Human Resources and Information Technology in OTD Inc - Case Study Example

OTD Inc. Recommendations – Human Resources and Information Technology INTRODUCTION Cost reduction exercises and strategic goals related to human resources are the objective for OTD Inc. in order to be in-line with profit expectations and the realities of operating this service business. This company is operating in an environment where attrition rates are substantially higher than other industries, thus pushing up the costs of recruitment and training. Fortunately, the majority of offices work independently and are not connected with regions where language and skills proficiency becomes a problem. The business is securing millions of dollars in revenue each year, however net income is much lower proportionately to its volume intake of cash and receipts. This represents cost allocation to areas of the business that can be improved through operational changes. OTD Inc. requires a new focus on human resources coupled with a transformation of management and control. IDENTIFYING OTD ISSUES Salaries represent 70.9 percent of a standard operating budget in this industry, including staff and management payroll. This is an enormous burden on an operational budget when pressures to expand are being created from governance officials. “Operational effectiveness involves improving process performance by leading and controlling the processes within the firm” (Santa, Ferrer, Bretherton & Hyland, 156). Telecom and information technology take a much lower position in terms of total expenditures, which are systems that are designed to support the business and its expansion goals through more streamlined service provision and software. These employees are not operating in foreign environments that require volumes of management expertise, as cultural dimensions in like nations ensure a more quality leadership model. A flatter management hierarchy with improved self-governance software would remove the considerable payroll burden from OTD and further benefit its technology innovation presence in multiple markets. SWOT Analysis Strengths Low operating overhead – rent, utilities, cost of service. A developed differentiation strategy against competition using service and quality. Weaknesses High attrition rates Training capabilities require development High costs associated with recruitment Opportunities Revamp current software systems to be more customer-centric and value oriented. Reduce management layers to improve motivation and autonomy in worker groups Create new differentiation strategies through marketing to gain more business Threats Pressure to expand from senior administration Rising international call center competition High labour costs limit budget. THE REALITY OF GOVERNANCE At the inherent level, people of most cultures have generic needs systems. These include personal recognition, a need for esteem both self-driven and motivated by the external environment, and a demand for affiliation (Gambrel & Cianci, 145). Though there are other human behavioral and personality needs present, these are universal concepts that are applicable in most like culture governance systems. There is also the ill-conceived notion that employees respond well in systems with a great deal of management presence. Old, rather outdated concepts such as Theory X suggest high control environments and a more rigid management system are the most effective in driving performance. Especially in this type of organization, speculations arise regarding salary differences and job role activities with subordinate groups, therefore providing some motivation toward attrition. This company has adequate software to support the business and its pressured expansion goals from senior governance, however Kotter identified that it is no longer practical for businesses to do what was previously done and can no longer be considered a factor for success. It is about coping with change (104). Consider the warning signs of impending IT project failure: lack of top management support, a weak project manager, weak team commitment, and no stakeholder involvement (Kappelman, McKeeman & Zhang, 17). All of this points toward inadequate leadership as being a pivotal cause why change practices are not successful in meeting their target objectives. In this environment where salaries represent a massive portion of the operating budget, it would seem the most effective method of improving performance and shortening the gap between revenues and net income would involve recognizing opportunities to cut operational costs. This is a service environment reliant on technology in order to provide service. Job role function is not complex, however considerable multi-tasking is required. However, the functionality of the job role is understood and training provided, thus producing an independent worker with the skills and knowledge to handle the job effectively. They become adaptive workers with change as part of their regular routine when new technology is adopted. However, there are new systems being developed with more sophisticated leadership functioning built within them. These are referred to as human resource information systems that is a “composite of databases, computer applications and hardware necessary to record, manage, deliver, present and manipulate data for HR” (Ngai & Wat, 300). Software is available that accomplishes more in the human resource function by granting workers autonomous access to corporate information such as benefits or certain management appeals (Copeland, 45). These HRIS systems are being built with features and applications that allow workers to manage their own HR documentation, including health surveys and a variety of self-service function. At OTD, with high attrition rates and a demand for expansion, costs are being applied to labor support where it should be at the technology level and in reducing layers of leadership. Bambacas & Bordia identify that training is motivation for workers when it is perceived as providing skills that are non-transferable to another organization, thus adding risks associated with finding a new job elsewhere (225). This represents an opportunity for internal marketing of skills development and then further selling the concept as exclusive to like industries. Ceserani, a training knowledge professional, identifies that in the business world much time is spent in getting the job done (45). Says the expert, “This is the world of ‘right’ and ‘wrong’, where you are expected to ‘do it right’ and constantly making the same mistake in punished” (Ceserani, 46). This high management presence at OTD works against the internal desire to work independently and it reinforces that mistakes are occurring, thereby impacting relationships with managers. Therefore training workers with similar management philosophy and theory as a unique corporate opportunity for growth equips workers with more commitment and productivity demands in their own work environment. The adoption of new HRIS systems designed to flatten the hierarchy would require procurement of additional software and add short-term reliance on the payroll allocated to information technology support. However, the long-term strategy is removal of the high concentration of management labor that is managing cultures without distinct differences in values, goals and ambitions that would commonly be found in foreign-speaking nations. However, there are risks associated with this practice. VanDoren reminds that two-thirds to three-quarts of projects fail completely or do not meet within budget expectations, functionality objectives, or schedule laid out (38). A fully detailed risk management system is necessary prior to launching a new software improvement project that identifies problems that might occur. It is most effective in the early life of the project (dot.ca.gov, 12). Project risk management is identifying, analyzing and measuring real and potential project risks. It will include tools that identify cost, scope, time allowed, and quality. The risk in this case involves management resistance to the technology, considering it a potential foreshadowing of removing management layers. It is a fundamental principle in human behavior that when security is threatened in the business environment, it is countered with certain resistance tactics. However, the business cannot afford to have this much of its budget allocated to labor when there are numerous systems available that can manage certain HR functions as well as give employees better perceptions of training and their role within the organization. Proper documentation in an environment like the call center is important for issues of liability. It is also considered a process related risk for new project development teams (Kappelman et al, 17). This business is in need of an auditing system that is considered a risk management investment that understands the dynamics of relationships between workers and managers and their functional roles within the company. A transition period with new HRIS systems custom-tailored to fit call center needs is an opportunity to assess leadership since the long-term changes instilled on operations will drive the business forward. A functional needs and skills analysis for all management should take place while the new technology is being implemented and tested. Kappelman calls the implementation of new IT projects a “postmortem examination” to reinforce the need for documentation in the project process (17). This new software system will improve the morale, acting much like a rewards system with the perception that their training is non-transferable in order to reduce attrition rates. Involving key employees on senior-level meetings from time to time will improve their visibility within the group and show the company’s dedication and commitment to improving their skill set and leadership knowledge. Allowing them to be involved in the process cycle of the new project launch will add further autonomous functioning to the group with much less reliance on mid-level management presence and expertise. All of the auditing and process systems involved with new technology in HRIS should occur simultaneously. Recovering the costs associated with new technology implementation is accomplished through payroll reductions. The service can also be sold to customers under cloud computing that allows external parties to use the online resources as a data storage tool. Cost recovery will be an evolutionary process based on new job role guidelines and the level by which the HRIS changes functionality at OTD. A standard vertical hierarchy with senior-level administration, specialized mid-layer management, and generic line management represent the layers of leadership needed at OTD. Reducing excess layers involves auditing as part of lean service philosophy to identify any management redundancies that exist at OTD. Using new HRIS software and emphasis on training through empowerment and development models will change the nature by which employees are actively involved in the business. A three tiered system of control is all that is required in an environment that is primarily service-based. WHAT REALLY ARE THE RISKS? None. There is a need to document efforts to launch new systems in order to improve functionality within the business, as well as the net income available to support it. With the credit availability to the company based on revenues, and with the focus to reduce costs at the operational level, funding for such a process would be secured especially with considerable liquid assets on their balance sheet. Carmichael reinforces the importance of using a 360 degree feedback system and its ability to really open up dialogue between management and the employee (74). Since this is considered an approved tool by managers and employees, auditing teams need to conduct new performance appraisals under the 360 degree model by inquiring with customers about their experiences with leaders. By introducing this during a period of change, it would be common that senior managers want to document process and also instill a constant momentum of operational improvements. At the same time, the fully-funded or credit-supported technology launch of new HRIS systems provides new access to the worker and the ability to function in a self-managed environment. Blending social media into the site to improve instant communications with coworkers, in a controlled IT-supported environment, would give them access to certain training that could be performed in their own real-time environment. Autonomous software systems linked with virtual environments replaces the need for constant management presence that only leads to performance issues in the long-term based on disagreements, culture differences, or salary resentment. The balance sheet clearly indicates a problem at the operational level with no clear justification, other than high salary structures, of what is contributing to such a marginal net income. Sales revenues are considerable, therefore indicating that OTD is performing well in its sector against competition. At the same time, attrition is a serious issue that is usually the product of de-motivated staff members. Call center employees are better-equipped than some other workers to function independently as there are rarely guidelines available for handling multi-dimensional client issues. Making them a part of the process and the 360 degree feedback serves documentation demands as well as understanding the genuine dynamics of management interaction in daily operational performance. CONCLUSION There is a need for new technology that can support a more cost-conscious environment. Thick layers of management with inflated salaries contribute to animosity with group members as well as cost the business opportunities to expand or improve. The operational dimensions of OTD are secure, however the functional structure that governs it requires adjustment and a need to push heavier reliance on sustainable technology. Technology will create self-service positions from capable staff. Coupled with clever marketing that sells skills training as exclusive, attrition is reduced without significant burden to the budget other than appropriate virtual or print materials. A business cannot function successfully when 70 percent of its sales revenues are returned to inflated management hierarchies. Even though the expertise is available to support change within the environment as needed, this volume of expense causes long-term problems with achieving the goal of expansion. The area in need of cost reduction is clear in this case and the return on investment for the new HRIS systems would provide a longer-term strategy for global competitiveness. There is a need for new project development, increased auditing masked under 360 degree feedback introduction, and low-level employee mentoring in a functional leadership environment. Works Cited Bambacas, M. & Bordia, P. “Predicting different commitment components: The relative effects of how career development HRM practices are perceived”, Journal of Management and Organization. Vol. 15, Iss. 2, 2009. Carmichael, M. “An all around appraisal success”, Human Resources, July 2009. Ceserani, J. “An innovator’s toolkit”, Training Journal. October 2009. Copeland, Bill. “Making HR your business”, CA Magazine. Vol. 137, Iss. 3, 2004. Dot.ca.gov. “Project Risk Management Handbook. Threats and Opportunities”. Viewed November 20, 2010 from http://www.dot.ca.gov/hq/projmgmt/documents/prmhb/caltrans_project_risk_management_handbook_20070502.pdf Gambrel, P. & Cianci, R. “Maslow’s Hierarchy of Needs: Does it Apply in a Collectivist Culture”, Journal of Applied Management and Entrepreneurship. Vol. 8, Iss. 2, 2003. Kappelman, L., McKeeman, R. & Zhang, L. “Early warning signs of IT project failure: the dangerous dozen”, EDPACS. Vol. 40, Iss. 6, 2009. Kotter, J. P. “What leaders really do”, Harvard Business Review. June 1990. Ngai, E. & Wat, F. “Human resource information systems: a review and empirical analysis”, Personnel Review. Vol. 35, Iss. 3, 2006. Santa, R., Ferrer, M., Bretherton, P. & Hyland, P. “The necessary alignment between technology innovation effectiveness and operational effectiveness”, Journal of Management and Organization. Vol. 15, Iss. 2, 2009. VanDoren, V. “How to avoid project failure”, Control Engineering. Vol. 56, Iss. 11, 2009. Read More