Identifying and Measuring Outcomes

This is all about identifying and measuring the outcomes from the implementation of the e-HR solution and comparing those with the stated goals. As already stated, outcomes can be positive and negative, intended and unintended, and the extent to which e-HR has resulted in outcomes is still uncertain.

On the one hand, some surveys have reported quite dramatic reductions of up to 60% in transaction costs, the length of time taken to deal with queries, reductions in inquiries directly to HR and service centres, and reductions in headcount associated with HR administration. In addition, they have also reported increases up to 50% in employee satisfaction with HR and impressive returns on investment, showing payback times of 22 months (Singapore Ministry of Manpower, 2003; Watson Wyatt, 2002; CBI and KPMG Consulting, 2002).

These kinds of benefits are also reported by Ruddy (2002, p 7). Speaking about the e-enablement of HR at BAE systems, he says:

“e-HR is a pot of gold. In year one of the project, what we have is a guaranteed cost reduction of 10% of our HR spend and 15% in subsequent years…. We’ve had no resistance from staff or line managers. Every employee recognises that the web is very much the way we have to do business round here. So e-HR is embraced rather than pushed back. If there’s a problem, it’s that our customers, both external and internal are demanding greater enhancements and improvements to our e-HR capabilities. I think I’m in the lucky position where our internal customers can’t get enough of e-HR, which is a great measure of success.”

However, it is entirely reasonable to assume that these comments are at least to some degree influenced by corporate ‘spin’ and do not reveal the fuller picture ‘behind the scenes’.

Similar bullish statements, particularly in relation to cost savings, can be found in the literature of the e-HR software vendors. As Harrington (2000) observed, Oracle, a software vendor, reported that in 1998, 60 per cent of its HR effort was dedicated to administration. By 2000 an e-HR system had led to savings of $1.6 million for each 10,000 of its employees, and it was now employing one HR staff member for each 2000 employees rather than one per 1000 previously.