The State of HR Technology Bumps in the Road to Going Global

By Ed Frauenheim

Oct. 30, 2006

To Freddye Silverman, going global with HR tech systems amounts to a major journey. Silverman is part of a team installing Oracle human resources software at Travelport, a new travel services company that will operate in at least 25 countries. The goal is to have a single source of trusted HR data worldwide for Travelport, which was part of the Cendant conglomerate and includes the Orbitz travel services Web site. Silverman hopes the system will save on costs and allow executives to analyze information quickly to make key business decisions. But the team has a ways to go, with hurdles including lengthy upgrades.

    Fixing bugs and making other improvements to the HR information system will require time-consuming patches for each language, such that the entire process can last a day or more. Having to pause operations for that long about once a month is far from ideal in Silverman’s view. “We’re counting on Oracle to make this more streamlined going forward,” says Silverman, who was vice president of human resources technology solutions at Cendant and now is working on Travelport’s HR technology initiatives.

    Travelport isn’t the only company wanting more from its HR technology when it comes to global plans. Many big multinationals want to establish consistent workforce management methods around the globe—to the extent possible given local laws and customs. Vendors of HR software systems promise to help them with worldwide rollouts, but the products available often leave much to be desired, with such issues as cumbersome navigation for users. What’s more, many applications lack features required to meet country-specific requirements, both legal and cultural.

    Recruiting software products known as applicant tracking systems aren’t always capable of accommodating the various ways job candidates apply for positions and the ways organizations outside the U.S. consider applicants, says recruiting consultant Gerry Cris­pin. The software may not be able to handle names when the format isn’t the typical Western approach of first name followed by last name, he says.

    “Applicant tracking systems cannot be configured to meet the broad range of recruiting practices that currently exist in our own country, let alone the vast cultural differences that exist between countries,” he says.

    Companies have had global operations for decades, but in the past several years many firms have increased their activities outside North America, and there’s been a bigger push to operate with uniform methods throughout the world. Consistency has taken on greater urgency for a number of reasons, including the ability to save money by cutting down on redundant back-office operations and multiple license fees for software applications installed on a single-country or regional basis.

    Organizations also find themselves eager to enforce standard worldwide practices to increase overall effectiveness, demonstrate good corporate citizenship or comply with regulations. The ability to data-mine is another benefit. A universal HR information system can allow a firm to get a tighter grip on real-time operations, see weaknesses such as gaps in needed talent and deploy workers more effectively.

    Computer giant IBM, for example, has created an application dubbed Professional Marketplace that tracks the skills, availability and billing rate of Big Blue tech professionals throughout the world. The system captures data for more than 90,000 IBM employees.

    At first blush, it might seem the software would be a tool to accelerate the shift of technology work to lower-wage nations such as India, where IBM employs thousands of computer professionals. But George Lockmer, project manager for the application, says Professional Marketplace instead cuts down on the time it takes for managers to assemble teams and prove to potential clients that IBM has the resources for projects needing people in multiple countries. That’s “the real opportunity,” he says.

    IBM hasn’t always seen such global capabilities in the commercial HR applications it has considered or used. In choosing a new learning management system recently, for example, it chose a product from Saba in part because the application stood out for its ability to track the training of employees worldwide. IBM recently decided to scrap a set of commercial applicant tracking systems it was using, largely because the applications were too slow to process the massive number of applications IBM receives around the world.

    IBM is putting in place a new applicant tracking system in the Asia-Pacific region and may use the same vendor for other regions as well, says Barbara Brickmeier, IBM vice president of HR on Demand—the company’s catchphrase for creating a quickly deployed and adaptive workforce. As it sought to replace sluggish software, Big Blue found that not all applicant tracking systems can work in all countries, Brickmeier says. On the other hand, she sympathizes with companies aiming to sell her their products, given that IBM does business in 140 nations and employs people in 70.

    “Serving IBM’s global needs is a challenge for many vendors,” she says.

Worldwide boom
    Human capital management applications are one of the fastest-growing areas of business software, and North America is the biggest market for the products. The region accounted for 59 percent of the $5.5 billion spent worldwide last year on human capital management applications and related services and hardware, according to research firm AMR Research. But other parts of the world are enjoying faster growth. Spending on HR technology in North America climbed 7 percent last year, compared with a 20 percent rise in Europe and a 22 percent gain in the Asia-Pacific region.

    From 2005 to 2010, revenue from HR technology in North America will increase 7 percent per year on average, AMR predicts. That compares with 11 percent in Europe, 18 percent in the Asia-Pacific market and 21 percent in Latin America.

    Many HR software vendors tout systems that can span the globe. SuccessFactors says its software is available in 15 languages and has users in 134 countries. Last year the firm, which sells a range of products including performance, compensation and succession management, updated its software to take into account data privacy laws in Europe. Its European customers needed an option to limit the ability of managers to view the personnel data of lower-level employees.

“Applicant tracking systems cannot
be configured to meet the broad range of recruiting practices that currently exist in our own country, let alone the vast cultural differences that exist between countries.”
–Gerry Crispin, recruiting consultant

    SAP, one of the industry’s biggest players, boasts that it has versions of HR applications tailored for 46 different countries. The latest is Colombia, added in February, says David Ludlow, SAP vice president of product management for human capital management applications. Among SAP’s capabilities is flexibility for how different regions and nations structure employee compensation, Ludlow says. Many South African operations want to include a car allowance, he said, while European divisions may offer employee loans as part of an overall package.

    SAP also has teams of people monitoring legal developments around the world, including federal rules and legislation at the state level. “We deliver legal changes every three weeks,” Ludlow says.

    Even the way SAP’s software looks has shifted to take into account global realities. Now that many large organizations are establishing HR service centers in lower-wage nations such as India and the Philippines, the people using SAP’s software may be new to the field. Also, turnover rates may be high, Ludlow says. So SAP created a simpler user interface for much of the software.

    “You can’t go through three-month training cycles,” he says. “It has to be easy to use.”

    SAP rival Oracle also says its HR applications are ready for global clients. Like SAP, it keeps tabs on legal changes around the world and updates its software to make sure clients are in compliance. The company also says that global installations of its Oracle E-Business Suite Human Resources Man­agement System require less patching than those of some competitors, where patches are necessary both for different languages and for country-specific versions, or “localizations.” Oracle’s product is designed so that separate localization patches aren’t needed.

    Silverman gives Oracle’s E-Business HR software high marks for blending a common underlying application with localizations that work for different countries. But she still worries about too much downtime in the system because of upgrades. Patches, she says, are typically distributed monthly. Also, “when you have to patch, you have to patch in every single language.” Those separate fixes can take three to five hours for each language, she says, and Travelport may eventually have 10 languages installed.

    Then there’s the matter of manager headaches when using the software. Silverman says Travelport is a heavily “matrixed” organization, meaning managers may have some responsibility for employees who don’t report to them directly—sometimes in other geographic regions. The structure of Oracle’s software simultaneously makes the helpful localizations possible but can frustrate managers with indirect reports, Silverman says. The application is set up around “business groups,” which may require managers to have multiple security profiles if they want to see data about indirect reports, she says.

    “The average user cannot navigate around the system easily,” she says.

    In a statement, Oracle responded that Travelport’s organizational structure is atypical, and that “the Oracle HRMS product is not the only product available today that has issues supporting this unique type of organizational structure.”

    Oracle also indicated Silverman and her crew have reason to believe their downtime will decrease. “[O]ur Oracle Support group has worked with other customer organizations to come up with workarounds that help solve and streamline these language patching issues,” the company said in a statement. “A few customers who have similar models to Travelport have experienced significant reductions in the amount of time it takes for language patches.”

Different applications, different challenges
    Some types of HR applications may be easier to install and use globally than others are. Learning management systems don’t have as many country-specific laws to worry about as do recruiting applications, says Abhas Kumar, senior vice president of strategy and integration for learning technology firm NIIT USA. Learning management applications, which typically track the training and certifications of employees, primarily need to display and accept multiple languages for global organizations, Kumar says. For languages such as Arabic and Chinese, he says, that requires what’s known as “double-byte” capability, a software feature that allows for characters more complex than those in the Roman alphabet used in English.

    “It’s not a trivial issue, but it’s been done” for NIIT products, he says.

    Recruiting technology systems, mean­while, often get dinged by observers for their global shortcomings. Shally Steckerl, who heads up research for the staffing department at software giant Microsoft, says recruiting applications can stumble on issues such as the legality of asking candidates certain questions about their background, translating salary information into the local currency and handling different address conventions in their data input fields.

    “The application should be able to flex” with differences around the globe, he says. “Some applications can’t flex.”

    To be fair, makers of HR technology systems face tough challenges. The field of human resources still lacks universal definitions for some basic metrics, including headcount and turnover. Compounding that problem is great variance around in the world in laws affecting employee management. Then there are different cultural beliefs that can run deep.

    Consultant Crispin says some parts of the world have fixed attitudes about which jobs are appropriate for a certain gender, race, ethnicity or age. Recruiters with such attitudes, he says, aren’t likely to take advantage of a cutting-edge recruiting application that slices and dices applicants’ experience, skills and attitudes. Instead, he says, they’ll use the tool only to fill out the application after they make the hire. “The ATS application then becomes an expensive Excel spreadsheet,” he says.

    The solution, in Crispin’s eyes, is not to customize the application to help search for candidate data not relevant to performance, but for the multinational companies to resolve the cultural gap between local approaches and international standards.

    As with physical journeys around the world, a little luck may be required when rolling out HR systems globally. Silverman, at least, is hoping for some good fortune as she and her colleagues try to smooth out the worldwide wrinkles at Travelport. “We’re crossing our fingers,” she says.

Workforce Management, October 9, 2006, pp. 29-32Subscribe Now!

Ed Frauenheim is a former Associate Editorial Director at Human Capital Media and currently works as Senior Director of Content at Great Place to Work. He is a co-author of A Great Place to Work For All.

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