Issues in Informing Science and Information Technology
e-HR and Employee Self Service: A Case Study of
a Victorian Public Sector Organisation
Paul Hawking and Andrew Stein
Victoria University, Melbourne,
The application of the internet to the Human Resource function (e-HR) combines two elements:
one is the use of electronic media whilst the other is the active participation of employees in the
process. These two elements drive the technology that helps organisations lower administration
costs, improve employee communication and satisfaction, provide real time access to information
while at the same time reducing processing time. This technology holds out the promise of chal-
lenging the past role of HR as one of payroll processing and manual administrative processes to
one where cost efficiencies can be gained, enabling more time and energy to be devoted to strate-
gic business issues. The relative quick gains with low associated risk have prompted many Aus-
tralian companies to realise what can be achieved through the implementation of a business to
employee (B2E) model. Employee Self Service (ESS), a solution based on the B2E model en-
ables employees to access the corporate human resource information system 24x7. This paper
adopts a case study approach with a view to investigating the benefits and associated issues ob-
tained from an implementation of an ESS in an Australian public sector organisation.Keywords:
Employee Self Service, e-Human Resources, B2E, HRMIS, ERP Systems, Australian Case Study
The Human Resource Management (HRM) function has changed dramatically over time evolving
from the traditional administrative function primarily responsible for payroll processing to a more
strategic direction of human capital management that can add value to an organization (Malis,
1998; Walker, 2001). As companies now realise the importance of this function they are investing
resources into supporting Human Resource Management Information Systems (HRMIS).
Using information systems to support HR functions is not a new concept but as the focus of HRM
has evolved, so has the IS systems that support it. Companies realising the important strategic
nature of HRM, are bolting on HRIS modules to their current Enterprise Resource Planning
(ERP) systems. These are integrated information systems, supporting various business processes
in different functional areas across the
organization and are considered essen-
tial infrastructure by some of the
world’s leading companies. Over the
last decade sales of these systems are
estimated to be worth US$300 billion
(Carlino, 2000). ERP systems being
modular in nature allow companies
the flexibility to implement relevant
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e-HR and Employee Self Service
modules depending upon which business processes they want supported. The leading vendor with
approximately 54% of the market is SAP (McBride, 2003). Initially ERP systems were imple-
mented to provide a number of advantages; integration of business processes in such areas as fi-
nancials, materials management, production planning, and sales and distribution (Curran & Kel-
lar, 1998), a common platform, better data visibility, lower operating costs, increased customer
responsiveness and improved strategic decision making (Iggulden, 1999). However as companies
are realising the importance of HRM they are implementing the appropriate ERP modules to sup-
port this function. This trend is reflected in companies in Australian and New Zealand. Of the 400
companies that have implemented SAP’s, ERP system, 190 have implemented its HR functional-
ity (McBride, 2003). To achieve strategic value from an HRMIS reinforces the fact that they can
no longer exist in isolation from other business processes within a company. This fact, together
with the added costs of system interfaces, is usually a deterrent for stand alone HRM systems.
Evolution of HR - Web-based Applications
As HR has evolved, the level of associated administrative duties has increased proportionally
with some research estimating that as much as 70% of HR personnel time is spent on administra-
tive duties (Barron, 2002). This has been estimated to represent a cost of up to $US1700 per em-
ployee per year (Khirallah, 2000). It has been further estimated (Wagner, 2002) that HR paper
forms cost $20-$30 to process, telephone based HR forms cost $2-$4 to process but Internet
based HR forms cost only 5-10 cents. In an attempt to exploit these cost differences companies
have looked to the Internet for the solution.
Initially employees were only able to view and browse electronic versions of existing corporate
documents. But as familiarity increased in the use of on-line technology and with the increasing
maturity of network and browser technology, applications have evolved to incorporate transac-
tional interactions. As such companies have been transferring more and more of their corporate
information resources to web based applications, making them readily accessible to employees
via the corporate intranet. A survey by Watson Wyatt (B2E / e-HR European Survey Results
2002) indicates that although a large proportion of companies have introduced static e-HR capa-
bilities, the use of interactive e-HR is increasing rapidly. Findings indicate that 80% of its sur-
veyed respondents are looking to introduce or add to existing interactive capabilities and that 75%
of companies are looking to make changes to their e-HR capabilities over the next 2 years. This
finding supports recent research into 500 companies in the UK conducted by Microsoft Great
Plains Business Solutions which reveals that 30% of UK companies now rank e-HR as their
Figure 1. Indicates the outcomes from companies who use static information
Hawking, Stein, & Foster
number one business e-initiative. Although the majority of B2E solutions were still considered to
be at a basic level, focussing on improved efficiency and electronic document delivery (Dunford,
More detailed research by Towers Perrin indicates that companies who have made their sites in-
teractive are reporting greater overall successes compared to those that have limited themselves to
static information (see Figure 1).
These successes come in the form of improved service to employers and managers (98%) in-
creased information access (90%), reduction in administrative costs (85%) and processing time
(70%) with the added benefit of enabling HR to concentrate on more tactical and strategic issues
(80%). These benefits (see Figure 2) indicate the inherent value that can be gleaned from intro-
ducing an e-HR initiative (Ministry of ManPower, 2003).
Figure 2. Illustrates the five main objectives that are reported by companies
introducing e-HR initiatives
One of the many web based applications to support HRM is Employee Relationship Management
(ERM). Hamerman (2002) considers ERM suites as an evolution of self-service technology to
support managers and employees, providing the platforms for information delivery, process exe-
cution and collaboration in the organisation. The advantages in empowering employees through
an ERM suite include: multiple value propositions, consistent portal GUIs, all employee 24x7,
real-time dynamic information delivery and a comprehensive collaborative work environment.
Employees can now access a range of information pertinent to themselves without relying on oth-
ers. For example: They can compare pay slips for a number of given periods; view their superan-
nuation and leave entitlements as well as being able to apply for leave online. These suites offer a
multiple relationship dimension through the use of multiple applications.
Employee Relationship Management (ERM) landscape is displayed reflecting the interrelatedness
between corporate, personal and employee elements (Hamerman, 2002). (See Figure 3.)
e-HR and Employee Self Service
Figure 3. The Employee Relationship Management Landscape (Hamerman, 2002)
As can be seen from the adoption trends (Figure 4) between 1998 to the forecasted 2006, the per-
centage uptake of some of the main ERM applications are growing exponentially with the top
growth taken up by Employee Self Service (ESS) (70%) followed by employee portals (68%),
and Manager self-service (65%).
Figure 4. Adoption trends: ERM Applications (Hamerman, 2002)
Employee Self Service (ESS)
The influence of internet and browser technology has seen the growth of Employee Self Service
(ESS) implementations. ESS is an Internet based solution providing employees with a browser
interface to relevant HR data and transactions, enabling real time access to their data without
leaving their desktop. Employees are able to: update their personal details, apply for leave, view
their pay details and associated benefits, view internal job vacancies and book training and travel.
The tangible and intangible benefits of ESS solutions have been well documented (Alexander,
2002; McKenna, 2002; Webster & Buchanan, 2002; Wiscombe, 2001) and include reduced ad-
ministrative overheads, freeing up HR staff for more strategic activities, improved data integrity,
and empowerment of employees. One report identified a major benefit as the provision of HR
services to employees in a geographically decentralised company (NetKey, 2002). Other tangible
Hawking, Stein, & Foster
measures include reductions in administrative staff by 40%, reductions in transaction costs of up
to 50% (Wiscombe, 2001) and the reduction in processing activities from several days to a few
hours (NetKey, 2002). Ordonez (2002) maintains the theme of information delivery in presenting
ESS as allowing employees access to the right information at the right time to carry out and proc-
ess transactions. ESS further provides the ability to create, view and maintain data through multi-
ple access technologies. Companies such as Toyota Australia are extending this functionality be-
yond the desktop by providing access to electronic HR Kiosks in common meeting areas. In Aus-
tralia approximately 50 companies have implemented SAP’s ESS functionality: including, West-
pac, RMIT, National Australia Bank, Siemens, Telstra, and Linfox.
e-Commerce: Business to Employee (B2E)
In recent times there has been a plethora of research associated with the impact and implications
of e-commerce. Much of this research has focused on the various business models such as busi-
ness-to-business and business-to-consumer with the importance of developing customer and part-
ner relationships being espoused. But little attention has been paid to the potential of business to
employee (B2E) and the role that B2E systems can play in improving business to employee rela-
The Cedar group (Cedar Group, 1999, 2000, 2001, 2002) carry out extensive annual surveys of
major global organisations and their B2E intentions. Their research covers many facets of ESS;
including technology, vendors, drivers, costs and benefits. Their findings indicate the average
expenditure in 2001 on an ESS implementation was $US1.505 million (see Figure 5).
Figure 5. Average % breakdown on ESS implementation
Viewing this cost from an employee perspective, the average cost of ESS implementation ranges
from $US32/employee for a large organisation (>60,000 employees) to $US155/employee for a
medium size organisation (7,500 employees).
The main drivers for ESS have been identified as: improved service (98%), better information
access (90%), reduced costs (85%), streamlined processes (70%) and strategic HR (80%). A vari-
ety of applications are used by employees but the main applications were employee communica-
tions (95%), pension services (72%), training (40%), and leave requests (25%). Interestingly,
managers in the three regions of the survey use Managers self-service (MSS) differently: North
American managers use MSS to process travel and expenses claims, (42%), European managers
process purchase orders (48%) and Australian managers process leave requests (45%).
e-HR and Employee Self Service
Employee services can be delivered by a variety of methods and web-based self-service (B2E) is
undergoing substantial planned growth from 42% in 2001 to 80% planned in 2004 (Cedar group,
2002). The trend is for implementing HRMIS applications from major vendors like SAP or Peo-
pleSoft. ESS implementations show overwhelming success measures with 53% indicating their
implementation was successful and 43% somewhat successful. The value proposition for ESS
• Average cost of transaction (down 60%),
• Inquiries (down 10%),
• Cycle time (reduced 60%),
• Headcount (70% reduction),
• R.O.I. (100% in 22 months) and
• Employee satisfaction (increased 50%).
The culmination of the Cedar group (2002) report lists the barriers to benefit attainment and criti-
cal success factors in ESS applications. North American and Australian organisations both list
cost of ownership/lack of budget as the main barriers, whilst European organisations perceive
lack of privacy and security as the main barriers. Other barriers include; lack of technical skills,
inability to state business case, low HR priority and HRMS not in place. As with other complex
IT application projects, executive commitment, internal collaboration and availability of technical
skills to implement the application are considered important success factors.
With the claim by ESS solutions to incorporate “best business practice”, and with the return on
investment that ESS renders (Lehman, 2000), it is understandable that there has been a significant
growth in companies implementing ESS solutions (Webster Buchanan, 2002). However to date
there has been little documented about how Australian companies are utilising ESS solutions and
To further investigate the issues involved in implementing and using this type of solution and to
validate recent findings as discussed in the literature review, a case study approach was adopted.
This case study was designed to investigate and describe the added value and benefits to employ-
ees of this type of functionality and discuss issues involved in implementing an Employee Self
Service within a public sector organisation. Case study research is considered a valid technique
when investigating information systems usage and implementation. Yin (1994) believes the im-
portance of asking “what” type questions when analysing information systems is best achieved
via this type of research (p. 35). Walsham (2000) also supports case study methodology and sees
the need for a move away from traditional information systems research methods such as surveys
towards more interpretative case studies, ethnographies and action research projects (p.204). Sev-
eral works have used case studies (Chan & Roseman, 2001; Lee, 1989) in presenting information
systems research. Cavaye (1995) used case study research to analyse inter-organisational systems
and the complexity of information systems.
This case study was developed from initial interviews conducted with the key managers of the
organisation. Predetermined questions formed the basis of the interviews and these were sup-
ported by observations through access to the ESS systems. Interviews were transcribed and clari-
fication of points and follow up queries were conducted via email and telephone. Project docu-
mentation and policy documents were made availability. Confidentiality guidelines were adhered
to in the presentation of findings.
Hawking, Stein, & Foster
Case Study: Public Sector Organisation
The organisation employs approximately 5,000 staff at more than 180 diverse locations across
Victoria. Prior to 1999, the department had been using its own “in house” developed HR system
(HRSYS) for 8 years which included a limited ESS which did not incorporate browser technol-
ogy. Although few complaints had been reported in regards to this system, due to a restructure
within the state government in early 1998, a number of departments were amalgamated forming
the current department, resulting in nine different HR/Payroll systems being used. Due to incom-
patibility issues and Y2K, it was decided to implement SAP’s HR/Payroll module (4.0b) which
included the ESS module and SAPs Workflow tool to replace the current systems. (Workflow
automates many business processes. Once a particular event has occurred, documents are initiated
and sent out to the appropriate personnel.)
After seven months of implementation the system went live in June 1999. The ESS system was
implemented in all of the department’s eight geographical sites across the state and supported
95% of the employees. In most regions employees connected to the ESS via the Department’s
network backbone, resulting in a response time of less than one second. In a few remote locations
employees had to rely on dial up internet connection to access the ESS and therefore response
times were slower (1-2 minutes). In some remote regions ESS Kiosks had been installed to allow
access. The Kiosks are PC’s based in common areas usually supporting up to 20 employees. In
terms of security, each employee is supplied with a username and password, with the password
requiring to be changed every 90 days. However the maintenance of passwords has become a big
support issue, as employees fail to remember the passwords. Several other security strategies
have been introduced to limit access to information by unauthorised personnel. One such security
measure has been implemented in SAP ESS, if an employee stops using their screen for three
continuous minutes the system automatically logs the user out, preventing other staff members
viewing and changing personnel data.
The ESS system allows employees a broad range of functionality. In terms of Employee Details,
employees could view and edit basic information about themselves online; changing their home,
mailing, and work addresses as well as maintaining their emergency contact details. A number of
details were able to be viewed but not edited including educational qualifications, skills and com-
petencies, bank details, superannuation and taxation details. If any of these details were incorrect
or needed to be changed employees were required to submit authorised documentation to their
supervisor for verification which was then forwarded to the HR department.
The system also allows employees to view their current leave balances and leave history and ap-
ply for a broad range of leave. Firstly, they identify the type of leave they are applying for from a
specified list and then indicate the start and end dates of the leave. A similar process is used when
applying for overtime hours except other than start and end dates being required to be included,
times are also recorded. Once leave and overtime applications have been saved, an email is sent
via workflow to the appropriate supervisor indicating that a request has been submitted. Supervi-
sors can then view the requests within the ESS and either approve or reject the application.
Employees can also use the ESS system to book training courses. This is accomplished through
the training calendar. To do this the employee views the training calendar and the range of avail-
able training courses; once a particular course has been chosen the employee can determine
whether a vacancy exists and then initiate a booking. Again an email is forwarded via workflow
to the immediate supervisor, indicating that an application has been received and is awaiting their
approval. The email contains a hyperlink to the application within the SAP ESS system. Each
application has buttons which enable the supervisor to approve or disapprove the application.
They also have the added functionality to incorporate an attachment with the approval email to
include any reasons or to request further information. Once the application has been dealt with, it
e-HR and Employee Self Service
is automatically removed from the workflow inbox. Each application has “latest end” date auto-
matically recorded when the application is generated. If the supervisor has not processed the ap-
plication by the “latest end” date then the application is escalated and an email with the details is
sent to the next highest supervisor to process.
The implementation of SAP’s ESS has provided the Department with a number of tangible bene-
fits. Firstly, there has been a reduction in HR/payroll processing. For example, a recent event
which required the calculation of 15 months’ back pay including three pay increases for 4000
employees, required only five staff, and took five days to complete with a 99.7% accuracy. A
comparison estimate between the new system and the previous system, revealed that it would take
twenty staff, five days with a 78% accuracy rate. Obvious benefits included: reduction in labour,
faster processing, with a significant increase in accuracy leading to increased employee satisfac-
tion. Significant savings have also been identified with the introduction of online payslips. Over-
all the department believe that they have achieved 80% improvement in productivity. Intangible
benefits include the integrity of employee data and the empowerment of employees to access to
their own information in a timely and accurate fashion.
Although a number of benefits have been identified with this implementation there were invaria-
bly a number of issues associated with its use. Many of which can be attributed to inadequate
change management strategies. Many of the employees which had used the “in house” HR system
prior to the amalgamation, initially considered the original system to be more user friendly and
include better reporting functionality than SAP’s HR system. For example, once the new system
was implemented employees could only apply for leave and overtime online forcing compliance,
resulting in some initial resistance. As part of the change management process the department
conducted over 200 training sessions at 80 of the 180 sites across the state. At the completion of
each 45 minute training module, employees were assessed before they proceeded onto the next
module. All training documents and results were recorded within the SAP HR system to support
future career advancements. On completion of training it is estimated that approximately 80% of
employees accepted the new system. However after 3 years of use a number of managers still be-
lieve that the previous system was better. One reason for this was that the previous system incor-
porated language pertinent to the department.
Additionally the ESS system changed the role of managers forcing them to use the system as part
of their everyday task. This became a problem in the initial configuration of the system, and now
if an employee submits an application and the manager is away, the record becomes locked and
inaccessible to anyone but the manager.
The Aberdeen Group (2001) conclude that human capital management and HR systems have
been intricately connected with the bottom line in organisations and as such have not been ex-
ploited for strategic advantage. It has been estimated that only 20% of HCM effort is spent on
strategic activities. The opportunity to use the HCM and eHR systems to provide employees with
more efficient means of communication, yields strategic benefits for the organisation. Recruiting,
retaining and better fitting the employee to work roles and changing work patterns, are all strate-
gic when one considers the importance of the human resource in today’s information economy.
This paper describes and identifies some of the benefits and issues associated with the usage of
SAP’s Employee Self Service, a B2E solution for HR. It emphasises the numerous gains that can
be achieved by a public sector organisation, while stressing the importance of appropriate change
management strategies. For this organisation the move to B2E and ESS has reduced complexity
and improved focus, increased ROI and improved operational effectiveness. The employee views
Hawking, Stein, & Foster
the ESS as improving work and life balance and allowing better access to information for better
There are many terms used to describe the move from traditional HR to the “e-enabled” versions
of HR; HRMIS, eHR, B2E, ESS, web enabled ESS, HR portal, ESS portal and several others.
What is not fully known or understood is that these are information delivery platforms that have
much potential to deliver not only cost focussed savings but the more important strategic HR
benefits now being sought by modern organisations.
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Paul Hawking is a senior lecturer in Information Systems in the Faculty of Business and Law at
Victoria University. He is responsible for managing the university’s strategic alliance with SAP
and is co-ordinator of the university’s ERP Research Group. He has contributed to the Journal of
ERP Implementation, Journal of Contemporary Business Issues, Asia Pacific Journal of Market-
ing and Logistics, and presented at the 36
HICSS in January. Paul is past Chairperson of the
SAP Australian User Group and current committee member responsible for education and re-
Andrew Stein is a lecturer in the School of information Systems in the Faculty of Business and
Law at Victoria University. He has contributed to numerous international journals including: In-
ternational Journal of Management, Journal of Information Management, Journal of ERP Imple-
mentation and Management, Journal of Contemporary Business Issues and the Asia Pacific Jour-
nal of Marketing and Logistics and contributed to the 36
HICSS in January. He is a member of
the ERP Research Group at Victoria University.
Susan Foster is a lecturer in the School of Information Management Systems at Monash Univer-
sity and is a member of the ERP Research Group at Victoria University. She has contributed to
the Journal of Contemporary Business Issues, Asia Pacific Journal of Marketing and Logistics
and contributed to the 36
HICSS in January.