Unlocking Employee Productivity with ESS 2.0
In today’s discussion, we focus on how employee and manager self service drives significant productivity gains from a bottoms up perspective. We will define “ESS 2.0” by contrasting it to “1.0” and then we’ll get into one of the five key areas of significant savings associated with deployment of ESS 2.0 solutions.

What is ESS 2.0?
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 thus eliminating the need for HR to manage this task. Of course the additional benefit is that the employee/user will find this to be an easy, quick and efficient approach to keeping their employee information current.  So 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 ESS 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?

Which gets us to the point of this blog posting so let’s start with our first in a series: “ESS 2.0 Employee Productivity”.

Employee Productivity – Manual vs. ESS 1.0 vs. ESS 2.0
As mentioned previously, to get a handle on self service productivity, we take a look at the issue from a ‘bottoms-up’ approach starting with thinking about the specific business processes or transactions that an employee would initiate and complete. This transaction can take on a few characteristics like the frequency of the transaction (e.g. hourly, daily, weekly, monthly, quarterly, annually); the complexity of the transaction (e.g. time entry vs. on-boarding a new employee; system processing such as read/write data - workflow); and the involvement of other employees and associated salaries/overhead, in the transaction (e.g. managers, employees, HR analysts, developers, support personnel).

To further help our understanding of the business value of HCM self service delivery, let’s introduce ABC Corporation, a fictitious 30,000 person organization that we will refer to throughout our mini-series here on “Driving Business Value”. In the case of ABC Corporation, we have 26K employees and 4K managers that make up the workforce. To help us get a handle on how ESS 2.0 helps to drive employee productivity we will take a look at transaction frequency by modeling high, medium and low frequency transactions.

Let’s look at a high frequency employee transaction, say ‘time entry’, which is a process executed on a daily basis. In the 2.0 world, the corporate portal is up on the employee desktop all day and that employee remains signed in to the system throughout the work day. Each and every day – the employee can quickly click on the time entry app, enter the time and cost center for his/her activity without logging into completely separate systems to accomplish the task. Corporate Time Entry policies can be immediately posted to this screen making quick dissemination of new information easy, accurate and very targeted to the specific employee use case. Now compare this to the ‘1.0 World’ and you can immediately see that by having to deal with separate systems, log ins, and processes, you can rationalize a 20% time savings associated with this high frequency transaction – instead of say 5 minutes to accomplish this task you could get it done easily in less than 4 minutes. While this might not sound like much think about this - “1 minute times 30K (employees) times 20 (working days per month) equals 10,000 hours of saved time per month or at an average salary (fully loaded) of $50 per hour… or… $500,000 that drops directly to the bottom line on a MONTHLY basis.

One quick word about transaction frequency is that you can really think of any daily (or every other day) online ESS transaction as a high frequency transaction – in other situations, a high frequency self service transaction may be entering purchase requests; or checking in on your portfolio performance in your benefits program.

Now we can look at a medium frequency employee transaction, say ‘personal information update’, a process probably executed on a monthly or even more likely a quarterly basis. So we get the same advantage as the high frequency (e.g. single environment advantage of the 2.0 world) but we are also now dealing with the process knowledge support factor with this transaction as we now get into transaction complexity. Since this is a more infrequent transaction, an employee loses context and memory of how the transaction ‘works’. Leveraging ESS 2.0 integration technologies, the structured processes now are merged with unstructured support information (e.g. knowledgebase, policy documentation, training videos) whereby the employee can quickly ‘relearn’ the process and accurately complete said task thus rationalizing a 10-12.5% gain in time savings.

This same principle holds true for low frequency employee transactions, those that an employee may execute on a semi-annual or annual basis (e.g. benefits program enrollment, W4 tax exemption updates). The familiarity with transaction processing is very low, thus the ability of the ESS 2.0 environment to merge learning tools, supporting policies and help documentation, ease of use, single log in and links to external tools (e.g. W4 Exemption Calculators) helps to accelerate transaction completion time and accuracy thus freeing the employee to do more critical work (e.g. processing new patents for the company). Again, we can estimate a conservative 20-25% gain in time savings.

The Bottom Line?

So with this information we can now model estimated employee savings since we have the necessary inputs to calculate total transactions and ultimate productivity gains in USD (e.g. # of employees – 26K; time savings associated with various transaction types; frequency of example transactions; estimated average salary and overhead for the majority of our employees).

With our total ESS transactions for ABC Company running close to 3.5M per year we can now estimate the time savings and then map this to our average cost per employee. In terms of employee productivity alone we can conservatively estimate nearly $1M per year in savings for ABC Corporation associated with ESS 2.0 oriented self service delivery for HCM.

This Afternoon “How ESS 2.0 Drives Significant Savings Manager Self Service Productivity”