Shrinking budgets are encouraging companies to utilize internal technology functions, a survey finds.
By Debbie Bolla
Today’s economy is forcing all companies to challenge every level of their 2009 budgets, and a recent Watson Wyatt survey found that firms are looking to technology to get the most bang for their buck. Global consulting firm Watson Wyatt’s 2009 HR Technology Trends Survey found that 61 percent of employers are taking steps to optimize their current service delivery models (which includes a mix of HR technologies, call centers, and vendors).
The study also found that 33 percent of companies are reviewing and updating vendor contracts, and only 29 percent plan to stay the course they originally outlined for the fiscal year. The report surveyed 181 large employers about their sourcing strategies, satisfaction levels and future plans during the months of February and March 2009.
“A thorough review of the way HR services are being delivered can reveal hidden costs and quick ways to leverage existing investments,” said Jon Osborne, senior technology consultant at Watson Wyatt. “Many companies have already invested heavily in HR technology but have not yet taken action to integrate applications and ensure their processes are working seamlessly together.”
Investing additional funds to help transition systems is not a favorable option and a major concern. The study found that the three top factors preventing changes to HR sourcing strategies are:
- Transition Costs. About 43 percent ranked this as most important reason.
- Lack of a Business Case. Another 31 percent ranked this as their second concern.
- Avoiding Disruption in Current Service. Some 11 percent of respondents ranked this as their third concern.
“Current economic pressures make the decision to invest in or change HR technologies or service providers especially difficult. Is it better to put off changes and avoid short-term transition costs, or to invest now and attain long-term cost savings and enhance the employee experience?” questioned Tony DeNucci, senior leader in Watson Wyatt’s technology and administration solutions practice. “It’s more than just a question of the cost of change; it’s also a question of the cost of not changing. The companies that realize this are taking action, as demonstrated by current market activity.”
One area of satisfaction for employers is Web 2.0 technologies (See Figure 1). Web 2.0 technology has become a popular means of collaboration and communication in the workplace. The survey found that companies are using a variety of Web 2.0 technologies, including social networking (23 percent), podcasts (19 percent), blogs (21 percent), or wikis (15 percent) to communicate internally with employees. For these companies, the levels of satisfaction are high. Approximately 59 percent are pleased with their use of podcasts; 49 percent feel a benefit from their social networking technologies; and 40 percent are happy with the use of blogs and wikis.
“Web 2.0 is still a relatively unknown quantity for many companies,” said Michael Rudnick, senior technology consultant at Watson Wyatt. “However, the move toward Web 2.0 is an inevitable shift. While the current downturn may be discouraging the implementation of these new technologies, as companies begin to understand the capacity of social networking to act as a powerful communication tool, we can expect these numbers to pick up.”