The vast majority of companies still gauge their overall performance using systems that measure internal financial results – systems based on metrics that don’t take sufficient notice of the real engines of wealth creation today: the knowledge, relationships, reputations, and other intangibles created by talented people and represented by investments in such activities as R&D, marketing, and training. (Bryan 2007) In fact this author points out “the opportunities to increase profit per employee are unprecedented in a digital economy, where intangible assets are a rich source of value. On the other hand, opportunities to improve ROIC (return on invested capital) to an equal extent are hardly as plentiful.”

So taking a look at one key labor resource, knowledge workers, which represents the fastest growing talent pool in most organizations; they too, have their own demands and peculiarities. By one estimate, 48 million of the 137 million workers in the United States alone can be classified in this group. (Bryan 2007) This study states that organizations should focus on providing essential knowledge tools, resources, and corporate intelligence to the right employee at the right time.

Why? Or better yet – “SO WHAT?”

Try this on for size - Greater productivity drives greater profit per employee. Greater profit per employee drives a greater return on shareholder value and overall positively effects the company’s market capitalization.

So what is ESS2.0?
With the advent of SharePoint as a corporate standard for a unified portal strategy and the concept of self-service applications, such as online banking, being widely accepted by consumers, the opportunity is now present for employees to maintain their records via online tools (and to do so in a quick, easy and efficient manner) thus eliminating the need for HR to manage this task. Let’s refer to this as “ESS 2.0” which is all about the integration of structured data (in our case SAP HCM business processes) and unstructured data / other business applications via the SharePoint portal environment.

So how does 2.0 compare to ESS 1.0 you might ask? ESS 1.0 was all about a ‘stand-alone’ systems approach to self service offering delivery – meaning, your ESS/MSS application would be available in a completely distinct application environment while your other business processes and related corporate knowledgebase, documentation and other sundry items would operate in their own non-integrated systems environment. In three words ESS 1.0 is about – “silos of information” – a confusing array of approaches to viewing and updating critical information related to your Human Capital Management environment.
So you are probably saying “ESS 2.0” sounds like a good idea but how can this be monetized or better yet what is the ROI for this?

For the next few days, I am going to be blogging about the business value associated with human capital management and how it is impacted by the deployment of employee self service solutions… using REAL dollars and sense! We are going to start by taking a look at productivity associated with employee/manager self service and we’re going to drill down on the types of transactions that impact employees and managers daily, weekly, monthly, quarterly, semi-annually and once a year. Then we’ll dive into how support personnel, shared services and the corporate help desk are impacted from a total cost perspective related to employee self service. Other factors that we’ll explore include training costs, initial and ongoing development costs and what it takes to deploy and of course, maintain and support the application. A final discussion will center upon user acceptance and the critical role of usability / user experience in the fulfillment of the ‘dream’ (e.g. actualized ROI).

So get ready for some fun and some thought provoking exchanges coming up in the next few days.

Tomorrow: Unlocking Employee Productivity with ESS 2.0
Bryan, L. (2007). “The new metrics of corporate performance: Profit per employee.” McKinsey Quarterly 1: 56.