Do employees relate to relationship tools?

ERM software can be a valuable tool for enhancing worker productivity. But if you can't relate to your employees already, critics say, it won't fix what's broken.

Even CRM companies can use a hand when it comes to improving relationships with their own employees.

Rome-based TeleAp SpA built its business on improving enterprise communications. An integrator of customer relationship management (CRM) systems in call centers, TeleAp has grown nearly five-fold since it was founded in 1995 -- the company started with 55 full-time employees and has grown to include more than 250. That number includes a large force of remote software consultants, who often work at customer sites for weeks or even months at a time.

Needing to enhance productivity and communications, TeleAp in 2003 implemented employee relationship management software from San Mateo, Calif.-based Siebel Systems Inc.

Siebel's ERM 7.5 application suite helped "improve efficiency and empower the work force -- making them aware of target objectives and the business model for reaching those targets," said Gabriella LoConte, TeleAp's marketing manager.

A single desktop interface lets employees review their performance goals, register for training and handle routine administrative tasks like filing expenses. TeleAp managers use the system to gauge how well employees are meeting those goals, which in turn affects how workers are compensated.

Employees at the company's four locations in Italy can remotely access their desktops to answer e-mail or deal with customer service issues. Most important, TeleAp executives can nimbly change direction and roll out new initiatives quickly.

LoConte said Siebel's ERM suite helped slice training costs in half, and it produced additional savings by streamlining management of company portals. ERM has also provided intangible benefits to employees, LoConte said, by showing them the vision of the company. The system helps managers by allowing them to identify skills gaps, among other benefits.

A strategy, not a solution

TeleAp fully implemented Siebel's system in July. It was the culmination of a 15-week gap analysis, followed by a one-month pilot used to train employees on the technology. LoConte said that the organizational phase was key to communicating the company's goals to employees. "This is something [for other companies] to keep in mind because ERM is not a project or solution; it's a strategy," she said.

Experts say that most organizations fail to grasp the complexities of employee relationships. Nor is automated software a panacea for an age-old quandary: figuring out how to motivate a work force and making sure everyone sings from the same hymnal.

"Performance management has been pretty badly done for generations," said Katherine Jones, an analyst with Boston-based Aberdeen Group. "Does software make it better? Well, it makes it different."

ERM software is to work force management what CRM software is to customer relationships, Jones said: "It's only a tool. If you can't relate to your employees [already], then buying software to do that is not going to help, and in fact could make things really bad."

Siebel coined the ERM acronym. Several years ago, the company said it saved millions of dollars by applying its ERM suite to quickly adjust for the impending recession. Still, there is no shortage of competitors. Siebel, PeopleSoft Inc. and Oracle Corp. all have similar offerings. There also are a lot of smaller players, including Synygy Inc., Kronos Inc. and Matrilogic Technologies.

Alphabet soup

Competing terminology further complicates matters. "Human capital management," "enterprise relationship management" and similar jargon all refer to the same thing: the process of bringing frontline employees in contact with corporate goals that cascade from the top. "In a way, you're trying to legislate integrity," Jones said.

Pleasanton, Calif.-based PeopleSoft pushes ERM as one part of its human capital management (HCM) application. Standalone ERM products don't provide the core infrastructure needed to link human resources functions like recruiting, training, compliance reporting and optimizing labor, said Jason Averbook, PeopleSoft's director of HCM product marketing.

"I compare ERM to frosting without a cake," Averbook said.

One of PeopleSoft's customers is Southern Co., a Birmingham, Ala.-based electric utility. It used PeopleSoft's HCM suite when reorganizing its pay classifications, saving $2 million a year after an investment of $500,000. Pricing in this space is often done on a sliding scale, per number of employees, but the software is a big-ticket item. The bottom line is that ERM and its cousins are not for companies on a shoestring budget.

Still, what's lacking isn't technology, but methodologies. Until business processes get sorted out, ERM will be a solution in search of a problem, said Denis Pombriant, managing principal with Beagle Research Group near Boston.

"That's not a bad thing," he said. "It's how products and industries get born."

About the author: Garry Kranz is a freelance business and technology writer in Richmond, Va.

FOR MORE INFORMATION:

Is ERM the next CRM?

Siebel's new tools aimed at perfecting staff performance

This was first published in March 2004

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