First, it can save physical storage space and costs. Second, it enables immediate and secure information access for authorized persons not only for HR personnel, managers and employees but also for departments such as legal and finance that need access in response to audits, discovery or litigation. Organizations can capitalize on the information lifecycle governance capabilities (classification, records management and defensible disposal) of the IBM ECM platform to provide HR with the ability to automatically retain information only as long as legally required. As a result, these organizations can reduce the cost of digital storage and mitigate the risk of retaining outdated information.

IBM Software 11 A report from the Compliance, Governance and Oversight Council (CGOC) shows that 75 percent of respondents cited the inability to defensibly dispose of data as the greatest challenge. Many respondents also highlighted massive legacy data as a financial drag on the business and a compliance hazard. 4 Next steps: Assessing immediate HR optimization needs This white paper addresses 10 major challenges that HR organizations face and describes how strategic capabilities of the IBM ECM platform are designed to increase efficiency, reduce costs and minimize risk. To help determine how your organization will benefit most from the IBM ECM portfolio of solutions, consider which of these following statements most strongly reflect your most pressing challenges. Paper personnel files are usurping valuable office space or incurring high annual off-site storage costs. Important communications such as email, faxes and documents are stored separately from the entity or project with which they are associated. Numerous policies, procedures and guidelines need to be created or updated and published frequently; variations are required to meet specific line-of-business and geographic needs. Complex HR processes are delayed because of an inability to coordinate participants, information and tasks. Paper forms predominate, leading to data input errors, manual processes and misplacement. Inefficient access to employee information distributed across multiple systems prevents formation of a single view of each employee. There are delays in the evaluation, implementation or response to the growing volume of new or updated regulations. Administrative overhead has become unsustainable as a result of high-volume, manual processes; there is an inability to respond to employee requests in a timely manner. Personnel documents must be analyzed to uncover detailed insights that can guide HR strategy and planning. Personnel records and critical HR documents are retained longer than legally required, leading to increased physical and digital storage costs. For more information To learn more about the IBM ECM portfolio, please contact your IBM representative or IBM Business Partner, or visit: ibm.com/software/ecm To learn more about specific IBM ECM products and capabilities, please visit: ibm.com/software/products/us/en/ category/swn00?lnk=mprso-ecma-usen To learn more about IBM partner solutions that work with the IBM ECM platform to address specific HR needs, please visit: ibm.co/12qhxnh

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