To consistently outperform the competition in todays economy,
companies must find ways to make the most of their existing assets. One
key asset a companys 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. Its no wonder
then that many companies are seeking to implement an Employee Relationship
Management (ERM) strategy.
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 employees view of the entire enterprise
- Adding collaboration, process automation, and monitoring for continuous
- 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 youve 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.
at a Glance
||2001 North America
Cost Per Transaction
||60% average reduction
||60% average reduction
||100% in <22
||Up to 50%
to Service Center
||Up to 90%
|Source: Cedar, 2001
Human Resources Self-Service/Portal Survey
||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 companys 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
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 companys 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
companys 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 Companys Employee Relationship Investments
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
Manager to Employee (M2E)
- Employee Placement
- Employee Development
|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
|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
Employee to Employee (E2E)
- 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)
- General Information
|Employees interact with external institutions,
including partner companies, health plan providers, government agencies,
and general information portals (such as Yahoo!).
||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 companys 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
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
Components that enable an ERM strategy
to provide immediate access to policies, applications, and forms (see
||Example of a Personalized Training Page
and communication tools, such as email, calendar, chat rooms, team
rooms, and application sharing to help promote better exchange of information
management for managing and leveraging the companys 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
to meet and facilitate individual preferences and needs, and ensure
relevance of the provided services and information for the individual
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
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
ERM strategy is not a one-size-fits-all endeavor.
It must reflect your enterprises 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
SAP delivers applications, technology, and services to support a companys
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. Whats 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, mySAP.com
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
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.
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
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.
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 SAPs Employee Productivity
Suite. Previously, he worked in SAPMarkets Product
Management as well as SAPs Partner