Financial Software Decisions - Employee portals

According to a recent Meta Group report, the employee portal market passed the $1bn mark last year and will be worth $2bn by the end of 2002.

After all, what could be more appealing than giving each employee a single, web-based point of access to all the data and applications they need for their work? Not having such access is clearly a source of inefficiency and muddle.

Of course, most organisations thought this access was what they provided when they put a PC on every desktop. Unfortunately though, they were simply giving the employee access to a generic range of productivity tools – word processor, spreadsheet and so on. The whole client-server model, in which each new application is loaded onto every PC, is impossibly maintenance-heavy. Moreover, the information on each application was isolated from that held on other systems, creating “data islands”, which employees had to navigate by expending considerable effort and time and compiling reports.

But with an employee portal, a company can give a new employee access to the corporate portal simply by emailing them a URL to click on. Their initial view, or jumping-off point, can be pre-defined by their role in the company. The portal then aims to provide employees with a comprehensive view of the company, as well as all the tools he or she needs to manipulate that information. It combines role-specific information (things employees need to do their jobs) and HR self-help functions, such as payroll data, self-service training, expense-claim processing and so on.

The problem with employee portals is that they presuppose a coherence and level of integration among a company’s systems that is often lacking.

Many corporates are still struggling to integrate all their information sources – yet portal technologies place an absolute premium on presenting an integrated view of the data.

This is why some of the major players in employee portal software are the big, integrated package vendors, including Oracle, PeopleSoft and SAP. For them, portal technology is easy, since it plays directly to the efforts they have been making to eliminate data islands.

Their portal technologies, of course, also have to be able to talk to third-party applications and to extract data from external data sources, such as news feeds, pricing services and so on, but this is fairly well travelled ground now. All the major portal vendors have drivers (linking software) for the major databases and applications.

SAP Portals marketing manager Tara Allison notes that this cuts back substantially on the scale of the systems integration project required to give employees systems-wide access. “One of the things we have is a ‘drag-and-relate’ function. This allows employees to mix and match information from different systems just by dragging items with the mouse,” Allison says.

An example would be a top-ten customers report for a salesman. Outside of a portal, this could be a pretty flat report. But, she says, in a SAP employee portal, the report could be culled from customer transaction files and related to views provided by the company’s customer relationship management system. The picture would therefore be rich and interesting.

Charlie Abrahams, European managing director of Plumtree, a leader in employee portals, points out that employee portals are faster to roll out than earlier “grand” software projects, such as enterprise requirement planning systems. Ford Motor Co., he points out, took just four months to build its employee portal for 150,000 employees, using Plumtree’s product.

“Around a third of our users are live in under three months and derive value immediately,” he says.

Rosemary Taylor, senior business consultant with PeopleSoft, reckons her company, which only launched its portal option a year ago, has already made $31m in sales, signing up 335 companies. “Through these portals employees can interact with a tremendous range of information in real time, which has a tremendous impact on the way companies do business,” she says.

Oracle marketing director Phil Wood agrees. “Once you’ve got a system like this in a company, it is impossible to envisage going back to the old ways of having to trawl though a mass of separate applications to do your job. You can do it if you have to, but the inefficiencies and amount of dead time would be glaring,” he says.

According to Meta Group, 80% of Global 2000 companies will have employee portal technology by the end of 2003 – and portals will become standard.

They also play well in the emerging wireless and hand-held device world. With everything important on a server, they are an ideal way of giving remote workers an interactive window on their company.