ESS systems evolve to serve virtual offices.

Geographically dispersed organizations force a change in HR delivery.

A workforce doesn't get much more dispersed than Florida's 200,000 state employees.

Most of them work in hundreds of offices across the state. But thousands - including tax collectors and regulatory inspectors

Then there are the telecommuters. No one knows exactly how many exist, but the legislature recently passed a statute that formalizes a telecommuting policy in effect since 1990. The HR problem: How do you serve all these people?

Consider open enrollment. In the past, each state agency had to deliver health insurance benefits packets to workers who were telecommuting or mobile. "It was not unusual for a lot of these employees to come in at the end of the open enrollment period and complain that they didn't hear about it and never got the packets," says Anna Gray, personnel consultant with the Tallahassee-based State of Florida Workforce Program, which administers the workforce. The state has tried electronic enrollment, using the Internet and interactive voice response (IVR), with varying degrees of success, says Gray, but "it's our first foray into that kind of technology and there is no turning back."

Florida now has launched a multiyear project to migrate payroll and master employee data off a mainframe legacy system to an integrated enterprise payroll-HR system from SAP America Inc. of Wayne, Pa. Then the state plans to use IVR, desktop computers, the web and perhaps kiosks to let workers handle many routine transactions themselves.

Gray envisions self-service applications such as time and attendance accounting; access to personnel records and retirement benefits; training; and changes in W-2s, payroll deductions, addresses and marital status. "When we look at the trends in the workforce and what we have to do to stay competitive, this technology is critical to providing services," she says.

A slow but growing trend

Florida illustrates how telecommuters and road warriors are forcing organizations to rethink the delivery of HR services. The increasingly dispersed workforce, the need to offer services to these people and shrinking budgets for HR staff lead many companies to install some form of employee self-service (ESS) using phones, kiosks and computer networks, including the Internet. They also find that improved ESS is one payoff for replacing a legacy payroll and personnel system with an integrated enterprise payroll/HR system with a single master database of employees.

Satellite offices and mobile workers aren't new, but telecommuting is a trend that adds new pressure on HR to offer self-service applications. "Telecommuting is not an overwhelming trend, but there is a shift," says Jac Fitzenz, president of Saratoga Institute of Santa Clara, Calif., which gathers and analyzes human resource data.

Fitz-enz, who is studying 20 large multinational corporations based in the United States and Europe, says 90 percent have or soon will have self-service systems aimed first at giving managers access to employee and recruitment data. To a lesser extent, they also are allowing workers to change records and perform other transactions. "The 20 are offering more than most companies," he notes.

But most companies have been slower to respond. A 1994 survey by Lawson Software Inc. of Minneapolis and the Deloitte Touche consulting firm found that 44 percent of the Fortune 1000 companies polled expected to offer some type of ESS within the next three years. In a comparable survey earlier this year, only 30 percent had implemented ESS.

Ron Hanscome, director of HRMS product marketing for Lawson, a developer of HR and other business applications software, hypothesizes that many companies held off making a decision on ESS while they waited to see how the World Wide Web, launched in 1995, would change the landscape.

The second survey reveals a gap between expectations and reality for ESS adopters. Given a list of several reasons for adopting ESS - things like improving service to employees, reducing cycle time and creating a paperless environment - reality fell short of expectations for every reason. Hanscome points out that the ESS systems would have been implemented before the web, meaning they would mostly be IVR and Windows-based client/server applications. As a result, he hypothesizes the applications weren't easy enough to use, deploy or administer. "It's also possible that the benefits of the technologies were oversold," he admits.

There may be another reason. Ian Turnbull, a systems consultant with CSC Pinnacle Canada in Toronto, believes neither vendors nor end users have come to grips with geographically dispersed organizations. "Electronically depositing a paycheck then mailing the pay slip to the office is great, unless the individual doesn't work in an office," he says. "We need to get more sophisticated with the way we manage people and that makes the demand greater on HR systems."

Some forward-looking HRIS professionals are trying to do that. Two ESS trends surface in interviews with HRIS managers, consultants and other experts. Most companies count on a combination of IVR, the web and, in many cases, call centers, to effectively deliver and support ESS. And few attempt to do so without migrating off legacy systems.

The trouble with legacies

HRIS from enterprise business applications vendors such as SAP, Lawson and others may not be perfect, but they're flexible and more effective for delivering ESS than mainframe and other legacy systems. Because HRISs are more interoperable with various systems, they work well when organizations want to link to outsourced administration of health care, 401 (k) and other benefits.

ESS "wouldn't have been possible on our legacy systems," says Kevin Goldman, technical manager for the HR call center at Texas Instruments Inc. in Dallas. More than 18,000 domestic employees of the semiconductor maker - 45 percent outside Dallas - can use IVR, a web application or the call center for open benefits enrollment, with more ESS on the horizon. "We purchased our legacy, systems but they've been customized so much I don't know that a third-party product could have worked," he says. TI migrated its HR system to PeopleSoft Inc. of Walnut Creek, Calif., which like most enterprise systems has web capabilities. TI uses IVR from Intervoice Inc. of Dallas.

"Legacy systems have to go away because they simply aren't easy to use," says Vince Ceriello, principal with VCR Consulting Group Inc., an HR systems consulting firm in San Anselmo, Calif. They cannot be easily expanded and, in many cases, don't work with other systems. If the government changes the required information on W-2 forms, for example, companies would put a lot of work into changing the legacy payroll system. "It's critical that people wean themselves from the old systems."

Legacy systems don't usually go away overnight. So most HRIS professionals must find halfway measures for delivering ESS during the 18 to 24 months it takes to fully migrate to an enterprise system. "We did benefits enrollments on our legacies," says Shirley Pantelleria, director of the consolidated HR and payroll employee center for Whirlpool Corp. in Benton Harbor, Mich. "It was a nightmare." HRIS staff had to grapple with data mapping, write interfaces to the mainframe and endure slow data feeds.

Whirlpool's ESS for its 23,000 U.S.-based retirees and employees - many of them working from home, in remote locations and on the road - is now entirely PeopleSoft based. Whirlpool uses IVR technology from TALX Corp. of St. Louis.

No solution is best

To attain maximum effectiveness, an ESS solution must offer different delivery, vehicles, with access by phone and desktop computer, at least. In some cases kiosks and touch screens might be appropriate, and many companies are also building call centers that employees can contact as a last resort.

"Right now our employees can use a Touch-Tone phone with IVR or we have touch screen computers in place," says Sandy Weisman, associate deputy assistant secretary for financial systems at the U.S. Department of Veterans Affairs, which, with 2,50,000 employees, is the largest federal agency outside the defense bureaucracy. Eventually, the VA will put it on employees' desktops using the agency's intranet, she says. "What we're trying to do is push transaction processing down to the lowest appropriate level."

Rebecca Stanczak, director of HR-packaged products for IVR vendor Intervoice, sees many companies creating ESS strategies that use phones and computers with a common back end. Products from enterprise applications and IVR vendors increasingly support this. "We see people rushing to give access over the intranet when they may not have even given employees in the field much access to information yet via Touch-Tone phone and voice response," she says.

The fact remains that much of corporate America's workforce does not have computers or access to them. But there still appears to be an intranet in every company's future, she notes.

There are creative ways around this in some settings. The VA will eventually set up at least one computer-equipped "smart room" at each of the agency's 170 hospitals and 50 benefit centers, Weisman says. Another part of the VA strategy - similar to those elsewhere - is a call center to back up both IVR and computer. "We'll keep the call center for people who just can't do it by phone or computer," says Weisman.

Every HRIS professional interviewed for this article says his or her organization's ESS strategy includes both phone and computer access. IVR is limited to numerical data the worker can input from a standard Touch-Tone phone. Adding a lot of alphabetic information gets more difficult. Address changes, for example, are probably ill-advised with IVR.

The VA plans to offer a range of ESS and manager self-service, all backed by a unified PeopleSoft HRIS, using IVR technology from TALX, and the web for desktop access. TALX is building on top of PeopleSoft a system for both IVR and the desktop, which means the VA can "keep our IVR and desktop in synch," Weisman says.

Many IVR vendors do the same. Texas Instruments, for example, is working with Interactive on web-IVR integration. "The Intervoice software has a single set of business rules, so whether it's IVR or the web, it's the same," Goldman says.

Kiosks, the coming thing five years ago before the web came along, still have a place in some ESS strategies. British Petroleum America has about 13,500 U.S. employees - about 7,000 in facilities outside its Cleveland base. Many of those are employed at service stations, where annual turnover is 200 percent, creating all kinds of problems for keeping payroll and personnel information up-to-date. BPA, whose HR system is now PeopleSoft, wants to give managers at local stations direct access for inputting payroll information, says Ken Ward, BPA's manager of employee services. "We have talked about putting kiosks or PCS in each of the service stations," he says.

Security remains a concern

The web might seem like a slam dunk, but among HRIS professionals web security is a very big concern. BPA's Ward is adamant: "It's an obvious avenue for connectivity, but even if there is a one in a million chance that our personnel files will wind up on someone's web site in Hong Kong, we don't want to take it."

Security on the corporate intranet itself, within the fire wall, isn't the main fear. It's the public Internet, which offers mobile workers and telecommuters a route to link with the corporate intranet and any ESS applications on it. But many companies don't want anyone going through the fire wall into their intranets. So they still maintain costly modern banks for direct secure dial-in to corporate networks.

Even a company with a high comfort level for the web is cautious. TI protects its intranet with Secure Sockets Layer 128-bit encryption, the highest level of commercially available security for the pipe through which web sessions and e-mails pass. But TI is not ready to allow mobile workers or telecommuters to access the intranet via the Internet; they still must dial in through the modern bank.

Goldman points out that IVR is not free of security risk, either, and requires use of personal identification numbers (PIN).

While all of these technologies can be costly, the benefits are reduced expenses in the long run. The VA has a clear sense of what the HRIS - ESS through IVR and intranet, and its 350-person call center - is going to save the agency. When it began the project about three years ago it needed 3,500 HR and payroll staff to handle these services, Weisman says. "We'll save, conservatively, 1,100 FTEs," she says, "And one year of their salaries is $40 million." The payback on the estimated $80 million project: three years.

RELATED ARTICLE: Key technologies for ESS

Interactive Voice Response

Advantages: Touch-Tone phones are everywhere and anyone can use them. Most IVR systems can be integrated with intranet-based systems backed by a single payroll/HR database.

Disadvantages: limited to giving and getting certain types of information. The less numeric the information, the less desirable is IVR. Users can be deterred by lengthy phone tree navigation.

Intranet-based systems

Advantages: A web browser is the only requirement to present an array of applications to employees. Especially useful for multistep transactional applications and those that involve a lot of detailed information including text. Applications can also be delivered over kiosks and touch screens. Numeric applications can be integrated with IVR.

Disadvantages: Corporate intranets are still in their fledgling state in many organizations. Even in those with an intranet, not all employees have a computer or access to one. Hardware, whether it is a computer on every desk or kiosks in central locations settings, can be expensive if not already in place.

HRIS systems

Advantages: Integrated payroll-HRIS place all pertinent data in one master database. These systems are more flexible than legacy systems and can scale up to include thousands of users. They link nicely to IVR and intranet ESS.

Disadvantages: Migrating from legacy payroll and HR systems is a major, expensive undertaking that consume a couple of years if done properly and thoroughly. If your company has standardized on an enterprise business applications vendor in other areas, you might find yourself having to use the HR modules from that vendor, even though some other vendor's product might better suit your needs.

Bill Roberts, a freelance writer based in Los Altos, Calif., covers technology, business and management issues.