HR becomes a strategic business partner

The growing use of IT in HR departments will allow HR staff to take on a more strategic role within the organisation. However, CEOs need to be convinced before this vision can be widely realised.

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By  Neil Denslow Published  February 27, 2003

|~||~||~|Traditionally, HR has been viewed as merely a back office function only dealing with payroll and leave applications. However, the greater use of technology is allowing HR departments to offload these transactional responsibilities and gain a better view of the workforce, which is enabling them to take a more strategic role within the organisation instead.

“Without people a business can’t work, so how can that be a back office task?” asks Michael Baker, senior director, e-business suite, human resources management system, EMEA, Oracle.

However, while some companies are beginning to accept the idea of HR becoming a strategic business partner, others, especially within the Middle East, are yet to be persuaded. “You’re starting to see HR directors appear on the major [companies’] boards, and, as a concept, HR directors understand it, the challenge is convincing the CEOs,” continues Baker.

Some companies in the region, however, have begun to accept the importance of HR and are investing in technology to remove the transactional burden from their HR departments. IT distributor, Tech Data, for instance, has started to deploy a self-service system in order to automate many of its HR processes. The company is looking to extend this, as it makes HR a central part of it business organisation.

“Our HR director is already pretty involved in strategy decision-making [as well as] helping other directors with re-organisation and resource planning,” explains Eugenie Papadopoulus, human resource officer, Tech Data.

Dubai Duty Free (DDF) has taken similar steps to automate its HR processes as part of its Oracle 11i E-Business Suite implementation. This has enabled DDF’s HR department to support its growing number of employees without needing to take on extra back office staff.
The company is trying to move HR away from being a transactional function to a ‘strategic business partner,’ however, it has so far made only a limited amount of progress. “I think we are still very early in that curve,” admits Ramesh Cidambi, DDF’s senior manager, systems & IT. “I think that it has happened more in certain areas of HR [such as payroll] than others,” he adds.

The reason for this limited progress is the fact that the HR department has to handle a number of processes, such as applications for visas, health cards and airport security passes, which are still very paper intensive.

“These things are very transactional, but we have to transact with [unautomated] external entities. We are able to do a reasonable job of automating these processes within our organisation, but we are still struggling when we are dealing with external organisations,” explains Cidambi.

Alongside automating transactional processes, IT is also enabling HR departments to get a better overview of their staff. By computerising staff HR records, managers can quickly identify staff with the skills to form a project team, for instance, as well as those with the characteristics needed to become future leaders within the organisation.

However, to ensure that a system can quickly highlight staff with the ability to fill a vacancy, staff across the company need to be assessed in the same manner. For instance, all employees’ presentation skills need to be marked using the same company-wide criteria to ensure that all staff are judged equally. Then, when a vacancy arises that needs excellent presentation skills, the system will be quickly able to identify staff that meet this requirement. HR will then have a shortlist of possible candidates.

“Of course, there is a human element where we need to interview the person and gauge the individual. Not everything is black and white, but it [an IT system] does help,” says Papadopoulus.

“[A system] won’t make the decision for you it, it can’t and it shouldn’t,” agrees Baker. “All the system is there for is to present the data to enable you make an informed decision, rather than ‘I think’,” he adds.||**||

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