Opportunities blossom as HR moves out of the back room

Human resources is not exactly a glamorous occupation and that's been reflected in the dearth of software vendors who have catered to this niche federal market. But in the new reality of cutbacks and doing more with less automated HR systems have suddenly been thrust into the spotlight. With a number of recent government reports specifically targeting people management at agencies the message is clear: HR personnel had better change the way they work - or else.

HR management systems usually have been in-house affairs in agencies and there has been some resistance to using third-party software. The federal marketplace - with its "regs and legs " as one vendor put it - was believed too complicated for anyone outside the government to handle.

But that market may not be as unique as some have thought. Vendors have found that lessons learned in the commercial sector may indeed be applied to federal users.

Now as agencies have begun re-evaluating their HR procedures - including automation costs in their budgets - vendors have begun showing an increased interest in the market.

A number of HR software vendors including PeopleSoft Inc. and PDS have launched or strengthened their existing federal divisions while systems integrators such as PRC Inc. and Computer Science Corp. are building partnerships with vendors and have started to offer their wares as an integral part of larger system environments.

Nothing Personnel

It wasn't that long ago that HR everywhere was looked on simply as "personnel."

"It was the back room - the folks with the green eyeshades " said Michelle Lowesolis the chief of future systems for the Air Force Personnel Center.

But the role of HR directors - and by extension the mission of HR - changed in the 1980s."They were brought into the strategic planning " said Lisa Jefferson the program director for HR at Oracle Government. "They were asked to look strategically at how they were going to...help managers manage their people."

Today HR is considerably more than just payroll. One government agency counted more than 400 tasks that fell under the aegis of "human resources."

But the role of HR is still generally a focused one and most would agree with Gus Siekierka vice president of HR for CSC's Systems Group Falls Church Va. in his description: "The mission of human resources is the acquisition development and deployment of talent throughout an organization. Bring them in keep them trained and deploy them to meet customer needs."

According to Jeff Carr vice president of PeopleSoft's Federal Business Unit Bethesda Md. HR management systems are "workforce management systems." Product mixes vary. Some vendors such as Resumix Inc. a software company with a job applicant database offer specialized products. Others like Oracle offer a variety of system modules including payroll processing personnel and benefits distribution training and development Equal Employment Opportunity Commission compliance and more.

And virtually all vendors have signed on to the client/server architecture using some kind of Unix- or Windows-based host and a PC client.

Lots of Forms

In grappling with federal requirements HR software developers swiftly reached a conclusion: There are a lot of forms out there which of course is no news to government HR managers. These forms and the need to handle them are what make the federal market a challenge.

Standard forms - recognizable by the SF prefix - abound in the federal environment and most contain information that an HR management system would require. SF 52 for example is used to track personnel through actions such as transfer promotion furlough and so on while SF 182 is a life-cycle form becoming in turn a request for training a record of training and a certification document.

Software has to be designed to handle these forms extract data from them and replicate them when necessary. And that data has to be proliferated. As Gail Lovelace director of HR at the General Services Administration pointed out: "All agencies have to feed information to the [government's] central personnel data file."

Consequently there are standard forms and formats that have to be adhered to when working with HR information because that data has to be passed upward. "Though each business even in the federal government is run a little bit differently " Lovelace said "in the government each agency has to feed into the central database."

Agencies also have to comply with regulations and legislation that seem to change on an almost monthly basis.

"We have to deal with the Privacy Act of 1974 " the Air Force's Lowesolis said. While ensuring a job applicant's privacy the rule makes it difficult for the Air Force to share information among its bases. For example the Air Force has used the Internet for years but "Internet applications don't provide us with the ability to do that " she said. "And we need to protect the individual's data at the Web level."

But vendors don't believe that the federal market is all that different from the commercial or education sectors. PeopleSoft's Carr while acknowledging that federal buyers believe their market is uniquely challenging noted that "every industry makes that statement.... And every market is afraid that they won't be able to use cross-industry software. But there is a common thread between federal and commercial applications."

"Everyone wants to do more with less...and no one has carved out human resources and said `You guys will be different ' " CSC's Siekierka said. "You have more rules in the public service but the core functions are still the same.... You still have to acquire and develop talent administer benefits and salaries."

"There really isn't much of a difference " said Jeff Brody vice president of HR for systems integrator PRC.

"The focus is the same.... Privatization and the continuing legislation in the government have been forcing a great deal of change...the kind of changes that force government agencies to rethink how they do business " he said but those forces are at work everywhere.

"What really makes the federal market different " Oracle's Jefferson said "is that the federal market is just now approaching the change that the commercial side had to make years ago. They've had to adopt the role of being a consultant...an adviser responsible for identifying the success factors and supporting it with human resources."

Changes Afoot

"Human resource groups are being asked to do more strategic things " agreed Greg Morse director of marketing for HR software vendor Restrac Inc. "They realize if they don't get on-board it will eliminate them in many cases. They don't simply want to be paper pushers and that's the reputation they've gotten."The push to change was not a gentle one. The National Performance Review a study from the National Academy of Public Administration and the Paperwork Reduction Act among others indicated that it was time for HR to change its game.

"The role of the HR professional must switch from paper processors to responsible consultants and advisers " according to the NAPA report.

The private sector had been living with that reality since the mid-1980s. But it took a while for mind-set to sink in on the government side. Said GSA's Lovelace: "When they dumped the federal personnel manual we said `Maybe they're serious.' "

"The push to automate has been driven by a couple of things " according to Bob Bushnell chief of systems operations for the Air Force's Civilian Personnel Operations Directorate. "The National Performance Review the Paperwork Reduction Act - these things and more have led us down the path of how are we going to do the same business smarter."

The civilian workforce has been cut back by as much as 50 percent and that ironically is paying for the automation that will support the remaining staff.

And there's plenty of work to do. "What's out there now are legacy internally built mainframe systems " PeopleSoft's Carr said. "It was a build vs. buy mentality.... There were large IT staffs large budgets and no competitive environments."

To some degree he believes that mentality was a result of the government market's perception that its HR issues were too difficult to deal with. "They said `We are unique nothing will meet our requirements so why look?' "

Of the major categories of HR - benefits administration and payroll management - payroll is the furthest along.

"Everybody in the government is being paid " Carr said "and the accounting systems have been automated. Of course many of those systems are 20 or 30 years old but they are automated."

But throughout the federal sector Carr said he rarely comes across integrated systems. Instead he more often finds "silos of automation."

Probably the least attention has been paid to training. For a long time employees were viewed as fungible. Government and commercial employers hired a certain skill set and didn't much care about further training.

That is beginning to change. Those employees who survive cutbacks are more likely to receive training to keep them productive. Computer-based and remote training are on the rise and some vendors are beginning to automate the administration of those tasks.

The Air Force is putting in a new infrastructure to support new applications for its civilian employee HR system. "Before you can bring in new technology you have to invest in the new equipment " Bushnell said.Among the tasks under way are providing Internet connectivity and higher-bandwidth physical links within buildings. Investing in infrastructure indicates that the designers are showing some foresight but the measures are necessary.

"In 1992 we consolidated " said Dick Auclair the technical adviser for the System Division Civilian Systems Development at the Air Force. "We have been forced to regionalize and now to downsize.... We're servicing the Air Force from one area."

Even having the most up-to-date-sounding service may not be all it seems.

The Air Force has been on the Internet for decades for example but that means that much of the infrastructure is old and needs to be replaced.

That regionalization will be done over the next three years according to Lowesolis and HR is just beginning to stand up to the task. "We picked up our first base Aug. 18 of this year we'll add eight more this quarter and service 80 bases overall. We'll [eventually] be servicing 130 000 civilian employees with a staff of 400."

Facing cutbacks as well GSA is preparing to upgrade its old HR system according to Lovelace.

"I don't believe we can do more with less " she said. "I believe we can do different with less."We touch a lot of paper in our job and it's important paper: taxes benefits and so on. I don't think we need to touch that paper. It's the first thing we can automate."

Today GSA is using an adaptation of the Personnel Information Resources System a mainframe system "based on some very old software from the Air Force " which it will move away from. In a break with tradition GSA has pretty much decided to shop for a third-party package and modify it rather than build from scratch or use software developed by another agency.

To Market to Market

Vendors are beginning to circle around potential customers. "I have seen a real increase in vendor interest in our business " Lowesolis said. "It's a noticeable increase."

However that doesn't mean that the commercial sector will immediately fulfill agencies' expectations. GSA is preparing a major purchase but doesn't expect that complete solutions will be offered. "There are a lot of private-sector companies that are federalizing their HR packages but I haven't seen anybody who does it all yet " Lovelace said.

And the commercial sector is still leery of catering to the federal market. Several major federal systems integrators said they have little or no presence in the HR arena perhaps because there are no established channels.

"HR management systems - unlike say federal financial systems - are a little more wide open in terms of how you procure " Lovelace pointed out. "There's no scheduling process no mandatory requirement that you sell off the GSA [schedule]."

Vendors have been known to use IDIQ contracts direct sales and partnerships with integrators to move their products. But HR is still a difficult sell according to Oracle's because it isn't frequently included in requests for proposals. Or if it is the RFPs are written in such vague language that it's hard to address their requirements.

"[Agencies are] trying to cover all the bases.... They're being far too general right now because they're still not sure where they're going " Jefferson said.

Still because there is a substantial body of successful implementations on the commercial side companies can begin to point to return on investment (ROI) as a justification for agencies to buy particular products.

"We can show them an ROI of from six to 18 months " Restrac's Morse said.

Even though there is uncertainty now the fact that agencies have to change the way they do business is a convincing reason to many vendors that a major market is building.

Over the next five years there'll be a lot of activity Jefferson predicted. "HR is having to make a transition " she said. "They are literally trying to re-engineer their business" on the fly.

Lazar is a free-lance writer based in Tenafly N.J.

* * * * *

At A Glance

Status: Agencies have typically used HR management systems developed in-house but cutbacks and other changes are forcing them to consider commercial off-the-shelf packages.

Issues: Agencies believe they have unique requirements that third-party products cannot provide for but vendors disagree.

Outlook: Good. While there are differences to iron out HR in the government is changing radically and the market for management systems solutions over the next few years is expected to grow considerably.

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