Hitting The Target

Workforce-optimization tools can help companies get more from their employees--and let employees get more from their jobs.

InformationWeek Staff, Contributor

April 12, 2002

8 Min Read

Ryder System Inc. is delivering its logistics and transportation services to customers "closer to budget" and on time, says director of program management Vince Livingston. How? By using professional-services automation software from Evolve Software Inc. to better control how employees spend their time.

Before turning to Evolve's software, 300-plus Ryder employees were able to assign themselves to projects and tasks. The result was chaos: Project and program managers didn't have a clear look at which employees were working on what projects, who was responsible for specific tasks, which employees were underutilized or available for new projects, or how employees spent their time on the projects.

Evolve lets Ryder project and program managers assign employees to projects and tasks. In turn, employees are more accountable: They go online every week to input data on how they spent their time, as well as enter expenses related to their work. This helps Ryder managers better track project progress and budgets. The software enabled the changes by making all information about each Ryder worker--their skills, their availability, and so on--available to program managers, who, like the project workers, are located around the country.

"If we're looking for someone with expertise in distribution for a project, then this can help us see if someone is idle who has that experience," Livingston says. Without such a tool, "you don't know the range of everyone's skills, especially people who've been in the business 20 years or more."

Professional-services automation software such as Evolve's is part of a broad set of software that employers use to better manage their workforces. These "human-capital" management tools help companies boost the performance and productivity of their employees and their partners' employees, as well as improve the quality of their services and products. Most of all, they let companies align employees' skills with business priorities--a critical advantage during unpredictable economic times.

Take incentive-management software, which can help employers focus their employees on fulfilling company goals by linking their accomplishments to their pay. Once used mainly by companies to manage salespeople working on commission, companies are now using the software to compensate non-sales employees with variable pay. Business-services company Kinko's Inc. is rolling out incentive-management software from Incentive Systems Inc. that will let a branch manager track whether his or her store is meeting its yearly sales and profit targets, and how that will affect employees' pay. The information can help managers and employees better focus on areas that can be improved to meet or exceed sales or profit goals; showing how the goals are linked to pay increases the odds that people will take action.

The software also lets employees create their own opportunities. In the past, if a branch wanted to launch a marketing promotion to boost sales of a particular service, Kinko's couldn't tailor its incentive plans to encourage employees to push that service; the calculations and paperwork required to make the changes in the pay were too labor intensive, says Wesley Wada, VP of compensation, benefits, and human-resources management systems. With the new software, launching such special promotions is easy.

Changepoint let Concentra reduce its administrative staff by 70%, Carr says.

Until recently, when case managers for health-services company Concentra Inc. returned from a long day on the road, they had to spend hours filling out paperwork about each patient visit so the Waltham, Mass., company could bill for its services. Not only were the administrative chores time-consuming and exhausting, they also led to mistakes and omissions. "A big issue for people in field-care work is forgetting everything they did each day and how long it took," says Larry Carr, president of Concentra's case-management services. So Concentra has begun deploying a professional-services automation system from Changepoint Corp. that not only dramatically reduces the time caseworkers spend on administrative tasks, but which ultimately will help Concentra better manage caseworkers based on their skills and experience.

Concentra's 1,300 caseworkers--each of whom typically has 25 to 30 active cases--now use Compaq iPaq pocket PCs loaded with Changepoint software to enter information about time and services provided on each patient visit, from the road during the day, Carr says. The caseworkers then transmit the information to Concentra headquarters at the end of the workday via a modem or cradle. Concentra also downloads information to the caseworkers about patient assignments. The software even helps the company match cases and caseworkers, based on information about the patients and the skills and expertise of employees. "We can track the expertise and credentials of all our workers and assign the most appropriate people to patient cases," Carr says.

With Changepoint, Concentra has cut its 300-person administrative staff to 90. "Our management [used to spend] two-thirds of their time looking through caseworkers' paperwork," Carr says. The Changepoint software cost about $700,000, but in six months, Concentra recovered the cost of the software and pocket computers, he says. "Everything is incremental payback from here." Carr expects the new system to reduce burnout and turnover among caseworkers and improve patient care, giving Concentra competitive advantages both as an employer and as a health-services provider.

Professional-services automation tools can also remove the politics of assigning employees to jobs or projects, says Jeff Stewart, chief financial officer at Clarkston Group, a business and IT consulting firm in Durham, N.C., that recently implemented Changepoint's software. "I can use the software to see who's available with the skills and experience I need for an engagement and get objective suggestions," he says. Without this software, people often get assigned to projects because they are well-liked or known by someone else on the team, rather than for their particular abilities or availability. What's more, "We [were using] spreadsheets that didn't reflect current information" about whether a consultant was working on a project, on vacation, or in training at any particular time, Stewart says. The software helped boost Clarkston's client billings by 3% in the first 60 days of use.

Human-resource management tools can save money in other ways, too. Lincoln National Life Insurance Co. recently purchased incentive-management software from Synygy Inc. to manage the complex incentive compensation programs used to pay its distributors--the 100,000 stock brokers, financial planners, and banks that sell Lincoln insurance policies. The Hartford, Conn., company's products include high-end insurance policies for affluent individuals and small businesses, and the average annual premium of a Lincoln policy is $23,000--about 15 times higher than the insurance-industry average, says Janice England, Lincoln National's assistant VP of producer services, business, and systems. As a result, Lincoln's commission programs are unusually complex.

"There may be five to seven individuals involved with the sale of a policy," England says. The commission paid depends on how those individuals were involved, such as who initiated the contact with the customer, she says. All this is difficult to track, "and our legacy systems are not built to be flexible to modify those relationships," she says. By deploying Synygy's Compensation package during the next several months, Lincoln will be nimble enough to support more complex commission plans that can change according to Lincoln's business needs or the economy, which the company expects will in turn build goodwill and stronger relationships with its distributors.

The project, which kicked off in late March and is planned to go live in November, cost $1.8 million. Lincoln expects to recover those costs within a year.

But some managers haven't decided how best to deploy these tools--or whether employees might view them suspiciously. One global high-tech manufacturer has created a database to keep better track of its employees according to their skill level. But having gone through difficult layoffs amid the slump in technology spending, executives, who asked that the company not be identified, worry how employees might react to the new database, so they haven't yet made its existence known or applied it beyond basic skills tracking.

The company's managers see potential in IT-enabling human-resources management, but they don't think the packaged applications available today will do the job. The company is considering allowing both managers and employees to use the system to track the skills staffers have and skills they'd like to develop, so the best person can be assigned to a project. That requires a flexible database that can be easily accessed so it stays up to date with workers' changing skills and goals. The company might eventually open the system up to employees to keep their own profiles up to date.

But the IT staff is developing that database in-house, even though the company is trying to use more off-the-shelf software and do less custom development in an effort to cut costs. "There's nothing out there that meets our needs and is mature enough," says an IT executive at the company.

And Liz Gagne, Lincoln's VP of communications, says that while Synygy's incentive-management software is robust enough to handle the complex incentive plans offered to Lincoln's distributors, it could be overkill for managing the pay of regular, non-sales employees.

Still, regardless of whether companies use packaged software or their own tools to better motivate and manage employees, workforce-management software's time may have come--and in these challenging times, not a minute too soon.

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