Cornell University ILR School

DigitalCommons@ILR
CAHRS Working Paper Series Center for Advanced Human Resource Studies (CAHRS)

5-1-1991

Human Resource Management, Information Technology, and the Competitive Edge

Renae F. Broderick
Cornell University

John W. Boudreau
Cornell University

Broderick, Renae F. and Boudreau, John W., "Human Resource Management, Information Technology, and the Competitive Edge" (1991). CAHRS Working Paper Series. Paper 351. http://digitalcommons.ilr.cornell.edu/cahrswp/351

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Human Resource Management, Information Technology, and the Competitive Edge

Renae Broderick

and
John W. Boudreau Working Paper

91-19

Center for Advanced Human Resource Studies Cornell University

This paper has not undergone formal review or approval faculty of the ILR School. It is intended to make the Center research, conferences and projects available to interested in human resource management in preliminary encourage discussion and suggestions.

of the results of other form to

Support for this research came primarily from the Center for Advanced Human Resource Studies. Additional support came from the U.S. Army Research Institute, contract SFRC fMDA-903-87-K001. The views, opinions, and/or findings contained in this article are those of the authors and should not be construed as Center or Official Department of the Army policies, or decisions.

HUMAN RESOURCE

MANAGEMENT,

INFORMATION

TECHNOLOOY,

AND THE COMPETITIVE

EDGE

EXECUTIVE Global make faster competition and better are often is putting business more

OVERVIEW and more pressure on U.S. managers to

decisions.

Investments means

in information up and improving to

technology

touted

as a critical Yet

of speeding distressingly investments. Resources changes

management
realize

decision making.

it has proved technology as Human with

difficult
This .is

the potential

of information areas

particularly longer that HR lead

so in business times

such

(HR),

though

the mean

traditionally candidate into

associated to benefit

in HR systems technology. managers

is a prime

from

information

In order control labor

to pull costs,

the

lead

in global to high

competition, quality,

must

motivate

employees search in the

customer ways

oriented both. a global

performance, These

and continuously must be met employees Even

out new face

and better

of doing and

objectives

of shrinking culturally routine

head

count and

environment throughout keeping this and

in which the globe. legal

are more

diverse tasks

located record in of

the

relatively compliance also demands

of employee

and regulatory complexity

are geometrically more sophisticated

intensified applications tasks.

context. that

Such

technology All better consider and

go beyond thus

simply

improving

the management

of routine

managers their

have

a stake

in exploiting We propose can

information a framework human

technology to help

to

manage

human

resources. technology

managers

how HR information to competitive

improve

resources

management

contribute

advantage.

HUMAN RESOURCE Alice it was could they

MANAGEMENT, never began: quite

INFORMATION make it out

TECHNOLOGY, in thinking is, that

AND THE COMPETITIVE it over afterwards, running,

EDGE how

all she remembers crytng "Faster! they we've

they

were

and.. .the Queen was getting

kept

Faster!"...

till

suddenly, around the

as Alice in great

quite "Why

exhausted,

stopped...Alice been under this

looked tree get

surprise. time!...in -if you

I do believe

whole else-

our country, fast..."

said Alice, "A slow

you'd sort

generally

somewhere the

ran very here,

of country!"

said

Queen. same twice

"Now,

it takes

all the running somewhere Through

you can do, to keep else, you must run

in the

place.

If you want (Lewis

to get Carroll,

at least

as fast..."

The Looking

Glass).

Alice's managers running time

run and

its surprising Accustomed

results

must

strike

a chord else" that

with when their

many

of u.s. fast

firms.

to "getting they

somewhere

in the competitive them in place.

race, Anxious

are now finding others,

best for

only

keeps

to outrace

managers method

search and

the combinations design that yield

of strategy, a competitive search managers manage

motivation, edge:

technology,

and work average

sustainable,

above

business

performance. applications. designed

Their Many

covers

information

technology interested They want

and its management in applications

are especially resources.

to better

human

investments

in such

applications No one

to payoff

by contributing the effects

to firm competitiveness. of information Technology suggests technology in the on a firm's Center can use of to for

has yet proved but

competitiveness, Advanced Human

the HR Information Studies

Project

Resource

at Cornell

how technology on the

enhance

HR contributions information discover

to competitiveness. in HR, learned (HRIS)l, our

Our basic interviews with

research Fortune

technology they've

500 firms

what

from their

investments

in Human

Resource in Human

Information

Systems

and our use of information

technology

Resources
potential involved

(HR) training2 suggests that information technology has enormous

to make HR more this competitive. potential: This paper focuses on one issue

in realizing

the match

between

BR competitive

3
objectives There and the types other of BR computer involved and applications in which a firm invests.

are many such

issues

in realizing

information force

technology's in databases

potential,

as planning

investments and work the

in work design)3.

skills,

and equipment, discussions on them only

and in organization issues

Unfortunately, article; we will touch

of these

is beyond

scope

of this

in passing,

as they

relate

to our major

focus.

The

COmpetitive The

Potential

of Information

Technology technology became a widely

competitive idea in the and

advantage 1980s4. services.

of information

accepted

Computer Citibank

technology had raised Automatic via

had by then the costs

led to creation of entering (ATMs). Business to improve the

of new products consumer American Research management example, specific inventory, meet deposit

market had

by developing locked-in

Teller

Machines

Airlines' Environment decisions computer

customers Information information

its Semi-Automated ability been

(SABRE). with

technology's had also

better

demonstrated. used in

For

applications settings

designed

to inventory enabled also

all the parts managers reducing could

manufacturing purchasing

reportedly costs,

to reduce the time propel a standard needed to

and design

while Such

production

and delivery a strong quality

targets. market

systems

manufacturer of 'low-cost, In HR, products decisions Fortune

into high

position

by redefining

the

industry

producer.' technology can be used to develop been with competitive to improve groups HR in ten

information

or services5, with 500 better

but,

to date,

it has mostly In interviews

used

information. that

the HRIS

firms6,

we found

the majority

had invested

in computer and

applications benefits efficient applications manual the

to manage

employee

records,

payroll, to such

and compensation investments pension

administration. information eliminated

A cornmon payoff management. several At NCR, layers of

was more record entries keeping and

automated 'paper

and pencil'

calculations,

and helped payout

cut pension estimates

administration ninety

costs

by increasing Armstrong

accuracy

of pension

nearly

percent.

4
World's to self benefits insure management and better computer control applications benefit enabled costs the parent company claims HR has

health

via targeted

monitoring. information led managers inventories, Mobil select one

ARCO's improved

investments its accuracy

in computer

systems

to store Better

and process

and timeliness. about how head their

HR information turnover, skills

to ask more

questions ratings

count, units'

or performance managers major

affect

business that

objectives. helped them the

Corporation's among best several

developed work force

computer relocation targets.

applications alternatives NCR's that

to choose

that

met Mobil's developed

cost

reduction

Finance how

and HRIS decisions and profit. forces to

managers about

jointly

a computer in sales can more

application can

shows

hiring

and training line managers objectives.

units

affect hire

sales

revenues sales

Now HR and optimize

effectively

and train

these

These

examples

demonstrate

that

information

technology

can

improve most

HR

administrative, organizational range record narrowly investment information applications-framework

operational, investments

and planning

decisions. technology

Unfortunately, support with of even only

in HR information such

a narrow and

of administrative keeping? focused myopia,

decisions, cases has the

as those

associated potential exploited. managers

payroll these

In many

competitive fully

investments we need

not been

To reduce think about

this how HR

a framework

that

helps

technology can help

--specifically achieve that

different

types

of computer We develop this

competitive follow by:

objectives.

in the

sections

0 Defining 0 Describing designed 0 Matching best

HR competitive types

objectives

and related

decisions; decisions they are

of computer and

applications

and the

to improve;

HR competitive them.

objectives

with

the computer

applications

that

support

5
BR Competitive Schuler EXECUTIVE, drivers Objectives and Related 1987 Decisions in The Academy of Management as primary

and Jackson's three

article

identified

firm-level

competitive Cost

strategies

of HR competitive and

objectives:

Leadership,

Quality/Customer

Satisfaction,

Innovation. strategy, Sources a firm of cost strives advantage access to become include the low-cost of sources

In a Cost producer scale, in its

Leadership industry.

economies supply

proprietary

technology, etc.).

or favored

to important Satisfaction

(people, emphasizes relations Cost that

raw materials, improving as a means

A Quality/Customer work methods, premium with

strategy and customer like the

existing

products/services, prices. cost This

of commanding

strategy, but

Leadership

strategy

is concerned customers'

reductions, of quality

only

in areas

do not directly strategy

affect

perceptions

or value.

The

Innovation operations Innovation Leadership technology methods

emphasizes

differentiation technology,

through

the creation

of new

and management strategy could

methods, yield

or products/services. that support such either as a new

The
Cost

long term Satisfaction

results

or Quality/Customer that makes the

strategies, low cost

firm the

industry's

producer, or service

or new work quality. advantage is, within a

resulting To achieve

in substantial these strategic first apply

increases objectives strategy

in product

and realize

competitive --that

for the the

firm,

HR must itself.

to its own house firms has

HR function work

Restructuring or greater

in most

left

HR with

smaller Time

force,

yet equal

responsibilities as talent What and money. must

and new demands. HR must review

has become

as critical strategic

a resource priorities. better

its work Of that economies and

to define work, which

work

continue

to be done? and

can be done

by searching which

out efficiencies better

of scale

(Cost Leadership); with line managers

can be done

by delegating staffs

collaborating

and employees would

or other most benefit

functional from

(Quality/Customer time, parder, talent,

satisfaction);

and which

creative work

and resources or with

(Innovation)? vision?

In short,

how can HR best

smarter,

more

6
Exhibit decisions streamline 1 illustrates how HR can divide strategy. records, its work and address related HR could

for each

competitive

To achieve payroll, paper

Cost

Leadership, by

processing

of employee

and benefits

standardizing thus becomes

and eliminating the low cost

unnecessary

handling

and reporting. work,

HR

provider

for critical

administrative

as well

as a more

accurate

and timely Satisfaction, more

provider

of HR information. with

To achieve line managers or other

Quality/Customer 'clients', replace standard jointly incentive

HR can collaborate to their

to become

responsive requiring with

needs.

For example, to follow HR and

HR could

a merit

pay process

line managers encouraging

an imposed, to

set of guidelines customize design pay

a system plans

line managers the

increase

for their

units.

HR contributes their would 'hands-on' best

expertise.

Line demands demands.

managers

contribute that

understanding employees allocate short

of customer those

and the rewards Under

motivate HR could uncertain

to achieve 15-20%

an Innovation creative

strategy, projects

of staff

time

to exploratory, HR could thus will reach

with

term

payoffs. to other

Perhaps

new customers HR a profit

by providing center. 1, and

expertise

organizations, work division

making

In most but assigning

cases, HR work

not be so clear Quality/Customer might best

cut as in Exhibit Satisfaction,

to Cost reveals

Leadership, how resources

Innovation one strategy

strategies over

be allocated

to support

another.

Types

of Computer Information

Applications technology with

and the Decisions encompasses hardware,

They

Support and peripherals, manipulate, with improve HR's

software,

providing and

management

increasing across

capacity far flung

to record, geographic applications

store,

communicate by many

information users.

boundaries, that Such can

access ability

We focus

on computer or present

to access, exist

manipulate,

information.

computer alone PCs, or

applications PCs operating

for all types

of hardware

--mainframes,

stand

as a network.

7
We consider Reporting/Tracking Exhibit terms level 2 each of the of the type three types of applications: Systems, is briefly Transaction processing/ Support Systems. in the

Systems,

Expert

and Decision described,

In

of application of the

and classified to address, and

complexity demands

decisions on a user's

it is designed analytic systems demands

it makes

and computer are associated analytic

skills. with and the computer

Transaction least complex

Processing/Reporting/Tracking decisions, Support and the Systems fewest

on user with

skills. Decision
complexity

are associated skills8.

the most

decision

and highest

demands

on user

Match

Computer In Exhibit

Applications 3, we match listed for the

and BR Objectives HR objectives in Exhibit firm.

for Competitive 1 with such

Advantage the types of

from Exhibit how

computer

applications benefits

2 to suggest

matches the

offer potential

competitive benefits with the

The cells

in Exhibit cells

3 show represent illustrate

of these highest benefits.

matches. potential

The diagonal, benefits;

shaded

the matches other

the off diagonals

possible

In the of computer applications objectives

sections

that

follow,

we use HR examples 2, to illustrate

of the the

three

major these HR

types

applications support. and computer

in Exhibit We then

decisions of matching

elaborate

on the benefits

applications.

Transaction

Processing/Reporting/Tracking

Applications applications defined best support and

Transaction routine, outcomes. including: reviewing benefits against by the high

Processing/Reporting/Tracking HR decisions associated overtime with well

volume

information is very Labor

needs

The work

with

such decisions the Fair

common

in HR, Act, pension levels

calculating

pay under

Standards employee payroll been

and documenting at different budgets.

employee

transfers, ages,

calculating

retirement

and comparing these decisions

current have

The rules

governing

predetermined

firm

or by law.

Transaction

processing,

reporting

and tracking

8
applications computer How routine can also be used effectively by people with minimal analytic or

skills. do these applications of these improve the decisions directly information data associated improve with such

tasks?

Some

applications

transaction pay and

processing. benefits quickly can

An application improve

for managing

on employee processing

HR decisions thus

by handling

and reporting firm's pay to

and accurately, obligations.

improving

aggregate

estimates

of the

and benefit decision (including (including typically managers grades handles computer summary managers such and

other

applications access firm),

increase

information from many

available sources formats are

makers

by providing external tables,

easy to the

to information and reporting Such reporting

sources graphs, aimed

it in many applications

and charts). level managers

at higher

and executives. of employees

For example, in exempt pay

frequently by major this

ask about

the distribution

business

divisions.

A sophisticated managers the to type answer

reporting the question to them

application into their

question

by allowing

in English, sentences, to compare

and by reporting statistics, unit

back

in simple enable

and graphs9.

HR tracking

applications goals

or departmental completions,

performance merit

against

in areas turnover,

as performance hires.

appraisal

budget

allocations,

Transaction

Processing/Reporting/Tracking 3 shows, transaction cost

Applications processing,

MATCH

Cost

Leadership

As Exhibit applications that much require

reporting

and tracking --especially those

primarily reducing

support

leadership costs.

objectives They enable of paper

administrative work

HR to decentralize handling while controls.

administrative

and to eliminate standardization, applications

layers

increasing Most

administrative processing

accuracy, enable

and auditing

transaction into

HR information --new Direct hire entry

to be entered information can eliminate record of

directly would several

a computer

at the point unit,

of transaction for example. still provide

be entered layers

by the hiring of paper

shuffling,

yet

an aggregate

9
transactions. other, more These productive processing any applications work, can thus even free up some decrease HR time to pursue count. that warn thus

and may

required

HR head audits

Transaction users when

applications they points,

typically falls

have built-in outside

information at entry

input

acceptable data

ranges,

reducing tracking warnings

errors

and minimizing from

later

checking. early

When

applications that allow

signal faster

deviations

goals,

they

provide For

and more monthly totals, ahead

effective pay

corrections.

example, compare actual allow

one them to

application targeted increases

might

tally

total

increases

allocated, where

annual

pay

increase well

and report

the units

are running

of target. become

Such early costly. can fewer

warnings

HR and

line managers processing, leadership

to act before reporting,

variances

In short, support people. can spend support

transaction cost

and tracking HR work that

applications harder these with

a firm's

goals

by helping suggests

Exhibit innovation

3 also

applications HR must

quality

and

strategies.

By reducing

the time

on routine

administrative
can free time

tasks, transaction processing,

for concentration enable on quality individual often

reporting, tracking applications

issues. reports The more and HR, and

and innovation to customize their for the

advanced maintain

applications special

units

databases,

increasing

satisfaction firm.

with

potentially deviations discoveries strategies.

providing from current

important policy Cost

information goals,

By signaling can even lead to

tracking

applications

supporting

Leadership

or Quality/Customer

Satisfaction

Expert

System Expert

Applications system applications through above, improve expert expert decisions for which the 'right' Like the

outcomes

are determined described

knowledge

and experience. are based of expert expertise

applications but Once firm, the rules

system from

applications analyses this

on rules, decisions. throughout a

are complex, these

derived

careful

programmed, without

applications

can distribute expert.

the presence

of a human

Expert

systems

can be applied

10
to many quality division higher content HR decisions. of recruits recruit For example: from various using historical where data on the number our and new

sources, goals?

should

we recommend factors Should

to meet

its hiring offers

Do labor Coast

market offices?

justify the

professional

salary

in our West training outcome dictate

of performance There

appraisal 'right'

differ

for managers decisions,

in different but experience

units?

is no one within the

for these

and expertise There and

firm will two box' kinds

a specific system

set of alternatives. applications: 'black box'

are at least 'Black without

of expert

'training'. outcome

applications users prompts

simply about

provide

a recommended decision is made.

decision example benefits insurance available minimal

educating is one that personal

how the

An

HR application plan to input

employees (such

covered

by a flexible other package make sources of

information recommends

as their

or income), for their demands

and then fixed

a 'personalized' Such

of options only

benefit

dollarslO. and computer

applications

on user

analytic

skills. users through them a series of

In contrast, questions experts and use

'training'

applications designed

guide

information

displays a decision.

to educate some

on the

reasoning

in reaching help prompts

For example, better

expert

system

applications application important firm Given

line managers the manager --employee norms, the

conduct

performance

appraisals. experts

The
believe bias,

to consider performance special

information history,

that

to appraisal performance

sources

of rater and

or unit this

personal suggests

circumstances, an 'expert' This

so forth.

information,

application may either

appraisal 'training' both

outcome,

which

the manager

use or override. decisions feedback users

application

improves and

managers' interactive

appraisal expert

by providing

recommendations process. their minimal own Such

throughout be analytic

the decision enough system. to diagnose Often, only

applications using

require the

that

situations,

guidelines

of the expert

computer

skills

would

be required.

11
'Black However, box' systems that are, to date, the most have common expert systems. to improve

we believe

'training' expertise

systems with

the most

potential

HR decisions,

by combining

education.

Expert

Systems As shown some

Applications in Exhibit

MATCH

Quality/Customer system

Satisfaction allow firms to and

3, expert

applications

delegate customer delegated designs

of the HR decisions initiatives. so that major

that

are critical systems from

to a firm's can also 'expert'

quality

satisfaction decisions

Expert deviations

enable opinion true building

HR to track or approved of the efforts, the

can be investigated. expert systems.

These Such

strengths could

are especially assist team

'training' for example, management Individual could also

systems

in the

form of training solving could design goals skills review 'custom' tied

modules needed these

that

apply

and demonstrate team work. These

and problem team help members teams

for effective

modules

as needed. evaluations Expert

systems

performance

or compensation systems could pay

programs assist

that team

reflect

to customer

demands. appraisals

members

conducting them know

performance when their

or allocating deviate from

increases designs.

by letting Using

decisions delegate the

approved HR decisions may better to

expert

systems, while

HR could

many

traditional that

responsibilities are informed

to teams,

increasing

likelihood team

team

ones. how the

Moreover, firm's based

by using

expert

systems,

members

understand suggest Such

HR systems

work,

and thus

be better

prepared

improvements then

on the team's part of the

understanding firm's

of customer This

demands. is the

suggestions of people Expert

become

HR expertise.

essence

working

smarter. can also box' type contribute expert to cost that leadership recommended benefits goals.

system

applications a 'black packages can provide thus

Earlier,

we described option systems risk

system

'personalized'

to employees

covered

by a flexible optimize costs

plans.

Such

recommendations controlling also

that

employee for anyone report

demographic benefit

factors, These

an employer's record

option.

systems

accurately

and quickly

12
employee answer redeploy could spread choices. complex staff They may eliminate the need to train HR generalists the firm to to result

questions benefit

on benefits experts

and pensions, use their

or enable time.

and better

The overall

be an increase use of expert appraisal,

in HR productivity. systems --to assist career needed

It is not difficult line managers' development, by a firm, and thus with

to see how widein hiring, could of to

decisions

performance decrease remaining support

promotion,

and so forth-free up the time enhance fewer HR's people. new

the number experts cost

of HR experts other

to support goals systems

issues,

ability

leadership if expert from the

by working liberate

harder HR time

Also, HR practices business

and capture most directly

information in

on

line managers the

and others and

involved can

operations,

new perspectives

information

produced

support

HR innovation

objectives.

Decision

Support

System support

Applications system applications defined, improve decisions for which the

Decision rules such

are changing as: what

or not well right

and the force

'right' hiring

outcomes

are unknown, to produce

is the

level

of sales

and training and skills Which able

maintain the most

optimal

sales? teams

Which

combinations

of people

will

productive

in our major

business

divisions? best

assignments

and career diversity

development and change? support together

experiences

produce

executives

to manage

Decision user to pull

system

applications analyze assist

package

computer

tools

that

allow forms aids

information, and also

it, and represent with

it in many memory

(graphs,

reports,

etc.), Although

the user

electronic HR people

and references. using such

there

are undoubtedly are scarce.

talented

currently

applications,

HR examples group

Perhaps applications
a glimpse a group of decision of users, issue and of

designed support working interest,

to facilitate system

'brainstorming' These applications

offer

potentiaill.

enable

simultaneously, to display

to call this

up a wealth

of information ways,

on the

information

in many

and to consider

13
capture charged in the
ac

new with 90s'

information 'defining might

as it emerges

during

brainstorming. needed

An HR group HR management more quickly of the and

the new competencies

for effective to help them

.

use a brainstorming
on a concrete set of

application
such compe

h Leve '

consensus

tencLes '

12

The

results

one

such brainstorming chooses will

session

suggest

that

the

set of HR competencies of the

group the

reflect would to

a more

thorough

examination

information because and the having

alternatives allows

than

otherwise 'talk'

be possible. by entering group,

Moreover, their

system them

everyone

at once

ideas time

displayed

immediately

to the entire

substantial

savings

can

result.

Decision

Support

Systems

HATCH

Innovation
achieving innovative their strategies time in HR requires and risk of

Exhibit attracting

3 suggests

that

creative User

people,

and

supporting skills but

for research to effective

taking.
decision represent

analytic system

and computer applications, tools

are critical the

use

support powerful

applications users. These They

themselves systems can the help

also can step

exploratory

for such and

up the pace creative, innovation For based

of organizational talent,

discovery support

learning. work,

attract of

analytic more

innovative

and make

fruits

readily

available

to HR and the of helping an HR group

firm. performance those targets targets,

example,

in the process goals, suppose on too

to set team starts

on quality they

to question

guessing Using

are based database

narrow

a view

of customer service design

satisfaction. group and a model to to

a computer

from the

firm's

customer could

statistical predict delivery, suggest

analysis

package,

the HR group from the time

a statistical targets

customer

satisfaction rate,

narrow

performance requests). percentage

(time

low returns that these then related

to fill only

service a modest

If their of customer possible

results

targets

predict

satisfaction, performance from the

the HR group predictors and

might

decide

to explore satisfaction, Using

other

of customer sales groups.

and to solicit data from

ideas

firm's

marketing

computer

14
marketing, one one the HR group sales might force revise promises its model about to include a product two new variables: deliver, The and

representing representing might Thus

what

will

problems

reported improve skilled

during

product

installation.

revised

model

substantially a creative databases and

prediction HR group,

of customer armed with

satisfaction. information from

electronic packages a broader customer and,

in other modeling

functional and analysis,

areas

of the make

firm

and

statistical leading to:

that

allow

might

discoveries

set of the team satisfaction,

performance

targets

more

likely and

to influence installation people, could of an from enable firm's

training

indicators team

for sales skills.

a broader

definition parts

of desirable of the teams firm,

The original made

model part

be tested expert this

in other

revised,

and eventually targets.

system

to assist process

in setting

performance

Spinoffs that to the

modeling

might

include input

external

information

systems

customers databases, in which

to electronically or meetings important charted

team

performance

assessments customer relations

between

team

members

and major

representatives are discussed

variables with the

affecting assistance

team-customer

and visually

of brainstorming system

software. could also lead

As Exhibit to discoveries products, involved

3 shows, that reduce

decision costs,

support

applications innovations that make

or to marketable

in technology, the exploration the prompt

or services. in discovery

These less

applications and time document

are tools consuming, learning.

tedious and that

that

enhance

dissemination support systems

of results, can speed

In short, cycle" feed

decision from

up the organizational to established computer, who

"learning facts that

discovery, routine. also offer

to expert They

judgment,

operating but They they support

do require

research, support

and analytic have these

skills,

considerable working with

to those

skills.

HR people

vision.

staying

in Place We began

Versus

Getting with

Somewhere a quote between from Through staying th~ Looking Glass.

this

article

That

quote

highlights

the difference

in place

and getting

15
somewhere: this more win running faster versus running of the face twice as fast as that. business race, We believe but even to

is an apt characterization so of the that race. needs in the not challenge managers

competitive in applying appears

information

technology daily.

Information to consider firm's only

technology the role

to advance and

almost

Management management in ways

of information strategy, but

information to use firm's these advances to get on

competitive them

in order add to the performance.

that

keep above our

in place,

ability

somewhere, applications Both

to sustain

average framework

industry applies

We have

focused

in HR, but survey work

to all management suggest that the

areas. majority of

and our own research investments computer are

vast

HR information reporting, support

technology

in transaction Though that

processing, these applications can

and tracking leadership in other

applications. we believe

cost

objectives, types

the competitive neglected. and thus, the

potential

of investments that firms

of applications environments They

has been they

We know
in the advantages driven HR

differ

in competitive they

face,

strategic that

objectives

emphasize. in computer

should

not overlook

matching

investments offer

applications

to strategically

objectives

could

them

in the competitive

race. objectives, In our those however, interviews who were and good equipment the is only with most

Matching part the

computer

investments

and strategic

of realizing HRIS groups

information in ten Fortune

technology's 500 firms, technology

potential. we found made that

successful organization information available

in using

information

additional

system

development databases,

investments. updating

These

included:

developing computer

operating

software, about

making

to critical

users,

educating

users

computers,

developing

organizational relationships

expertise with other

to manage information

information technology

technology, users

building firm, and so to and

in the

forth. The magnitude

vary work with HR's

and timing emphasis,

of these

additional the

investments structure,

appeared culture,

strategic

and with

firm's

force.

16
A complete article. critical treatment some of these investments is beyond the scope of this

We can offer to the

observations implementation First,

from our research of the three transaction

about

conditions

successful

types

of computer reporting applications, of users. good experts, and

applications tracking

we have

discussed. require

processing, and the range

applications must

comprehensive and easy good

databases,

themselves, Expert

be available

to use expert

for a wide system

system

applications

require

builders,

and user require and

confidence good analysts

in system

recommendations. high

Decision support systems

quality comprehensive and innovation. (net) valued added and databases,

and researchers, climate out receptive that

an organization Finally,

to research

we point competitive

estimating possible

the true from

the

sustained

advantages measures

information

technology

investments these

requires

concrete

of their

benefits to cost

and costs. leadership,

Viewing

investments

in terms

of their

contributions

quality/customer benefit concrete

satisfaction, The more remains.

or innovation difficult,

can point

to potential work

areas

of

measurement. measures

but critical

of establishing

still

ENDNOTES
1. We define data bases, Human computer Resource Information Systems or HRIS and as the composite necessary data to for HR. of

applications, manage, "Building

and hardware present, Human

software

collect/record, 2. See J.W. Curriculum University," Relations

store,

deliver,

and manipulate Resource Relations, Meeting

Boudreau, at the

a PC-Based

Management Cornell of the Industrial WI:

School

of Industrial of the Forty

and Labor Second

proceedings

Annual

Research

Association,

December,

1990,

441-453.

(Madison,

Industrial Relations Research Association)~

"Human Resource Automation Paper for Competitive #90-04, Center Relations,

R. Broderick and J. W. Boudreau,

Advantage: Case Human Studies Resource G.T. of Ten Studies, Milkovich

Leaders," School

Working

for Advanced Cornell

of Industrial

and Labor

University~

17
and J.W. (Plano, Boudreau, TX: Business Personnel/Human Publications, Resource 1991). of organization HRIS and system see R. Management: A Diagnostic Approach,

3. For more development

information considered

on the dimensions important

in successful

investments

Broderick
4. There

and J.W. Boudreau, endnote 2.

was a spate of articles competitive on information potential technology, computer For examples

applications

and their

in 1984

and 1985.

see F. W. McFarlan,

"Information Technology Changes the way You Compete",

; M. Porter, 116-172; K.C. competitive Laudon and J.P (New York,

Harvard Business Review, May-June, 1984,

Advantage, Laudon, NY: (New York, NY: Free Press, Systems: 1985),

Management

Information 61-82.

A Contemporary

Perspective,

MacMillan,

1988),

5. For example, system designed

Tesseract

developed

the

first

relational and

database for many

management years has

specifically for such

for HR and mainframes, systems. interviews

dominated

the market

6. For more Boudreau, 7. See

information 2.

on these

see R. Broderick

and J.W.

endnote

surveys

of HRIS Personnel

in many

firms,

such

as: C. Richards-Carpenter, Survey Peat Results, Marwick, TX: KPMG 1989." COmputer Peat

"The Personnel Usage In

Computerized Management, Human 1988)

8.
.

Information

Systems

August,

1989,

21: 48-49;

and KPMG

Resources:

A Competitive

Advantage.

(Dallas,

Marwick,

See K.C. Laudon and J.P. Laudon, endnote 4, 34.

in data voice capturing capabilities may soon enable Systems) users to ask

9. Developments questions (Optical using

commands

(Voice

Recognition

or hand

writing

Character

Recognition

Systems).

10. See J.M. Hannon, G.T. Milkovich, and M.C. Sturman, "The Feasibility
Using Expert Systems in the Management Human Resource of Human studies, Resources," School Working

of
#90Labor

Paper and

19, Center

for Advanced

of Industrial

18
Relations, system Cornell University, currently software for a more used used detailed description of expert

applications

in HR management. in the jointly IBM Executive developed Development labs at

11. The brainstorming Cornell

is "GROUPSYSTEMS".

It was

by IBM and the University

of Arizona. 12. Such a brainstorming Human session was recently conducted and at Cornell with HR 500 firm. Center

for Advanced managers,

Resource

Studies staff

researchers,

line managers, of a Fortune

and other

functional

representatives

Author Bios
Renae Broderick Human is currently Resource a Senior Research Associate in the Center for at

Advanced Cornell personnel

Studies,

School

of Industrial

and Labor

Relations and

University. strategy

Her professional and planning; teaching

experience

is in compensation both

it includes and research planning work

consulting

independently Graduate School at

and

for The Wyatt of Management, General examines other She Motors, the

Company, U.C.L.A.,

at the Anderson work

personnel

on the corporate Morris, USA. Her

staff

and HR generalist of compensation,

at Philip resource

research and goals.

role

human

information strategy strategy

systems, and design and pay for

personnel

systems several

in achieving articles

organizational on compensation research ideas

has published plans,

performance such

and has presented Compensation holds

to professional Resource

groups Planning College, from

as the American Dr.

Association

and the Human

Society. and

Broderick (1978)

a B.A.

in psychology of Minnesota

from Macalester and Ph.D.

her M.A. both

from the University Resources/Industrial

(1986)

Cornell,

in Human

Relations.

John Human

W. Boudreau Resource

is Associate Studies

Professor

and Department Human

Chair

of Personnel Studies, Professor from the on in

and

in the Center and Labor

for Advanced Cornell

Resource

School Boudreau Krannert

of Industrial received Graduate

Relations,

University.

his Ph.D. School

in Industrial

Administration University.

in 1982

of Business, making,

Purdue

His research appears

cost-benefit scholarly Psychology, Decision Pacific

analysis, journals such

decision

staffing

and automation Journal

as Personnel Relations,

Psychology,

of Applied and Human Asia and

Industrial

and Organizational to Computers

Behavior

Processes. Human Resource

He has contributed Management, He serves Personnel

in HR Management, Handbook

and the ASPA/BNA on editorial boards

of Personnel of

Industrial Applied conducted measurement IBM, Kodak,

Relations.

for the Journal Journal. making,

Psychology, research and

Psychology, on human with

and Personnel resource such

He has

and consulted

decision

information NYNEX,

systems and TRW.

companies

as Chevron,

Corning,

Mobil,

..'

..-

..

TRANSACTION

PROCESSING/REPORTING/TRACKING
High Volume Sorts, Lists,

SYSTEMS
Merges

BEST AT:

Editing
Simple Calculations Information & Spotting Discrepancies

Displaying Auditing

EXPERT

SYSTEMS

I
r;
BEST AT: Codifying Knowledge & Experience
U.I

~ ~ ~ ~
~
~

Distributing Recommending Educating

Expertise Action

U.I ~ 1-1 ~ U.I ~ I!Q U.I P ~

~
DECISION SUPPORT SYSTEMS BEST AT:
II

U.I

~ CJ

\iI:1 0

I Q

Supporting optimizing Speeding

Research Decision Up Discovery Alternatives

II

:= CI ~ :=

J
Exhibit Types of Computer 2 Applications

v ~ 1-1 :=

FIRM Cost Leadership

LEVEL

COMPBTITIVE

STRATEGIBS Satisfaction Innovation

Quality/CUstomer

BR Competitive Objectives

Higher output labor cost

PEOPLE

for given

Continuous

improvement

Workable

discoveries

WORKING HARDBR

PEOPLE

WORKING SMARTER

PBOPLE

WORKING

WITH

VISION

BR Decisions and Actions

Streamline Standardize Decrease production time/headcount Reduce costs (e.g. increase accuracy)

Educate line managers and other 'clients' Delegate/share decisions Use customer driven performance criteria Increase flexibility

Define vision Attract creative talent Reward risk Provide opportunities/tools for exploration

BR Division of Work

Administration

Operations

Planning/Creative

Bxhibit BR Competitive Objectives

1 and Related Decisions

TYPES OF COMPUTER APPLICATIONS DR Competitive Objectives

Transaction Processing! Reportingffracking Systems

Expert Systems

Decision Support Systems

Cost Leadership: People Working Harder

. . ..... "... ..:::::::::::::::;:::::::::.:::::::::::::::::::.:::::::" """" "'..", """'" ''''''..' '".".".',",'.",", ."."..";.",',',", ...

n"

...0. .. ...". n.".. "... ".."." .. ..",".'.'.',"..".",.".'. ",','.. ''''. '.,".".'.',".'..."."... '

. Decreases need for HR . Helps spread database and

experts
training costs over entire

. Increases

chance of

innovation for HR cost controls

workforce
.. ... "'"

.. . . . .. ..

Quality/Customer Satisfaction: People Working Smarter

. Increases

"

time for HR quality

".".",",'."."

. Increases

chance of

initiatives Enablescustom reportsand dataentry

innovations for HR quality/customer satisfaction

. Increases awareness of HR

infonnation and can lead to its improvement

Innovation: People Working with Vision

Increases time for HR

innovation . Awareness of goal deviations sparks discoveries

. Increases time for HR innovation . Line understanding of HR

sparkscollaborationand discovery

':'::::::..."'!:':::"':':.'::";:':.':!:::':'::';::::':.::'::.:j;"::':::':"::':::::"":"::::::':::j::::..:':::[,..':"":1:::':':;':::::::1":;::::::..

..........
. ",".

""

-.
...'

...

-.....
.".".","."',".',',".".".."

Exhibit 3 Matching Computer Applications with HR Competitive Objectives