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Maximizing Returns on Employee Relationships: Four Steps to Increase the Productivity of Your Workforce

by Anke Doerzapf | SAPinsider

January 1, 2003

by Anke Doerzapf, SAP Labs, and Steffen Udolph, SAP Labs SAPinsider - 2003 (Volume 4), January (Issue 1)

To consistently outperform the competition in today’s economy, companies must find ways to make the most of their existing assets. One key asset — a company’s own employees — is often overlooked. But when a workforce is equipped with the tools to take timely, informed, and appropriate actions, they can push a business to the head of the pack, with results you can see in the bottom line. With business resources and communication channels at their fingertips, workers are more productive, more aligned with corporate goals, and more satisfied with their jobs — even at a time when they are being called upon to do more.

As companies rely on fewer employees and increased productivity to remain competitive, enterprises are looking to a well-defined, integrated set of initiatives to better support their workforce and measure their investments in employees. It’s no wonder then that many companies are seeking to implement an Employee Relationship Management (ERM) strategy.

Did You Know...
With nearly 9 million users of Employee Self-Service alone, SAP is the market leader in the ERM solution space.

The Need for an ERM Strategy

ERM is a management strategy that provides a comprehensive set of services to employees to optimize their work and relationships.1

 An effective ERM strategy drives employee productivity by:

  • Enhancing the employee’s view of the entire enterprise
  • Adding collaboration, process automation, and monitoring for continuous business improvement
  • Leveraging existing assets and aligning people, information, and business processes across the enterprise

For example, if your organization has implemented any employee self-services — where employees can change their address in company records, enroll for benefits, or submit travel requests online — then you’ve taken a first step toward an overall ERM strategy. These self-services have been implemented by HR departments in recent years as a way to achieve cost reductions. To make these services even more accessible, many companies have also implemented Human Resource portals, resulting in considerable cost savings and dramatic ROI (see Figure 1). Independent studies like those from Cedar and Towers Perrin2 show savings achieved in part through increased data accuracy, better timeliness, and improved employee satisfaction, as well as a reduction in HR workload.

Self-Service/Portal Results at a Glance
Benefits 2001 North America
Average Cost Per Transaction 60% average reduction
Cycle Time 60% average reduction
Return on Investment 100% in <22 months
Employee Satisfaction Up to 50% increase
Inquiries to Service Center Up to 90% reduction
Source: Cedar, “2001 Human Resources Self-Service/Portal Survey”
Figure 1 Results form Cedar 2001 Human Resources Self-Service/Portal Survey

While these substantial cost savings are enough to make any company take notice, smart companies are not stopping there. They are looking at administrative self-services as just one part of a broader, more holistic ERM strategy that taps into a potential that goes beyond such low-hanging fruit. After all, a company invests a significant amount of money, effort, and time in hiring, training, compensating, and motivating employees, but this only makes sense if employees return the investment by providing a substantial contribution to the organization. Aligning employees and management with corporate-wide strategies, improving employee retention and motivation, sharing employee knowledge, and tracking the company’s investment in their workforce — an ERM strategy helps companies make all of this happen. (For a fuller list of benefits, see “Key Drivers for ERM.”)

This article takes you through four basic steps to implementing an ERM strategy that maximizes your employee productivity. It also points you to the SAP applications, technology, and services that can help support this strategy today, as well as the SAP initiatives on the horizon. Happily, SAP customers will find that many of the functions that support an ERM strategy are already in place in their current SAP system landscape.

Key Drivers for ERM

Goals for an ERM strategy include:

  • Aligning the individual employee and manager with corporate objectives and strategy.

  • Increasing efficiency by automating paper-based processes that touch large numbers of users.

  • Managing the company’s most valuable assets, its people, so that they contribute optimally to the bottom line (productivity).

  • Motivating and retaining valuable employees.

  • Integrating employees throughout the value network into the company’s end-to-end business processes.

  • Making knowledge that resides mostly within employees more accessible, thus providing the company with a competitive advantage.

Developing an ERM Strategy

Step 1: Define Your Company’s Employee Relationship Investments and Goals
As a first step, a company — typically with input from executive, management, and HR-team levels — sets out to identify “employee relationships” and its desired investment in those relationships. It then creates an action plan for ERM initiatives to be implemented in various areas of the company.

In an ERM context, the term “employee relationships” goes well beyond employee interactions with managers and colleagues. It also addresses their relationships with all the tangible and intangible assets of an organization — products, knowledge, brand, customers, and suppliers. In this article, we will focus primarily on the four HR-related interaction and service areas listed in Figure 2. 3

Relationship Key Considerations Examples

Manager to Employee (M2E)


  • Alignment/MBO
  • Training
  • Employee Placement
  • Performance
  • Employee Development
  • Approvals
Managers need to make sure that their staff is aligned with corporate objectives. Together employees and managers define their short- and long-term objectives, discuss employees’ actual performance and development goals, and identify training needs. Managers approve or reject leave and travel requests, travel expenses, and purchase requisitions submitted by employees.
Business to Employee (B2E)
  • Administrative Tasks
  • Internal Corporate Communications
  • Employee Guidelines and Policies
  • Training
Each employee interacts with different departments within the company, including the human resources department, financials, and IT. Questions get answered, requisitions are submitted, and administrative tasks are taken care of. Companies or individual departments also need to communicate news, guidelines, and policies to the workforce and roll out online training for new products or procedures.

Employee to Employee (E2E)


  • Collaboration
  • Team Projects
  • Information Sharing
Employees interact with their peers to exchange information and aggregate knowledge. They work collaboratively on projects or in teams and share information to achieve common goals. Employees participate in discussion forums and share experiences on both work-related subjects and on more private issues (recommendations for dentists, etc.).
External to Employee (X2E)
  • External Resources
  • General Information
Employees interact with external institutions, including partner companies, health plan providers, government agencies, and general information portals (such as Yahoo!).
Figure 2 Four Categories of Employee Relationships

In this strategy-setting phase, a company defines the extent of its investment in each of the four employee relationship categories and determines the desired result, aligned with company strategy and goals. Considerations include the company’s overall business goals and direction, contractual and legal requirements (i.e., employee contracts or applicable employment regulations), and employee and manager goals — all in the interest of finding the optimal balance between investment in the employee and the value provided by the employee to the organization.

Step 2: Assess and Implement Technology to Support ERM
After defining the details of employee interactions and the extent of the investment in an ERM strategy, the company enlists its IT professionals plus experts from their respective areas (such as HR) to identify the services and technology that enable participation in collaborative relationships and business processes.

Not all aspects of an ERM strategy are equally important, and not all will be implemented in the initial phase. By prioritizing the building blocks based on short-term objectives and a long-term ERM strategy, you can more clearly define your technology and application requirements.

In addition to exploring new technology, be sure to assess the state of existing services. The systems in place should be investigated with an eye toward reusing existing tools and technology wherever applicable.

Components that enable an ERM strategy may include:

Self-services to provide immediate access to policies, applications, and forms (see Figure 3).

Figure 3 Example of a Personalized Training Page

Collaboration and communication tools, such as email, calendar, chat rooms, team rooms, and application sharing to help promote better exchange of information and knowledge.

Knowledge management for managing and leveraging the company’s intellectual assets. Key capabilities include the distribution of internal (e.g., business and competitive intelligence) and external information, particularly through sophisticated search and classification concepts, as well as publish and subscribe mechanisms.

Personalization to meet and facilitate individual preferences and needs, and ensure relevance of the provided services and information for the individual employee.

Access technology including portals as well as other resources:

  • Enterprise portals are the platform to deliver the tools and services employees need in their different roles within the company. With the portal, employees ideally can access collaboration and knowledge management tools, subscribe to internal and external newsletters, and get role-based information pushed to them. A sophisticated employee portal allows for personalization, so that services, tools, and information can be populated into the portal and arranged according to individual preferences. Through the portal, employees can also access all enterprise applications related to their roles (for instance, a sales representative will have access to order-entry systems).

  • Employee Interaction Centers, such as HR hotlines or IT helpdesks, can be provided in addition to a portal or for employees without online access.

For more on how SAP provides these services and technology, see the section “SAP Employee Productivity Suite — How SAP Delivers on Your ERM Needs.”

Step 3: Introduce and Support Evolving ERM Services in the Workforce
Once the technology is in place, ERM services can be delivered to the entire workforce. Often the first priority is streamlining paper-based processes by introducing self-services and portals to the workforce. By automating administrative processes, the HR department will see almost immediate benefits and can shift its focus away from data-keeper and administrative roles. However, as your ERM strategy is introduced in the workforce and there is widespread use by employees, you can begin looking to services that go beyond the streamlining of administrative tasks.

For example, both employees and managers can impact the bottom line when services become more than just administrative:

  • For employees to perform their daily work most efficiently, they need access to information, services, and transactions that support value-added relationships throughout the company and the employee life cycle at all stages. Employee self-services — such as change of address and travel request — offer administrative support. To complete the offering, value-added employee self-services that support employees in business processes can go further, and help them plan their careers, participate in performance reviews, and perform information searches.

  • Managers require access to specific administrative and strategic services that help them manage their employees and business areas, and make proactive decisions based on up-to-date data. ERM services can help them access the information they need. For example, managers can align their employees with corporate goals by deriving objectives for individual employees and tracking the employees’ achievements.

With these broader changes, the HR department can also shift its focus from administration and into a more strategic role in Human Capital Management for the business.4

Step 4: Measuring and Optimizing Your ERM Strategy
With key performance indicators in place, you can identify where your ERM strategy has been successful, and whether initiatives have led to the desired results.

For example, your company may notice fluctuation in the performance of experienced workers in specific departments. Through surveys and interviews, you discover that these employees are dissatisfied with the career opportunities in their jobs. The HR department then defines an initiative and introduces a new career model that gives workers the ability to grow in their existing jobs. In order to determine if they have strengthened the relationship between the company and the employees, HR will monitor the fluctuation, and could conduct biweekly surveys with samples of these employees to track employee satisfaction.

SAP Employee Productivity Suite — How SAP Delivers on Your ERM Needs

A successful ERM strategy is not a one-size-fits-all endeavor. It must reflect your enterprise’s own industry, culture, leadership styles, and emerging workplace needs. This also requires that ERM applications provide sufficient flexibility and openness, and a modular architecture to support the goals of your specific ERM strategy.

SAP delivers applications, technology, and services to support a company’s particular ERM strategy. The SAP Employee Productivity Suite is a portfolio of solutions geared toward maximizing the productivity of your workforce. The following functionality is available today:

  • Employee Self-Services
  • Manager Self-Services
  • SAP Learning Solution
  • Expert Finder
  • Employee Directory/Organizational Charts
  • Performance Management and Management by Objectives
  • Life and Work Events
  • Project Management
  • Time and Attendance Management
  • SAP e-Recruiting
  • Travel and Expense Management

SAP also offers Business Intelligence and Knowledge Management Solutions. What’s more, with the mySAP Enterprise Portal, SAP provides a state-of-the-art frontend with a fully integrated, extensive backend (supporting mySAP HR, mySAP CRM, mySAP Financials, mySAP PLM, mySAP SRM, and more).

Looking ahead, SAP plans to launch SAP Employee Productivity (EP) xApps as part of the SAP Employee Productivity Suite (SAP EPS), which will cover areas like the Employee Interaction Center for helpdesk-related tasks and a Company Network application that will help in identifying and collaborating with experts in the company and support targeted information. SAP also sees potential in Guided Procedures that provide preconfigured process templates to support cross-functional and cross-departmental tasks, such as provisioning of a new hire in a company. SAP EP xApps are targeted to be released in mid-2003.

As the integration challenge has shifted from pure technology to applications, one of the most important steps toward enhancing employee productivity is increasing the ease of use and breadth of solutions. To this end, SAP aggregates application content from several solution areas, including Supply Chain and Supplier Relationship Management, Customer Relationship Management, Human Resources, and Financials. By unifying and integrating role-specific and generic services, delivers a 360-degree view of the enterprise and its partners, providing content and information not just on the immediate task at hand, but across all enterprise functions.

So as you devise your own ERM strategy, you can look to SAP for services and tools that will lay the foundation for better, faster decision-making and action for all roles in your workforce.

1 Gartner, "Management Alert: Business to Employee — A Key Element in Enterprise Strategy," August 24, 2002. ERM is also referred to as a "Business-to-Employee" or "Collaborative Workforce" strategy.

2 See the studies from Cedar, "2001 Human Resources Self-Service/Portal Survey" and Towers Perrin, "HR on the Web: New Realities in Service Delivery" (2001).

3 We are focusing on the active workforce, because it is here that a company makes its most considerable investment. However, organizations also build and maintain relationships with potential employees, applicants, contingent workers, and retirees, and these constituencies can also be included in an ERM strategy.

4 For more on Human Capital Management, see David Ludlow's article "Does Your Company View You as an Expense to Be Minizied?" in this issue of SAP Insider

Anke Doerzapf studied Business Administration with a focus on Human Resource Management in Germany. She has been with SAP for over six years. Previously, Anke was the product manager for compensation in the HCM GBU in Walldorf. In 2001 she moved to Palo Alto and joined the North America HCM product management team.
Steffen Udolph studied Business Administration at the University of Mannheim with majors in Marketing and Organization. Steffen joined SAP five years ago. Since spring 2002, he has worked in xApps Product Marketing for SAP’s Employee Productivity Suite. Previously, he worked in SAPMarkets’ Product Management as well as SAP’s Partner Program.

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