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Human capital is the most important asset of an organization. Unfortunately,
it does not find its rightful place in the balance sheet of the company.
In the production economy, what was managed was inventory. In the knowledge
economy, what is managed is still inventory! Look around in companies that have
automated processes and systems; HR is invariably the last component to be
implemented or one thats been left behind for a later date. In many cases where
HR is deemed to be automated, it is payroll thats actually getting processed.
Why is it that in a nation thats proud of its intellectual capital and has one
of the largest human resource pool, companies shy to put modern processes behind
people?
Of course, in todays fast changing world, few talk about retaining talent.
Why is HR sidelined? What do companies expect from HR? What role does an HR
actually play these days? Many, many questions Lets explore whats beneath all
the changes.
The Transformation
In the production era, HR transformed from industrial relations to personnel
management. It was largely administrative in nature and automation was perhaps
only in the area of attendance.
In the current economy, business happens much faster on the account of
knowledge sharing. Business conditions are changing rapidly, margins and prices
are fluctuating dramatically, and revenues are no longer predictably assured.
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JIT, ABC, and quality are completely relevant and have expanded to being
applied to HR processes too. Isnt it common today to assess HRs performance
based on turn-around times, quality of recruitment, number of infant
separations, cost parameters, etc? Isnt it commonplace to hire just-in-time as
temp-staff from an out-sourced or sub-contracted company? The parallels are
clear. Yet the contrasts are stark. In how many companies has HR been the first
or among the first functions to get automated? In how many instances has the
decision to automate HR been an organization-wide initiative, and not the
responsibility of the department head alone? Recently, in a major software
company that was planning to re-automate its HR system, the HR director was the
only person who was under stress of vendor influence and pressures from market
place. None of the other departments felt any impact of the decision or even
that of the buying process. But, the same company had a committee formed from
the cross-section of the enterprise to select its ERP product. Wheres HR
heading?
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Although everybody in the corporate world will endorse the need for strong,
centralized HR, HR itself is breaking into specialized functions and is getting
embedded in the operational hierarchy of the company. Taking the example of the
same software company, manpower planning is done at individual function level
and HR is a recipient of the plan. HR then acts as a facilitator for conducting
interviews and collecting electronic or paper feedback to finally sending out an
offer letter to the candidate whose designation, position, and compensation are
fixed by the operating function.
At a broader level, HR is getting specialized into HR talent search
(embellished term for recruitment), HR-leave, HR-appraisals, HR-separation,
HRpayroll, etc.
The immediate future is far different from the present. HR is getting
combined with knowledge management.
Identity Management
How are these authorizations in a flat hierarchy and transnational company
set? An emerging technology called Identity Management is being used to control
information access and is completely dependent on an HR system. While HR
maintains core information about people, roles, and responsibilities, Identity
Management works along with the people definitions and workflow management to
let the authorized information be accessed by the identified person only in a
largely networked environment. Identity Management works on the policies of:
n Authentication: Its validation of an identity in an Internet world. Is
this the true identity?
n Authorization: Is the authenticated identity allowed to seek, provide or
perform a specific set of information or activity in an organization?
n Access: Based on the verification process, access to the requester is
granted or denied n Audit: A trail of the actions performed by the authorized
requestor in the system.
In a sense, these are traditional concepts of organization hierarchy or
Power Matrix blended with roles, responsibilities, and, therefore, authority
on the Internet.
In the digital knowledge economy, knowledge becomes fluid and can flow
across. Companies can have sub-contracted employees working from their premises
or elsewhere, with complete access to infrastructure and information as required
for the work to be done. HR systems can accommodate such employees with relevant
personal details to provide with requisite facilities without taking ownership
of the employee. In todays context, a temp-staff is not in the transaction
database of the HR system of the company requesting for services. But as
real-time collaboration happens, and the supplier-customer bonding strengthens,
like in supply-chain management concept, the information bottleneck determines
the weakest link, in HR concept.
Like inventory held center-stage in the production era, human resources needs
to be the central point of focus in the knowledge era. HR systems will evolve to
facilitate flow of people with minimum administrative overheads. HR will remain
diverse at the operational levelrecruitment, compensation, leave, etc. But at
the enterprise level, it will become the only fabric that bonds and envelopes
the company with rest of its eco-system. And, this will be the competitive
advantage in the knowledge era.
On being asked about its business expansion into starting transportation for
people besides goods, CEO of a leading logistics company said: Cargo doesnt
complainthe times are changing to recognize human as capital in business!
Shekar Y,
The auther is director, Adhishtaa Consulting,
an ERP consulting firm
maildqindia@cybermedia.co.in
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