In 1908, Henry Ford rolled out the first Model T from the Piquette Avenue Plant in Detroit. At the time, most people didn’t give Ford’s idea of a car for the multitudes much chance of catching on. Until then, cars were considered a plaything for the rich and famous, an expensive toy for Vanderbilts and Rockefellers. Critics dismissed Ford’s vision as naïve. After all, who needed a car when they had a horse?
But what nay-sayers missed was the real appeal of the Tin Lizzy: It got people off the farm. Suddenly, regular citizens could go to town when they wanted, get supplies when they needed them, deliver goods directly to sellers. In short, it enabled people to do for themselves.
Same thing for the Internet. By eliminating the middleman — a process now grandiosely dubbed disintermediation — the Web lets people do for themselves. That’s pretty powerful stuff — 1908 or 1998.
While thousands of companies are embracing this notion by selling directly to consumers over the Web, some businesses have begun applying disintermediation to their own corporate structures. Take human resources. These days, an increasing number of companies are employing a self-service approach to HR — that is, relying on corporate intranets and Web-enabled software to deliver documents, benefits information, and company data directly to workers. In theory, virtual HR takes off where interactive voice systems leave off. In practice, it goes way beyond that. Virtual HR calls into question the very need for large human resources departments.
Boston Scientific (www.bsci.com) is one convert to HR self-service. Managers at the Natick, Massachusetts-based company got virtual HR religion after they found a Web-based application that handled one of their messiest annual events — the assessment of merit pay. In the past, calculating the merit pay of employees took up to two months, with an additional two months for the reconciliation of missing data.
But in 1998, Boston Scientific began rolling out SIR, or Salary and Incentive Review. This is a customized version of Department Merit Review, an HR self-service application developed by vendor Interlynx, which was acquired in December 2000 by ProAct Technologies (www.proacttechnologies.com ). By hooking into the company’s ERP system, SIR allows Boston Scientific’s managers to view their direct reports’ compensation data and allocate the merit pool via the company intranet. The system monitors the completion rate of the managers and automatically rolls up any increases throughout the company. Since going live with the Interlynx system, managers at Boston Scientific say they’ve been able to slash the merit pay process from four months to 20 days.
Surprisingly, HR managers at the medical device manufacturer couldn’t be more delighted with the by-passing of their department. Says Olivier Deslandes, manager of Boston Scientific’s human resources information services group, “You don’t want to have a VP spending three days running around looking for numbers.” In fact, human resources executives at Boston Scientific seem to welcome the coming of self-service HR. “My goal for HR is to take the manual transactions out of our hands and let managers do it themselves,” explains Nick Messerschmidt, vice president of human resources at the company. Messerschmidt says Web browsers and employee portals will free up HR employees to add real value to their companies by acting as high-level consultants to senior managers.