Strategic Core Hr System

8/4/2019 Strategic Core Hr System

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The Strategic Development of

Core HR Systems

Helping Leaders Go Beyond Administrivia and Compliance

September 2007
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The Strategic Development ofCore HR SystemsPage 2

2007 Aberdeen Group. Telephone: 617 723 7890

www.aberdeen.com Fax: 617 723 7897

Executive Summary

Human Resource (HR) information systems have been around for quitesome time, and most companies are already utilizing some form of a

solution for their payroll and record keeping requirements. However, theincreasing demands of managing ever more complex workforces has createda variety of new solutions companies can adopt to save time, money, andincrease employee satisfaction.

Best-in-Class Performance

Aberdeen used three key performance criteria to distinguish Best-in-Classcompanies:

Error rate of computing incentive compensation payments

Error rate of processing standard payroll

Error rate of processing bonus period payroll

Competitive Maturity Assessment

Survey results show that the firms enjoying Best-in-Class performanceshared several common characteristics:

Secure sensitive data (79%)

Store HR records in a central, accessible location (77%)

Satisfaction with the existing HR system (74%)

Required ActionsIn addition to the specific recommendations in Chapter Three of thisreport, to achieve Best-in-Class performance, companies need to:

Secure your investment. Recognize the importance of the datacontained within an HR System, and work to secure it.

Test processes before implementing. By adding a preview function,companies can avoid costly, timely, and aggravating errors.

Think strategically. Using the data you have to better understandtrends and performance levels can provide a level of insight that isunparalleled.

We decided to integrate ourvarious paper-based HRsystems, and even take payrollin-house. Since doing this, weincreased our departmentofferings by over 50%. Wevealso noticed a positive impacton our employee retentionrate. The new system hasallowed use to act and thinkmore strategically, and hasmade us more valuable to thecompany overall.

~ HR Manager, Midsized

Healthcare Provider
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Table of Contents

Executive Summary....................................................................................................... 2Best-in-Class Performance......................................................................... 2Competitive Maturity Assessment........................................................... 2Required Actions ......................................................................................... 2

Chapter One: Benchmarking the Best-in-Class .....................................................4HR Systems: A Balancing Act.................................................................... 4

Pressures Faced ....................................................................................... 4The Maturity Class Framework................................................................ 5The Best-in-Class PACE Model ................................................................ 5

Actions Taken .......................................................................................... 6Efficiencies Experienced ......................................................................... 6Satisfaction Achieved.............................................................................. 7

Chapter Two: Benchmarking Requirements for Success ....................................9Competitive Assessment............................................................................ 9Organizational Capabilities and Technology Enablers ....................... 10

Breadth of Coverage ............................................................................ 11Technology Enablers............................................................................. 12

Chapter Three: Required Actions .........................................................................14Laggard Steps to Success.......................................................................... 14Industry Average Steps to Success......................................................... 14Best-in-Class Steps to Success................................................................ 15

Appendix A: Research Methodology.....................................................................16Appendix B: Related Aberdeen Research............................................................18Figures

Figure 1: Top Pressures Driving HR System Initiatives........................................4Figure 2: Top Strategic Actions of Best-in-Class ...................................................6Figure 3: Time Spent Managing HR System During the Past Year ....................7Figure 4: Satisfaction with Existing HR System ...................................................... 7Figure 5: Best-in-Class HR System Capabilities ...................................................11Figure 6: Coverage Areas of Best-in-Class HR Systems...................................12Figure 7: Top Technology Enablers of Best-in-Class HR Systems...................13Tables

Table 1: Companies with Top Performance Earn Best-in-Class Status ...........5Table 2: The Best-in-Class PACE Framework .......................................................5Table 3: Performance Ratings of Excellent.............................................................. 6Table 4: The Competitive Framework...................................................................10Table 5: The PACE Framework Key ......................................................................17Table 6: The Competitive Framework Key ..........................................................17Table 7: Relationship Between PACE and the Competitive Framework ......17


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Chapter One:

Benchmarking the Best-in-Class

HR Systems: A Balancing ActCore data management is the cornerstone of every Human Resource (HR)operation. How organizations collect and maintain accurate standards andcontrols of the basic building blocks of employee management strategies iscritical to the success of an organization. Prior Aberdeen research showsthat balancing the level of service provided by HR with controlling costs isan important component of a Human Capital Management (HCM) initiative,and that enhancing and integrating current technology to better address theentire life cycle of the employee remains a key strategic focus. Howcompanies are doing this varies widely, but finding the right balance remainsa thorn in the side of HR experts.

Pressures FacedCompanies, across the board, are facing a variety of pressures in regards tomanaging their HR resources, with the top three being:

The need to quickly adapt to business and market changes

Managing increasingly complex employer / employee relationships

Containing rising costs

Other factors (such as retaining employees, concerns about the size of theavailable pool of labor, and globalization) are also driving HR systeminitiatives, demonstrating the tactical and strategic landscape of currentHCM operations.

Figure 1: Top Pressures Driving HR System Initiatives

25%

26%

36%

43%

55%

0% 10% 20% 30% 40% 50% 60%

Shrinking labor

pool

Employee

retention

Rising costs

Complex employee

relationships

Adapt to business

& market changes

% of Respondents Identifying Pressure

All Respondents

Source: Aberdeen Group, September 2007

How Best-in-Class companies proactively respond to these pressuresdemonstrates their ability to successfully stay on top of their game, ahead of

Fast Facts

74% of Best-in-Classcompanies report beingvery or somewhat satisfiedwith their current HRsystem

26% of Best-in-Classcompanies report spendingless time managing theirHR systems during the past12 months, while only 6%

of Laggard companiesreport the same

Only 23% of Laggardcompanies rate their abilityto process a bonus payrollperiod as excellent

We had so many errors, allthe time. It was a nightmare tohave to go back and fix things,over and over again. Peoplewere not happy with us at all.

~ Payroll Manager, SmallIndustrial Manufacturer


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the curve, and provide a superior level of service and consulting to theirorganization.

The Maturity Class Framework

Aberdeen used three key performance criteria to distinguish Best-in-Classcompanies from Industry Average and Laggard organizations:

Error rate of computing incentive compensation payments

Error rate of processing standard payroll

Error rate of processing bonus period payroll

Table 1: Companies with Top Performance Earn Best-in-Class

Status

Definition of

Maturity Class

Mean Class Performance

Best-in-Class:

Top 20% ofaggregate

performance scorers

Error rate calculating bonus and / or compensationpayments .5%

Error rate processing normal payroll .59%

Error rate processing bonus period payroll .51%

Industry Average:

Middle 50% ofaggregate

performance scorers

Error rate calculating bonus and / or commissionpayment of3.8%

Error rate processing normal payroll 3.2%

Error rate processing bonus period payroll 3.1%

Laggard:

Bottom 30% of

aggregateperformance scorers

Error rate calculating bonus and / or commissionpayment more than 5%

Error rate processing normal payroll more than 5%Error rate processing bonus period payroll more

than 5%


The Best-in-Class PACE Model

To achieve Best-in-Class performance, as outlined in Table 1, requires acombination of strategic actions, organizational capabilities, and enablingtechnologies, as illustrated in Table 2.

Table 2: The Best-in-Class PACE Framework

Pressures Actions Capabilities EnablersIncreasingly

complexemployee /employerrelationships

Add strategicfunctionality tocore HR processes

Increase efficiencyof HR processes

Retrieve basic employee informationquickly

Secure sensitive data

Preview actions before implementation

Store all HR records in a central location

Security tools

Reference materials / data base

Performance reviews

Employee communications portal

On-boarding interface

Issue resolution tools


I cant tell you how difficult itwas for us to retrieve thesimplest pieces of informationbefore we implemented thenew system. Forms were keptall over the place, in differentbuildings, departments, and noone ever knew where anythingwas. Now we can almostinstantly find what we need

~ HR manager, Mid-sizeBeverage Manufacturer


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Actions Taken

While Best-in-Class organizations indicate the same top two strategicactions as all respondents, they were more likely to identify the need to addstrategic functionality to core HR processes. The overall sample of

respondents was more likely to focus on increasing efficiency than addingstrategic functionality.

Figure 2: Top Strategic Actions of Best-in-Class

18%

26%

26%

50%

50%

0% 10% 20% 30% 40% 50% 60%

Educate HR staff and end-users to

better utilize the existing HR system

Integrate company business

systemsto consolidate processes

Improve data accuracy

Increase efficiency of HR processes

Add strategic functionality to core HR

processes

% of Respondents Identifying Action


Efficiencies Experienced

Best-in-Class organizations report a higher level of performance in critical

processes than companies identified as Industry Average or Laggard.

Table 3: Performance Ratings of Excellent

Best-in-ClassIndustry

AverageLaggard

Process a standard payroll 64% 47% 33%

Process a bonus payroll period 59% 29% 23%

Implement a change in status

for an employee59% 40% 31%

Process a salary increase 59% 40% 33%

Update an employee record 47% 38% 33%

Approve tuition payment 39% 13% 10%

Communicate changes to HRprocesses company-wide

26% 20% 14%


We needed to find a way tosave time and automate ourantiquated system. We knewthere would be a lot of benefitsto the new system, but wewere surprised at how wellreceived it was company wide. Icant think of anything we haveever rolled out that was so well

received. Everyone benefitsfrom using it.

~ HR Supervisor, MidsizeInsurance Provider


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Best-in-Class organizations also spend less time managing their HR systems,with 26% reporting they spend less time managing their systems during thepast 12 months. Forty-four percent (44%) of Industry Average companiesand 36% of Laggard companies report spending more time managing their

HR systems.

Figure 3: Time Spent Managing HR System During the Past Year

26%

15%

50%

18%

44%

36%

6%

36%

60%

0%

10%

20%

30%

40%

50%

60%

Decre as ed Incre ase d Sam e

Be st-in-Clas s Ave rage Laggard

% of Respondents Identifying Time Spent


Satisfaction Achieved

Perhaps most tellingly, a full 74% of Best-in-Class companies report beingvery or somewhat satisfied with their existing HR system, while just 54% ofIndustry Average companies report the same, along with only 45% of

Laggard companies. Whats even more compelling is that only 9% of Best-in-Class companies report being dissatisfied with their current HR system,compared to 39% of both Industry Average and Laggard companies.

Figure 4: Satisfaction with Existing HR System

74%

54%

45%

9%

39% 39%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Best-in-Class Average Laggard

Very or Somewhat Satisf ied Very or Somewhat Dissat isf ied

% of Respondents Indicating Satisfaction


Consolidating everything intoa single system helped us cutcosts, save time, and betterunderstand our entireoperation.

~ HR Director, LargeTechnology Provider


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Aberdeen Insights Strategy

Core HR systems have long been considered a back-end, turn-key process,

with little added value. Newer versions, however, are providing a higherdegree of functionality that can leverage the existing data, reduceduplication of effort, and allow HCM practitioners to have a level ofstrategic functionality rarely experienced before. Best-in-Class companiesare recognizing this benefit sooner than other organizations, and arereaping at least some of the benefits. Productivity, streamlined operations,and lower rates of error collectively provide a significant time savings, anda greater level of satisfaction among users throughout the organization.

In the next chapter, we will see what the top performers are doing toachieve these gains.


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Chapter Two:

Benchmarking Requirements for Success

The selection of HR systems plays a crucial role in the ability of HCMpractioners to effectively convert their strategic actions into actualperformance capabilities. HCM experts are looking for new ways to bettermanage the transactional and administrative portions of their overallmission, in order to focus on more strategic initiatives that will help theorganization maneuver successfully in the increasingly competitivemarketplace.

Case Study - Lenexa, Kansas Saves Time and Money

Take, for example, the case of the City of Lenexa, Kansas. Thismunicipality, with a population of just over 40,000, employs 400 full-time

workers, and an additional 100 part-time workers. In order to providethe best level of service and offerings to its employees, the director ofhuman resources, set out on a grueling evaluation of human resourcemanagement systems.

After determining the system requirements for the city, a comprehensiveRequest for Proposal (RFP) was sent to 10 leading solution providers.After short-listing four vendors, Lenexa conducted on-sitedemonstrations, reference checks, and site visits, a decision was finallymade. The implementation consisted of training priorto the system goinglive, to bring everyone up to speed in an organized fashion.

Lenexa has experienced a number of benefits with the new system, in

addition to greater productivity, and a wider range of informationavailable to a broader group of users. The city estimates that it willexperience cost savings of $67,000 during the first year ofimplementation, and $182,000 the next year, with a five-year total ROI ofnearly $800,000.

Competitive Assessment

The aggregated performance of surveyed companies determined whetherthey ranked as Best-in-Class, Industry Average, or Laggard. In addition tohaving common performance levels, each class also shared characteristics in

five key categories: (1) process (the ability to detect and respond tochanging conditions without placing additional burdens on the organization);(2) organization (corporate focus and collaboration among stakeholders);(3) knowledge management (contextualizing data and exposing it to keystakeholders); (4) technology (the selection of appropriate tools and theintelligent deployment of those tools); and (5) performance measurement(the ability of the organization to measure the benefits of technologydeployment and use the results to improve key processes further). Thesecharacteristics (identified in Table 3) serve as a guideline for best practices

Fast Facts Best-in-Class companies

are more than 1.5-timesas likely to identify thenumber of HR transactionsduring a given time period

56% of Best-in-Classcompanies considersecurity tools to be criticalcomponents of their HRsystems

Consolidating everything intoa single system helped us cutcosts, save time, and betterunderstand our entireoperation.

~ Kim Marshall, Director oHuman Resources, City o

Lenexa, Kansa


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and correlate directly with Best-in-Class performance across the keymetrics.

Table 4: The Competitive Framework

Best-in-Class Average Laggards

Record key life event changesProcess

65% 57% 48%

Store all HR records in a central locationOrganization

77% 61% 52%

Audit trail for HR transactions

65% 58% 48%

Secure sensitive dataKnowledge

79% 72% 67%

HR systems technology currently in use

Technology

44%performancemanagement

23% on-

boardinginterface

21%issue

resolution tools


14% on-

boardinginterface

10%issue

resolution tools


11% on-

boardinginterface

9%issue

resolution tools

Identify the number of HR transactions during a given time

periodPerformance45% 41% 28%


Organizational Capabilities and Technology Enablers

The essential ingredients of a well-designed HR systems strategy balance theneed for accurate, secure data (security tools, audit trails, storing data, etc.)and the flexibility of a robust system (accessing information, processingchanges, previewing actions, etc.) Best-in-Class companies are able toimplement this functionality while maintaining a broad range of offerings

We operate in over 20countries, and have close to500 separate offices worldwide.We really needed a system thatwas flexible enough to handle

our needs, but simple enoughthat people could and would

use it.

~ Director of HR, LargeProfessional Services Firm


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Figure 5: Best-in-Class HR System Capabilities

65%

65%

69%

74%

76%

79%

79%

79%

40% 50% 60% 70% 80%

Audit trail for HR transactions

Record key life event changes

Administer benefit plans uniformly

Store all HR records in central location

Process em ployee record changes

efficiently

Preview actions before

implementation

Retrieve basic employee information

quickly

Secure sens itive data

% of Respondents Identifying Capability


Breadth of Coverage

Best-in-Class companies are able to implement these core capabilities whilealso maintaining a broad range of offerings. While record keeping, payroll

processing, and payroll deductions are the leading areas of coverage forBest-in-Class organization HR systems, more than half also offer solutionsaround employee performance management, benefits management, absencemanagement, and time and attendance. Additionally, Best-in-Classcompanies indicate concrete plans to implement functionality in the areas ofcompliance, incentive compensation, recruitment, competency management,learning management, and salary planning.

We took the opportunity toroll out the new system toreally make it vital resource forall employees. It became thecentral hub of all employee-related information. Using thesystem to make sure we wereletting everyone know whatwas going on has helped usstreamline a lot of our HRprocesses.

~ HRIS Manager, Large

Financial Services Firm


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Figure 6: Coverage Areas of Best-in-Class HR Systems

44%

45%

55%

70%

64%

72%

65%

85%

85%

82%

21%

21%

15%

9%

15%

9%

19%

3%

3%

12%

0% 20% 40% 60% 80% 100%

Recruitment

Incentive

Compensation

Compliance

Time &

Attendance

Absence

Management

Benefits

Management

Employee

Performance

Payroll

Deductions

Payroll

Processing

Employee

Records


Current Planned


Technology Enablers

Best-in-Class organizations are primarily utilizing HR systems tools thatassist with security concerns (56%), referencing needs (47%), employeeperformance management (44%), manager self-service (41%), and employeecommunications (38%). The most planned for technology enablers includemanager and employee self-service interfaces (39%), assessment testing(36%), on-boarding interface (33%), salary planning tools (33%), andemployee performance management (33%).

We are very pleased with thespeed and quality of theinformation we now provide.The capabilities of our systemallow us to report regularly tosenior management. This typeof thing used to take us days toput together. Now it is done ina few minutes.

~ HR Analyst, MidsizeEducation Facility


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Figure 7: Top Technology Enablers of Best-in-Class HR Systems

44%

45%

55%

70%

64%

72%

65%

85%

85%

82%

21%

21%

15%

9%

15%

9%

19%

3%

3%

12%

0% 20% 40% 60% 80% 100%

Recruitment

Incentive

Compensation

Compliance

Time &

Attendance

Absence

Management

Benefits

Management

Employee

Performance

Payroll

Deductions

PayrollProcessing

Employee

Records


Current Planned


Aberdeen Insights Technology

A company does not need to use a technology solution to maintain its HRsystems but they certainly help! Hand-writing checks for a more than2,500 employees on a regular basis would prove to be a dauntingendeavor. So, while paper records, forms, and manual payroll processesare all in use to some degree at 79% of companies surveyed, company sizedictates the use of technology systems in order to obtain an efficiency ofscale. Best-in-Class companies use a variety of solutions in order tofacilitate their HR systems:

Licensed, internal HCM or Human Resource Information Systemssoftware (74%)

Internal, licensed ERP software (42%)Outsourced, externally managed applications (31%)On demand, Software as a Service (Saas) HCM or HRIS software

delivered via the Internet (30%)Hosted HCM applications, purchased by the company but managed and

hosted offsite by a third party (21%)

I love just being able to log on

and make a quick changewithout having to go throughthe hassle of dealing with HRevery single time. (They arelocated on the other side of thecountry, which can be a bigpain.)

~ Operations Manager, MidsizeUtility Company


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Chapter Three:

Required Actions

Whether a company is trying to move its performance in HR systems usagefrom Laggard to Industry Average, or Industry Average to Best-in-Class, thefollowing actions will help spur the necessary performance improvements:

Laggard Steps to Success

Secure your investment. Recognize the importance of the datacontained within an HR system, and work to secure it. Laggardcompanies report being less likely to use security tools, or to storeHR data in a central location. This haphazard approach to datamanagement can lead to significant problems company-wide, anddoes not lay a solid foundation for growth.

Measure performance. Laggard companies arent measuring therates of error in their key HR system processes, and are less likelyto produce an audit trail for HR transactions. Knowing how you aredoing, and where you are failing, is an important part of improvingperformance. Until measurement systems are in place, Laggardcompanies are operating in the dark.

Recognize the big picture. Only 35% of Laggard companies reportthat adding strategic functionality is a priority to enhance their HRsystem performance, compared with 50% of Best-in-Classcompanies. Not surprisingly, only 16% of Laggard companies canproactively evaluate the necessary actions and next steps.Recognizing the strategic value of an HR system, and then doing

something with the information contained within it, can provide aLaggard company with the necessary insight to improveperformance across many areas.

Industry Average Steps to Success

Test processes before implementing. Just 53% of Industry Averagecompanies preview key HR systems actions (payroll processing,deductions impact, incentive compensation amounts, etc.) beforeimplementation, compared with 79% of Best-in-Class companies. Byadding a preview action, Industry Average companies can avoidcostly, timely, and aggravating errors.

Think strategically. Only 23% of Industry Average companies reportusing workforce analytics tools of any kind. Using the data you haveto better understand trends and performance levels can provide alevel of insight that is unparalleled.

Dont rely on technology to solve all your problems. IndustryAverage companies are planning for manager and employee self-service tools more than Best-in-Class or Laggard companies. Whilethese tools are helpful, they merely facilitate a process, they dont

Fast Facts

Best-in-Class HR systemadopters measure theirperformance, in terms oferror rates and audit trails,more than Industry Averageand Laggard companies

Best-in-Class systemadopters protect and storetheir HR system data in amore secure manner thaneither Industry Average orLaggard companies


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reinvent a failing system. Industry Average companies need torecognize that simply implementing a new technology does notprovide the fullest range of benefits. Rather, they must build thesystem to meet their strategic needs, and deploy it accordingly.

Best-in-Class Steps to Success

Know where you are going. Best-in-Class companies report avariety of planned enhancements to the functionality of their HRsystems: it is important that these enhancements actually providevalue, and arent just whiz-bang additions. While robustcapabilities and enablers can add a great deal of value, make surethat they are part of the mission of the organization, not just a newoffering.

Reflect on the data. While Best-in-Class companies are more apt toutilize workforce analytics as part of their HR system than Industry

Average or Laggard companies, only 36% of the companiesidentified as Best-in-Class are currently using an analytics solution.Once implementing and monitoring the performance of HR systemsis accomplished, taking the data and using to determine even moreways to improve can be a strategic advantage.

Leverage the system for all employees. Just 23% of Best-in-Classcompanies report having an on-boarding interface as part of theirHR system, and only 21% use the system for assessment testing.Given that 77% of Best-in-Class companies report either having, orplan to have, employee performance management as part of theirHR system, not proving these critical tools seems short-sighted.

Aberdeen Insights Summary

HR systems provide robust and efficient solutions for companies of allsizes. Their scope and breadth of functionality vary by organization, yetthey, the core, are the cornerstone of every HCM operation. Properlydesigning, implementing, and maintaining these systems can allowcompanies to engage and nurture their employees and critical processes;neglecting these systems can result in, at best, loss of a competitive edgeand increased employee dissatisfaction, or, at worst, fines, lawsuits, andunnecessary costs.
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Appendix A:

Research Methodology

Between August and September 2007, Aberdeen Group examined the useof HR systems at approximately 200 organizations.

Responding executives completed an online survey that included questionsdesigned to determine the following:

The range of functions respondents include in their core HRsystems

Current and anticipated performance levels among key HR systemdrivers

The benefits, if any, that have been derived from HR systemtechnology solutions

Aberdeen supplemented this online survey effort with telephone interviewswith select survey respondents, gathering additional information on HRsystems strategies, experiences, and results.

The study aimed to identify emerging best practices for HR system use andto provide a framework by which readers could assess their owncapabilities.

Responding enterprises included the following:

Job title / function: The research sample included respondentsfrom the following functional areas: human resources (59%); salesand marketing (6%); operations (5%); and strategic development

(5%). Respondents reported the following range of job titles:manager (29%); director (22%); chief HR officer (12%); and seniormanagement: CEO or president (12%).

Industry: The research sample included respondents exclusivelyfrom retail industries. Consumer Packaged Goods (CPG) was thelargest segment with 42% of the sample.

Geography: The majority of respondents (77%) were from NorthAmerica. Remaining respondents were from the Asia-Pacific region(11%), EMEA (9%), and South / Central America (3%)..

Company size: Twenty percent (20%) of respondents were fromlarge enterprises (annual revenues above US$1 billion); 30% were

from midsize enterprises (annual revenues between $50 million and$1 billion); and 50% of respondents were from small businesses(annual revenues of $50 million or less).

Solution providers recognized as sponsors of this report were solicited afterthe fact and had no substantive influence on the direction of the HR systemsbenchmark report. Their sponsorship has made it possible for AberdeenGroup to make these findings available to readers at no charge.


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Table 5: The PACE Framework Key

Overview

Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, andenablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows:

Pressures external forces that impact an organizations market position, competitiveness, or business operations (e.g.,economic, political and regulatory, technology, changing customer preferences, competitive)

Actions the strategic approaches that an organization takes in response to industry pressures (e.g., align thecorporate business model to leverage industry opportunities, such as product/service strategy, target markets, financialstrategy, go-to-market, and sales strategy)

Capabilities the business process competencies required to execute corporate strategy (e.g., skilled people, brand,market positioning, viable products/services, ecosystem partners, financing)

Enablers the key functionality of technology solutions required to support the organizations enabling businesspractices (e.g., development platform, applications, network connectivity, user interface, training and support, partnerinterfaces, data cleansing, and management)


Table 6: The Competitive Framework Key

Overview

The Aberdeen Competitive Framework definesenterprises as falling into one of the following threelevels of practices and performance

Best-in-Class (20%) Practices that are the bestcurrently being employed and significantly superior to

the Industry Average, and result in the top industryperformance.

Industry Average(50%) Practices that represent theaverage or norm, and result in average industryperformance.

Laggards(30%) Practices that are significantly behindthe average of the industry, and result in below averageperformance

In the following categories:

Process What is the scope of process standardization?What is the efficiency and effectiveness of this process?

Organization How is your company currentlyorganized to manage and optimize this particular process?

Knowledge What visibility do you have into key dataand intelligence required to manage this process?

Technology What level of automation have you used tosupport this process? How is this automation integratedand aligned?

Performance What do you measure? How frequently?Whats your actual performance?


Table 7: Relationship Between PACE and the Competitive Framework

PACE and Competitive Framework How They Interact

Aberdeen research indicates that companies that identify the most impactful pressures and take the most transformationaland effective actions are most likely to achieve superior performance. The level of competitive performance that acompany achieves is strongly determined by the PACE choices that they make and how well they execute.



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www aberdeen com Fax: 617 723 7897

Appendix B:

Related Aberdeen Research

Related Aberdeen research that forms a companion or reference to thisreport include:

Competency Management: The Link Between Employee Performance andOptimum Business Results(August 2007)

Enhancing Operational Results with Employee Performance Management(June 2007)

The Global War for Talent: Getting What You Want Wont Be Easy(June 2007)

Incentive Compensation Management: Aligning Compensation withBusiness Goals (March 2007)

Benefits Management: Technology Automation and Employee SelfServices (February 2007)

Information on these and any other Aberdeen publications can be found atwww.Aberdeen.com.

Author:Allison Stamm, Research Analyst, Human Capital Management([email protected])

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrableresults. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquelypositioned to educate users to action: driving market awareness, creating demand, enabling sales, anddelivering meaningful return-on-investment analysis. As the trusted advisor to the global technologymarkets, corporations turn to Aberdeen for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targetedmarketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information Opportunity Insight Engagement Interaction) extends the client value and accentuates thestrategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.comor call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com
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Strategic Core Hr System