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Human Resource Information Systems: Backbone Technology of Contemporary Human Resources

A N T H O N Y R. H E N D R I C K S O N

Iowa State University, Ames, IA 50011

I. Introduction

The Human Resource (HR) function of organizations is changing rapidly, reacting to a changing social and organizational environment and rapidly evolving information technologies. Social and organizational changes exert pressure on HR professionals to provide expanded services, of a higher quality, faster, and seamlessly linked with other corporate functions (Pfeffer, 1997). Information technologies (IT), which provide enabling technologies to assist HR professionals in the delivery of services, have also simultaneously increased the expectations that employees, managers, customers, suppliers, and regulators have for the HR function.

While all of Human Resources practice is affected by information technology (see Lengick-Hall et al., this issue), Human Resource Information Systems (HRIS) and HRIS administration comprise a distinct, supporting function within HR. As information technologies have permeated the HR function, some confusion has arisen in the definition of what constitutes an HRIS. HRIS's can be briefly defined as integrated systems used to gather, store, and analyze information regarding an organization's human resources. But, as is the case with any complex organizational information system, an HRIS is not limited to the computer hardware and software applications that comprise the "technical" part of the system; it also includes the people, policies, procedures, and data required to manage the human resources function. Thus, a functional HRIS must create an information system that enables an assimilation of the policies and procedures used to manage the firm's human capital as well as the procedures necessary to operate the computer hardware and software applications.

The Evolution ofHRIS. HRIS has very humble historical origins. Although there were some exceptions, prior to World War II HR professionals (then referred to as "personnel" staff) performed basic employee record keeping as a service function with limited interaction with core business missions. Initial efforts to manage information about personnel were frequently limited to employee names and addresses, and per- haps some employment history, often scribbled on 3x5 note cards (Kavanaugh et al., 1990). Between 1945 and 1960, organizations became more aware of human capital issues and began to develop formal processes for employee selection and development.

J O U R N A L OF L A B O R RESEARCH

Volume XXIV, Number 3 Summer 2003

382 JOURNAL OF LABOR RESEARCH

At the same time, organizations began to recognize the importance of employee morale on the firm's overall effectiveness. While this period of change in the profession did not result in significant changes in HRIS (although employee files did become some- what more complex), it set the stage for an explosion of changes that began in the 1960s (Kavanaugh et al., 1990).

During the next twenty years (1960 to 1980) HR was integrated into the core business mission, and governmental and regulatory reporting requirements for employees also increased significantly. The advent and widespread use of mainframe computers in corporate America corresponded with this regulatory increase and provided a technological solution to the increased analytical and record-keeping requirements imposed by growing regulation of employment and a host of new reporting requirements (e.g., affirmative action, EEO, OSHA, etc.). The Human Resources department became one of the most important users of the exceptionally costly computing systems of the day, often edging out other functional areas for computer access. Although HRIS systems were computerized and grew extensively in size and scope during this period, they remained (for the most part) simple record-keeping systems (Kavanaugh et al., 1990).

Over the last two decades, firms have increasingly relied on the HR function to provide management solutions that increase the effectiveness of human capital. Addi- tionally, the regulatory requirements and competitive pressures to effectively manage human assets are no longer limited to large firms with mainframe computing systems. Fortunately, as smaller and mid-size firms have come to rely on more complex HR practices, personal computers have made modern HRIS systems affordable and available (Kavanaugh et al., 1990). Regardless of firm size, HRIS systems have evolved into complex tools designed not only to manage a rich variety of information about the firm's human capital, but to also provide analytical tools to assist in decision making about the management of those assets.

II. HRIS Functions

Multiple Stakeholders. Contemporary HRIS is (at its best) an organizational bound- ary spanner that must meet the needs of a number of organizational stakeholders. Typ- ically, the people in the firm who interact with the HRIS can be segmented into three categories: (1) HR professionals; (2) managers in functional areas (e.g., production, marketing, engineering, etc.); and (3) employees themselves (Anderson, 1997).

HR professionals rely on the HR1S to fulfill their job functions in the areas of regulatory reporting and compliance, compensation analysis, payroll, pension, and profit- sharing administration, skill development and skill inventory, benefits administration, etc. As the complexity of these analyses and tasks increases, the need for more powerful computing capabilities increases commensurately. Thus, for the HR professional there is an increasing reliance on the HRIS to fulfill even the most elementary job tasks.

As human capital plays a larger role in competitive advantage, functional managers expect the HRIS to provide functionality to meet their unit's goals and objec- tives. Managers rely on the HRIS's capabilities to provide superior data collection

ANTHONY R. HENDRICKSON 383

and analysis, particularly for performance appraisals and performance management, skills testing, assessment, and development, resume processing, recruiting and reten- tion, team and project management, and management development (Fein, 2001). As managers contemplate future performance, there is added emphasis on web-enabled training, career development, training, and skills-management functions available from the firm's HRIS.

Finally, the individual employees become end-users of many HRIS applications. The increased complexity of employee benefit options and the corresponding need to monitor and modify category selections more frequently has increased the awareness of HRIS functionality among employees. Web-based access and self-service options have simplified the modification process and enhanced the usability of many benefit options and administration alternatives for most employees.

Integrating the Technologies of HR. Clearly, developments in Information Tech- nology have dramatically affected traditional HR functions in recent years, with nearly every HR function (i.e., compensation, staffing, training, etc.) experiencing some sort of reengineering of its processes due to developments in information technology. This process of change has created significant challenges for HR professionals who must quickly get up to speed in the latest information technologies and simultaneously trans- form traditional processes into on-line processes. Few other disciplines have faced such widespread change in such a short time.

The extent of IT penetration into the HR function can be seen in the listing of applications in Figure 1 (available from the Commerce Center at <www.workforce.com>). Each application area has a number of companies that provide software solutions to assist in these traditional HR processes. The 33 functions listed offer links to 480 sep- arate solutions for these application areas. Clearly, an explosion has occurred in both the availability as well as the specificity of IT solutions for HR.

Most of the activities shown in Figure 1 existed in some form within the organization without any electronic information technology. However, the technology has been used to change the traditional processes, either through increasing their efficiency or their capability (in the sense of greater functionality). Additionally, there are some new processes that only exist because there are now technologies that enable them. Fig- ure 2 briefly summarizes the ways that information technology affects different functional activities.

�9 Increased Efficiency. Processes that have experienced increased efficiency are similar to other business processes in which rapid computing technology has allowed for more transactions to occur with fewer fixed resources. Examples of processes that would be typical in this category would be payroll, flexible benefits administration, and health benefits processing. Even the rudimentary technologies of early mainframes provided significant efficiencies in these areas, since most of what they required was powerful record processing (and relatively few analytics). What has changed in more recent years, is that the record processing efficiencies that were once available only to large firms are now readily available to any size organization (Ulrich, 2001).


Figure 1

Workforce .com - - Commerce Center: Sof tware Directories

360 Degree Assessment (14 companies)

ADA Compliance (2 companies)

Applicant Tracking (36 companies)

Benefits Administration (17 companies)

Career Development (7 companies)

COBRA Compliance (1 companies)

Compensation Administration (7 companies)

Compliance Tracking/Reporting (9 companies)

Consulting Services (13 companies)

EEO Compliance (5 companies)

Employee Opinion Survey (ll companies)

Employee Recruitment (21 companies)

Employee Scheduling (13 companies)

Employee Self-service (20 companies)

Employment Screening (5 companies)

Flex Benefit Administration (1 company) Health Claims Administration (3 companies)

HRMS/HRIS (71 companies)

Intranet/Internet-enabled (40 companies)

Management Development (6 companies)

Organizational Development (12 companies)

Payroll Systems (25 companies)

Pension/Profit Sharing Administration (3 companies)

Performance Appraisals & Mgmt (12 companies)

Reference Sources (2 companies)

Resume Processing and Tracking (14 companies)

Skills Testing (5 companies)

Succession Planning (6 companies)

Teams/Project Management (6 companies)

Testing and Assessment (17 companies)

Time and Attendance Management (49 companies)

Training/Skills Mgmt (19 companies)

Web-enabled Training (8 companies)

�9 Increased Effectiveness. In many processes the introduction of computer technology is designed to improve effectiveness, either in terms of the accuracy of the information or by using the technology to simplify the process. This is especially true when large data sets require reconciliation. Onerous manual reconciliation processes can be executed faster (an efficiency consideration), but also with near perfect accuracy using automated systems. Examples in this area overlap many of those for which efficiency gains were noted, but also including pension and profit-sharing applications, benefits administration, and employee scheduling activities. Using computer technology in these processes helps to ensure accurate results and offers substantial simplification and time- liness over manual processing.

The vast majority of HR functions have had some degree of automation applied in order to gain both efficiency and effectiveness. Information technology has historically offered an opportunity to "have your cake and eat it too" in terms of providing users with increased accuracy and simplification of process steps, while simultaneously providing these benefits in a faster and less costly environment. As with most business processes, IT in the broad functional areas of HR such as work force planning, job and employee administration, recruitment, training and career development, compensation and benefits, and performance management offers significant gains in capability and functionality while simultaneously reducing costs and turnaround time.


Figure 2

Impact o f i T on Traditional HRProcesses

Increased Efficiency �9 Increased transactions without increased resources

�9 Increased t imeliness due to processing power

Increased Effectiveness �9 Increased performance (accuracy, precision, completeness, etc.)

�9 Simplification of process due to the use of technology

IT Enabled �9 Available ONLY via IT applications, i.e., Computer-based training,

on-line recruitment, etc.

�9 Self-Service HR

�9 IT-Enabled Processes. While many of the application areas' gains are through increased effectiveness and efficiency over manual processing, some are only possible using contemporary information technologies. Most notably, computer-based (web- based) training is a growing area of HR practice that was not available until computer software was created. Even computer-based training was not as practical for today's geographically dispersed organizations until the training was upgraded from computer- based to web-accessible training. By taking traditional computer-based training programs and making them accessible on the Internet, firms have created a powerful tool to upgrade and assess employee skill sets.

Many other traditional HR functions have evolved IT-dependent components with the advent of the Internet and ubiquitous desk-top computing. On-line recruitment cen- ters, along with the ability to conduct virtual interviews, background checks, and personnel tests on-line have dramatically changed those processes, increasing the geographic reach of firms for potential employees. This increased reach not only extends the potential employee base, but also enhances access to minority candidate pools, offering firms significant assistance in meeting diversity goals.

III. HRIS and Firm Size

Not all HRIS are created equal, nor do they need to be. Different size firms in differ- ing operational contexts require HRIS that meet their specific needs and remain cost- effective. Although a 25-employee firm can install a major HRIS, such as PeopleSoft, such an enormous expense would be difficult to justify. Likewise, a large multi-national could probably make a database program such as Access perform the functions necessary to operate, but it would be a cumbersome and extremely limited solution. Effec- tive HRIS requires a balance between technical potential and the critical information needs of the HR function. Figure 3 provides a taxonomy of the different functional requirements of three different sizes of firms. Although there are exceptions to this breakdown, it provides a general sense of the ascending order of complexity of HRIS as firm size and complexity increase.


Small-Firm HRIS. Sm al l e r f i rms typ ica l ly use gener ic so f tware app l i ca t ions such

as Mic roso f t Exce l and Mic roso f t Access to c rea te speci f ic app l i ca t ions to address func-

t iona l r equ i r emen t s . Of ten these so lu t ions are s t a n d - a l o n e wi th l imi ted or no in tegra-

t ion in to a l a rger H R I S or o t h e r o r g a n i z a t i o n a l m a n a g e m e n t s y s t e m s . B e c a u s e the

sys tems are s tand-a lone , they can be created rapidly and requi re l imi ted input f rom users;

fu r the rmore , w h e n mod i f i ca t ions are requi red , the s y s t ems can be c h a n g e d wi th l i t t le

or n o i m p a c t on o the r sys tems in the o rgan iza t ion . F r o m a cos t -e f fec t iveness s t andpoin t ,

these sp readshee t and da t abase p r o g r a m s are f r equen t ly b u n d l e d w i th off ice p roduc t iv -

ity sui tes that f i rms have a l ready purchased , thus no add i t iona l so f tware cos t is incurred .

Addi t iona l ly , the ease o f p r o g r a m m i n g , coup l ed wi th the fami l i a r i ty o f these p rog rams ,

enab l e s H R p e r s o n n e l to c rea te app l i ca t ions tha t m e e t t he i r spec i f ic needs (e.g., b e n e -

fits e n r o l l m e n t lists, payrol l profiles, etc.). W h i l e the s t and-a lone na ture o f these sys t ems

a l lows t h e m to be bui l t and mod i f i ed r a the r easily, the nega t ive aspec t o f these appl i -

ca t ions is the i r l ack o f shared data wi th o the r H R or o rgan i za t i ona l sys tems . Da t a are

o f ten dup l i ca t ed a m o n g d i f fe ren t func t iona l a reas (e.g., c o m p e n s a t i o n and bene f i t s spe-

F i g u r e 3

HRIS Capabilities

HR Professionals Firm Managers Employees

Small �9 Benefits Admin �9 Team/Project Mgmt Organizations �9 Payroll �9 Time/Attendance

�9 Employee Scheduling �9 Succession Planning

�9 Training/Skills Mgmt

Mid-Size Organizations

�9 COBRA �9 Benefits Admin �9 Compensation Admin �9 Compliance Tracking

and Reporting �9 Health Claims Admin �9 Payroll

�9 Performance Appraisals �9 Skills Testing �9 Team/Project Mgmt �9 Time/Attendance �9 Employee Scheduling �9 Succession Planning

�9 Career Development �9 Training/Skills Mgmt �9 Web-Enabled Training �9 Flexible Benefits �9 Employee Self-Service

Large Organizations

�9 ADA Compliance �9 EEO Compliance �9 COBRA �9 Benefits Admin �9 Compensation Admin �9 Compliance Tracking

and Reporting �9 Health Claims Admin �9 Payroll �9 Employee Screening �9 Resume Processing

and Tracking

�9 Performance Appraisals �9 Skills Testing �9 Team/Project Mgmt �9 Time/Attendance �9 Employee Scheduling �9 Succession Planning

�9 Career Development �9 Training/Skills Mgmt �9 Web-Enabled Training �9 Flexible Benefits �9 Employee Self-Service


cialists might each be reproducing similar data within their independent systems), which, in addition to being inefficient, introduces opportunities for data integrity problems across the multiple applications. However, the relatively small amounts of data stored and processed by smaller firms tend to minimize the inefficiencies of these applications, making them an attractive HRIS solution for smaller firms.

Mid-Size HRIS. In mid-size firms the inefficiencies of data duplication and reconciliation become problematic due to the increased volume of data. Additionally, mid- size organizations cross regulatory thresholds for compliance reporting and typically require functionality unavailable or impractical from stand-alone PC applications. Spe- cialized mid-range applications such as ABRA provide these firms with more data integration and increased HR functionality. Additionally, these systems provide more sophisticated backup and recovery capabilities to ensure data integrity in the event of catastrophic system failure.

These mid-range systems are considerably more complex to install, typically requiring a local area network (LAN) and a server-based operating system that allows multiple users to run multiple applications simultaneously. In addition to the more complex technical infrastructure required to run mid-range applications, they also require considerably more specialized training for personnel charged with developing and using the systems. Frequently, the costs associated with the installation of these systems will also include a considerable expenditure for an outside consulting firm to develop and install the application, and to train staff to use it.

In exchange for this greater cost and complexity, mid-range HRIS products provide a significant improvement over stand-alone applications. Because all (or at least most) HRIS functions flow through the single system, data redundancies and data incongruities can be identified and eliminated, making a more accurate and efficient HRIS. This capability alone can justify the cost of these systems for mid-size firms, as it significantly reduces the time spent on both data entry and data analysis (gener- ating analytical reports from an integrated, single-source system is considerably more accurate than compiling and then analyzing data from multiple stand-alone systems).

Firms that utilize mid-range systems generally require significantly more computing capacity than small firms, yet are not large enough to realize economy-of-scale benefits that larger firms enjoy. To address this problem, mid-range system vendors attempt to maintain cost efficiencies by creating systems that provide predetermined, integrated functionality. System costs are usually limited by creating built-in functionality, but with restricted flexibility, and vendors typically incorporate standard- ized networking protocols and database functionality into the system. Firms gain the functionality but are limited to the options provided by the hardware vendors.

Mid-range software packages are also characterized by their built-in functionality for very specific HR processes and analytical needs; mid-range systems support flows analyses, benefit usage tracking, etc., making advanced HR practices more accessible to users.


Large-Size HRIS. Large firms share many of the demands for functionality that mid-size firms possess. Similar to mid-size firms, large firms require compensation and payroll applications, benefits administration, health care claims administration, and a variety of compliance, reporting, and tracking functionality of the traditional HR processes.

In addition to the functional requirements shared with mid-size firms, compliance thresholds and tracking systems are of even greater importance in larger firms. Large size creates higher levels of public attention and higher potential for legal repercus- sions from a finn's failure to adhere to legislative requirements. Additionally, this same public presence can often make the organization a more likely target for civil com- plaints when a disagreeable personnel matter occurs. This heightened public profile requires large firms to be extremely vigilant in the implementation and operation of systems designed to assure procedural compliance throughout the organization. Thus, the compliance-tracking and process-assurance functionality is paramount in large organizations, especially in the area of ADA and EEO compliance.

Because large firms attract a tremendous number of unsolicited r6sum6s, sophisticated software is often needed to track applications. EEO requirements are typically interpreted such that unsolicited r6sum6s are considered applicants; failure to assure that each document received is provided due diligence in the evaluation process of job candidates can create detrimental consequences. The sheer volume of documents, especially those not solicited, can make this activity a monumental task without an automated system to support the process.

An additional function that can aid applicant tracking is an automated employee- screening system. Many large firms have found that instead of attempting to manage unsolicited r6sum6s as a background function, it is better to create a highly visible, electronic presence to welcome all applicants regardless of whether they are respond- ing to a formal job announcement or not. Once the applicant capture is assured, the firm can automatically segment and classify the applicants based on a variety of skill sets and job requirements.

One major functionality difference faced by large firms is the challenge to integrate the HRIS system with enterprise-wide software applications, such as Enterprise Resource Planning (ERP) systems. ERP systems are designed to simultaneously link a firm's entire software application environment into a single "enterprise" solution. Thus an ERP integrates data and information from financial, operations, sales and order- processing, human resources, supply-chain, and distribution applications to provide a single, shared view of the business and its processes. A shared database provides each application with common data which reduces the need to constantly reconcile information compiled from independent databases and software applications.

The promise of ERP is to deliver seamless integration of disparate organizational processes under the control and coordination of a single, user-friendly system (Walker, 2001). Most ERP systems have evolved into integrated packages by adding functionality to some more limited base system that was already in existence. For example, one vendor, JD Edwards, originally had an integrated financial processes application. The


firm augmented this base financial package with additional functionality, moving it from a relatively simple financial application into a highly integrated package that supports nearly every aspect of the enterprise. Naturally, ERP solutions that originate in a particular application area tend to have superior functionality and capability in their "home" application in comparison to competing ERP solutions.

Of the major ERP vendors, one of the most interesting is PeopleSoft. Similar to many other large ERP providers, PeopleSoft had a base application which has evolved into a complete enterprise package. The firm has added functionality such that its current package seamlessly links all application functions to a common database and supports "enterprise" decision making by facilitating the integration of a variety of organizational perspectives.

Because PeopleSoft's functionality originated in HRIS, their suite of HR functions is extremely robust. The system supports access to all employees, whether manager, employee, or HR professional, via a sophisticated intranet portal. HR professionals can access the standard functions of payroll, compensation and benefits administration, health claims administration, employee screening, and applicant tracking, as well as various compliance and reporting features. The system gives managers the ability to schedule employees, review time and attendance data, offer and review skills tests, and manage performance appraisals. Simultaneously, employees can use the self-service, web-portal interface to undertake training courses, manage their flexible-benefits programs, assess and manage their skills inventories, and manage their career development. Finally, the integration of these key asset processes with other enterprise functions, provides the large firm with a unique ability to maintain its agility and competitive stance in relation to both large and smaller firms in the marketplace.

Clearly, though, this increased functionality comes at a significantly increased price, both in terms of time-to-deployment, as well as in software, hardware, and development costs. ERP level systems require an organization-wide development effort that invariably involves hundreds of thousands (if not millions) of dollars of expenditures. While the expense and difficulty of these large systems seems daunting, very large firms make the investment with the understanding that it will save money and increase revenues in the long run.

IV. Future Directions

Information technology will continue to have a significant impact on HR applications in all organizations; the continued increase in computing power at lower cost thresholds will provide smaller firms with more computing capacity per dollar, thus facilitating their migration to more integrated and sophisticated software packages. Mid-size firms will gain much of the functionality which today is limited only to very large firms with mainframe computing systems. The move to scalable, client-server architectures will allow software vendors to offer functionality, which today is available only on large systems, to medium-size firms with mid-range computing systems and smaller client- server configurations.


Firms will also continue to change the process of HRIS development; historically, finns have either developed application software in-house or purchased functionality from software vendors. When modifications and upgrades were required, the finn could perform the upgrades or contract for enhanced functionality from the software vendor. Following a new business model for software delivery, application service providers (ASPs) offer firms the ability to purchase functionality without taking title to the software application or even hosting the application on the firm's computing platform. Under the ASP model, firms pay a fee to "lease" the functionality on a flat-fee or per-access basis. The software vendor not only creates the application, but hosts the software on the vendor's own computing platform. Application upgrades can be made independent of the client firm's computing architecture. This model is becoming very popular not only in large organizations, but the economies of scale will allow small and mid-size firms access to sophisticated functionality at competitive pricing. For HRIS users, this means access to continually improving technological capability, as well as systems that are fully up to date with regard to governmental reporting requirements.

Finally, the use of portal technology will affect HRIS delivery. Portals allow organizations to customize the end-user interface across the organization's various units. The concept is to unify application access into a commonly understood webpage interface and allow application functionality to be delivered to employee desktops in an indi- vidualized format. This enhances productivity and effectiveness because each user can create unique "portals" or views to software applications which specifically fit his or her job responsibilities and interface preferences (Walker, 2001). Portal technology coupled with ASP technology offers a powerful shift in computing that should offer more sophisticated applications being made available to more firms at lower costs.

Knowledge Management As an HR Function. Knowledge Management (KM) is the process of formally documenting the information maintained by organization units (business groups or individual employees) and making that information readily available to the rest of the organization. The KM process includes creation of processes and procedures for sharing knowledge as well as knowledge repositories and communication networks to facilitate the transfer of knowledge within the organization or between organizations (Borbely and Gould, 2001; Hansen et al., 1999).

As organizations have become larger and more complex, it has become impossi- ble for co-workers to know where to turn for knowledge in the organization. Numer- ous studies point to the duplication of solutions due to a lack of coordination of organizational knowledge (Davenport and Prusak, 1997; O'Dell and Grayson, 1998). This problem is exacerbated when firms enter synergistic collaborations with other firms to deliver complex solutions to the ultimate consumer; coordinating the new knowledge base represented by the collaboration continues to resemble alchemy more than science.

Unfortunately, KM does not currently have a functional "host" in organizations, i.e., there is no functional area (e.g., marketing, accounting, fnance, etc.) that consis- tently provides leadership and development in KM systems. Because KM systems are


predicated on a thorough understanding of employee capabilities and employee development, developing and managing KM systems seem to be natural extensions of current HRIS and HR developmental activities (Borbely and Gould, 2001).

HR As a Communication Facilitator. In large organizations, HR can play a larger role as a facilitator of communication between the organization's disparate segments. O'Dell and Grayson (1998) underscore that a problem in many firms is not that solutions to problems are not complete, but that the sheer size of the organization, coupled with dysfunctional political agendas, prevents potential solutions from being communicated to those experiencing the problem. HR is particularly well equipped to help bridge this communication gap.

Creating effective communication requires that the facilitator have visibility in all aspects of the organization's operations, so only a few organizational entities can accomplish this role. Naturally, executives have broad visibility, but generally lack the time to develop better communication systems. In most firms only the accounting, information systems, and HR functions have the necessary visibility; of these three, HR seems the most likely facilitator, because the facilitation is often interfacing the human assets which HR already manages.

Additionally, HR is generally more objective with regard to the organization's operations. HR policies and decisions seldom directly affect the contentious operational issues. This objectivity allows HR the ability to function as a "disinterested third party" with respect to many operational issues. To successfully facilitate communication, other organizational entities must view the facilitator as an objective inter- mediary, otherwise the communication will be tainted as potentially fulfilling the facilitator's political agenda.

Self-Service HR. Firms have developed a proverbial smorgasbord of HR applications designed to encourage individual employees to manage their personal HR profiles with respect to a variety of functions, such as benefit and retirement-plan monitoring, computerized training, in addition to using HRIS-based systems to fill out myriad personnel forms (Adamson and Zampetti, 2001; Zampetti and Adamson, 2001). For example, in a traditional HR system an employee who desires to alter his or her investment portfolio in the employer's 401 k program must send a written notice to the plan administrator indicating the change requested. The plan administrator would then need to verify the employee's identity and status and ensure that the requested transaction was within the program's parameters. Naturally, this transaction must occur during designated work hours for the plan administrator, and some type of confirmation document or communication would be required from the plan administrator to verify the change.

With a self-service application the employee signs on to the system, a procedure that authenticates and verifies the employee immediately. Typically most self-service applications are accessed via the Internet with availability 7x24 (seven days a week, 24 hours a day), thus the plan administrator's availability is irrelevant. Change options are offered to the employee based on the program's parameters, so only valid alterations


are possible (Zampetti and Adamson, 2001). The employee simply chooses the desired change and confirms the transaction. A confirmation e-mail message generally verifies the change. The entire process could be accomplished without any interaction with company personnel. Thus, the savings in terms of turnaround time, personnel and administrative costs, and reduced error potential for the firm are significant.

Many of these self-service applications are provided by third parties instead of the firms themselves. Here, the ASP and portal models can effectively provide this self- service for two major reasons. First, the client firm (the employer) need not take time and financial resources to develop the application since the ASP already has made both investments (the application is turn-key and ready immediately). Second, as changes to the business environment occur (e.g., a tax law change), the ASP is responsibile for keeping the application current. The client firm pays the ASP a fee (typically based on the number of transactions) for this service. Thus, the client firm is freed from regulatory compliance to concentrate on the organization's core competency and business model (Keebler, 2001). In the previous example of an employer's 401k plan, the plan provider (e.g., Principal Financial Group) would likely be the employer's ASP.

V. Conclusions

Although the HR function was an early adopter of computing technology, the profession spent the last decade playing catch-up to other business functions in terms of successfully integrating advanced information technology into their processes. As has been the case with many early adopters, HRIS (and the HR function) was constrained by the inertia of expensive (but limited) legacy investments. As is apparent from the previous discussion, the HR function is quickly closing the gap in terms of applying contemporary IT capabilities to traditional HR functions.

The evolving business environment and the realization of omnipresent change will significantly affect the HR function and will provide a backdrop for increased pressure on the firm's HR function. Centralized organizations will give way to locally run networks as decision making is pushed to lower levels. Business processes will dic- tate how systems are created and will drive the functionality rather than the converse. Mobility and geographic dispersion will force systems to be more democratic and vol- untary. Data will become increasingly strategic, and access to HR data will need to be universal and seamless. Finally, and most importantly, people have become the firm's core resource, so organizations must become people-centric (Pritchett, 2000).

The emphasis on knowledge and human capital will create additional pressures on the HR function. As custodians of the organization's human capital, the HR function may become integrated and immersed in the design and acquisition of knowledge management systems, systems that have a primary goal of cataloging and maintain- ing ready access to the organization's own knowledge (Ulrich, 1997). This appears particularly realistic when one considers how much of the organization's knowledge is maintained in the collective memory of the firm's employees. The challenge for HR professionals will be to integrate the traditional HR functions of the organiza-


t ion s e a m l e s s l y w i t h k n o w l e d g e m a n a g e m e n t t ha t s to res the k n o w l e d g e o f i n d i v i d -

ual e m p l o y e e s .

T h e i m p o r t a n c e o f this task, n o w and in the future , was u n d e r s c o r e d by m a n a g e -

m e n t guru Pe t e r D r u c k e r in his 1994 b o o k , Post Capi ta l i s t Society, w h e n h e sa id

" K n o w l e d g e is no t s imply a n o t h e r r e sou rce a long w i t h the t r ad i t iona l fac to rs o f pro-

duc t ion such as labor, capi tal , and land; it is the on ly m e a n i n g f u l r e sou rce today." A s

keeper s o f the k n o w l e d g e con ta ine r s ( e m p l o y e e s ) , H R p r o f e s s i o n a l s face s o m e exci t -

ing c h a l l e n g e s in s u p p o r t i n g t o m o r r o w ' s b u s i n e s s o r g a n i z a t i o n s and e f f ec t ive H R I S

wil l p lay a s ign i f i can t role in the i r success .

R E F E R E N C E S

Adamson, Lynn and Robert Zampetti. "Web-Based Manager Self-Service: Adding Value to the Work in Web- Based Human Resources." In Alfred J. Walker, ed. Web-Based Human Resources. New York: McGraw- Hill, 2001, pp. 24-35.

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