Shared Service Centres

Shared service centres provide services needed by several, if not all, other parts of an organisation. Two distinctive features of HR shared service centres are:

• they offer a common service provision of routine HR administration and, sometimes, additional HR services;
• they are service-focused, enabling the customers of the shared service to specify the level and nature of the service.

An increasing number of organisations are exploring the option of HR shared service centres, including the use of 'off-shoring' whereby the service centre is located in a geographically remote location. As shown earlier in Table 1, the introduction of a shared service centre is just one element of a wider change to the way that the HR department operates and is structured. For example, a shared service centre is often introduced at the same time as there is a move to introduce business partners and centres of excellence as there is a corresponding increase in the number of people management activities that are devolved from the HR department to the individual employee.

The content of shared services will vary from one organisation to another. A shared service centre can provide the full service from routine administration in, for example, recruitment, payroll and training, right through to supplying specialist HR information and advice on HR policy and practice.

HR shared service centres can be resourced by in-house personnel or they can be outsourced to specialist third party outsourcing providers. In practice, it is becoming more common to see hybrid models. One example of a hybrid model might be whereby the majority of the HR services are provided through an in-house shared service centre, with a few specialist areas being outsourced (e.g., employee 'wellness' or 'well-being'). A different example could be where the administrative activities are outsourced to one provider and other specialist areas are outsourced to separate specialist providers. A model of shared services which illustrates the benefits and challenges posed by different organisational models is shown in Figure 1.

 Figure 1: The benefits and disbenefits of different organisational models 

The Opportunities and Challenges Associated with Different Structural Models

Most people currently think of structural change in terms of introducing the so called 'Ulrich model' or the 'three-legged stool' (i.e., shared services, business partners and centres of expertise). However, this structure is really designed for large complex organisations, especially those with geographically dispersed operations, and even here there is much adaptation. Organisations might introduce only one or two legs, particularly choosing to have business partners. Certainly smaller organisations tend to stick with a single integrated HR team where all activities are combined. If the organisation is somewhat bigger/more complex, separate teams may deal with some or all the HR issues for particular locations or business units.

The advantages and disadvantages of using the Ulrich model are shown in Table 1.

Table 1: The advantages/disadvantages of the Ulrich model 

Advantages	Disadvantages
Cheaper because of economies of scale in a shared services operation	Costs creep back after the initial reduction. This may be for good reasons that the service offering becomes more variegated to fit different customer needs or as a reflection of the relative shift towards higher paid professional staff However, costs may arise because inefficiencies develop and are not tackled as they were in the initial set-up phase
Improved resourcing flexibility because of larger pool of administrative staff	Only true if co-located but poorer career development because step up to business partners and experts is difficult
Better knowledge transfer within the administrative team	Only true if co-located, but potentially poorer knowledge transfer with business partners and experts
Faster service through automation and/or simplification of processes	Managers complain at the transfer of work where the self-service technology is difficult to operate and where the tasks were once performed by HR
Better performance quality through better specification of process ownership and process re-engineering	Customers complain that shared service centres are often remote and that contact is impersonal or too standardised. Managers also object to the perceived loss of a single contact point now having to get services through multiple channels
More time spent on business critical issues because process standardisation and automation reduce the proportion of time spent on administrative activities	Though there is evidence to support this contention, there is also evidence that senior HR staff do not focus on the key issues as they are distracted by operational support to line managers
Higher HR credibility because administration is done better than before and the business partner role with its focus on a strategic contribution offers greater added value to the business	The question mark regarding this benefit arises from the business partner role — is it working properly?
It is easier to handle a merger with this model because of the separation of activities. Thus, service centres and centres of expertise can be combined and business partners retained to meet any revised business unit structure	No evidence to contradict this contention

As we have previously noted, structural changes are usually accompanied by some process modernisation (reductions in 'handoffs', removal of duplication or redundant steps and simplification and standardisation of tasks) and some technological improvement (i.e., employee/manager self-service and improved HRIS).

As can be seen from the list of reported advantages, many of these accrue not just because of structural change but because of what the reorganisation allows to happen: the development of new 'mindsets' about what HR exists to do; a focus on improving HR processes and investments in new technology.

It is also worth noting that the tensions described in Table 1 were also identified in People Management, which draws attention to recent research that questions the validity and effectiveness of the Ulrich model:

As HR has sought to become more strategic, value-adding and business-focused, the emphasis has increasingly fallen on the ideal structure for the function — a trend that has been particularly influenced by the writings of US academic Dave Ulrich.

His writings have built up the popularity of a three-legged model: an HR shared-service centre, centres of expertise, and business partners. In many large organisations, this model has replaced the integrated teams that previously carried out the full range of HR activities, from administration to strategic direction.

Though the three-legged model is often thought of as the norm, our research has highlighted the shortage of evidence — in the UK and Ireland at least — on the extent of its adoption and, more worryingly, on its effectiveness. 

The efficacy of the Ulrich model is also challenged in an article by Gratton, which concerns the perceived fragmentation of HR services after the Ulrich model had been adopted in an organisation:

During the past decade, we have fragmented the roles and responsibilities of the function. We have outsourced the lower value, operational work, and we are beginning to develop the staff profiling work that will enable us to act as 'employee champions'. We also putting the 'change agent' roles back into the stream of business to work closely with their line manager partners. Meanwhile, the 'business partners' are either going into the business or clustered around 'best practice centres' which may be located in different places…. this fragmentation of the HR function is causing all sorts of unintended problems. Senior managers look at the fragments and are not clear how the function as a whole adds value.

As we have previously noted, not all organisations adopt the three-legged stool structural model. Indeed, report observed that among the organisations surveyed only 18% confirmed their restructured HR function incorporated all three elements of shared services, business partners and centres of expertise. The vast majority, therefore, had adopted either a partial Ulrich model (46%) or claimed to have no elements at all (36%). These latter cases reflected HR functions which had been conflated into single teams and the Ulrich descriptors were not recognised as distinct and separate channels of service delivery.

Informed by these observations, we now take the opportunity to examine in more detail the rationale and challenges posed by the introduction of shared service centres, business partners and centres of excellence.

Case Example Illustrating Aspects of the Model

This Oil and Energy Services company had grown both organically and through acquisition into a global organisation employing 64,000 staffs in 80 countries. To create high levels of customer service it depended on high levels of international team working and knowledge sharing. This reliance on knowledge and technology caused them to describe themselves not only as a leading oilfield services provider but also as information systems specialists, who could support their customers by translating data into useful information, and then transform this information into knowledge for improved decision making around the globe. Given their strategy of creativity, collaboration, and high levels of customer intimacy, the levels of understanding of customers' needs, managing international diversity and knowledge sharing required a great deal of international teamwork.

HR Strategy

The HR function was seen as pivotal to the development of international team-working and knowledge sharing. The HR function had a crucial role in developing culturally sensitive management and in so doing was required to shed its administrative workload to concentrate on culture management and change issues. The HR function was being gradually transformed into a more strategically oriented function, in which HR staff worked more closely with managers in the new operating structure.

To achieve this, the HR function was first divided into the now common shared services and business partner model. Shared services provided administrative and policy support with HR business partners providing direct support to business-facing managers in the field. Second, shared services adopted a global HRIS to allow it to become more efficient and effective in providing globally available data for all service lines and all business groups from the same database. This allowed consistency and integration of performance management and other HR practices and policies throughout the company. Third, Web-based HR was introduced to improve service delivery by opening up the access to the HRIS using manager and employee self-service applications.

HR Service Goals

Thus, the HR service goals were primarily concerned with improving service quality and freeing up time for HR staff to address more strategic issues.

So when we looked at it we realised that in order to do that we had to take off a lot of the administrative load from the HR function in each of the groups and let them focus much more on people and then…work with one another around people issues because that's the cultural driver and let all the support stuff be taken care of somewhere else. 
(UK HR Director)

HR Service Architectures

First, these goals were to be achieved through the development of a common HR portal, through which all online services could be accessed. The intention of this portal was also to help HR to create a greater sense of corporate identity among employees in the extended enterprise using an internal employer branding strategy. Second, the company implemented a global HRIS, comprising a set of basic information systems and the first set of Web-based HR tools. These technologies were a combination of out-of-the-box applications, derived from the global HRIS, combined with bespoke tools, many of which were developed in-house'.

The parent company's internal analyses had shown that

There is a cost saving …but that cost saving does not offset the cost of implementation and investment cost. It might do in the long term but if you're looking at sort of two/three year returns it doesn't work. (UK HR Director)

The real benefit being sought was an improvement in HR service quality, providing more accurate and reliable data and enabling more informed management decisions. The company, however, had a longer term transformational goal of introducing ICT to improve human capital management through the development and introduction of a bespoke global 'career centre'.

Service centres were established to handle transactional enquiries from line managers and employees. The emphasis was on the internal sourcing of HR technologies, unless a compelling case could be made for outsourcing of services. As the HR Director explained:

I think outsourcing overall is quite dangerous because outsourcing is … in many cases it's cost driven and if it's cost driven why should another organisation be able to take some cost out which you can't?

HR Service Outcomes

A mix of intended and unintended outcomes emerged. On the positive side, managers were satisfied overall with the level of transactional support provided by the shared service centre and the quality of data available via employee and manager self-service tools. There were issues, however, with some Web-based HR applications, in particular the 'career centre' which was supposed to enhance opportunities for international mobility but failed to live up to its promise. Managers also reported problems with 'service ambiguity', in the sense that they were not always sure what services to reasonably expect from different parts of HR, citing potential conflicts and overlaps between specialists and business partners.

This example, supported by the framework described earlier, points to a number of important points for practitioners to be aware of when considering different HR service delivery approaches:

• Consider carefully the specific HR services goals that define the purpose of the investment in the project(s)
• Design an architecture which is appropriate for the defined goals
• Implement the solution with a determination to achieve positive, intended outcomes which reflect the defined project goals
• Check carefully that a 'line of sight' has been established between HR strategy, goals, architectures and intended outcomes

Some of these architectural design decisions are now examined in some detail, as these are often a source of anxiety and confusion for HR professionals.

Structural Issues

Where structural lines are drawn between HR delivery channels, the attendant issues will vary from organisation to organisation. The main questions that will need to be addressed are the following:

• What activities need to be centralised to take advantage of economies of scale and consolidation of expertise?
• Where do we need to decentralise to ensure that we remain close to the business and take account of the unique needs of different parts of the organisation?
• Where do we draw the line between those activities that are performed internally and those that are better performed externally?
• Where do we draw lines of responsibility for people management between internal organisational boundaries — both between the HR function and line managers/employees and within the HR function itself?
• How do we leverage technology to deliver HR services?

In answering these questions, there are many contingent factors, such as the ambition or ability of the organisation to implement Web-based HR solutions; current capability of line managers in people management; attitudes to in-sourced and outsourced provision; maturity of the HR function; suitable outsourcing options and so on. This means that your decisions around HR delivery will ultimately be the product of trade-offs and contingencies that reflect the situation your organisation faces.

We are seeing some significant changes in the way the HR function is working, what HR professionals are doing and how they are contributing. The key point to note is that it is not the labelling or even where organisational lines are drawn that is important. What is important about the structural dimension is the alignment of HR delivery with the strategic goals of the organisation and the focus on the internal business clients.

A useful model which illustrates the alignment or 'line of sight' between HR strategy and HR service delivery approaches or architecture is shown in Figure 1. The model draws upon the prominent, relevant literature and our own practical experience and research and shows four central elements — HR strategies, HR service goals, HR service architectures and HR service outcomes. In effect, this creates a 'line of sight' between the adopted HR strategies of an organisation and the HR service outcomes. The moderating elements reflect the changing and dynamic nature of HR service delivery in its varying organisational contexts. Consequently, every organisation can engage with this model at a different point. Some may already have advanced technology-based applications or tools in place, whereas other organisations may be engaging with these more advanced technologies for the first time, as HR seeks to move from a traditional support function to a more strategic partner.

 Figure 1: Framework linking HR strategy with HR service outcomes

These drivers can address HR's transactional or transformational goals. The former focus on reducing the costs of HR services or improving its productivity, and improving service delivery to managers and employees; the latter focus on freeing up time for HR staff to address more strategic issues rather than basic administration, and by transforming the contributions that HR can provide to the organisation (its 'business model'). The transformational goals involve extending HR's reach to more remote parts of the organisation to create a sense of 'corporateness' or internal integration in extended enterprises (e.g., through HR portals); enabling more sophisticated recruitment searches (e.g., through widely available social media to uncover people not actively seeking jobs) and (self) selection through online tools; creating new forms of organisational community and methods of communications through new applications of Web 2.0, for example, interactive employee engagement surveys, virtual communities of practice, 'blogging' and 'wikis.

The extent to which an organisation focuses on any or all of these goals should, in theory, influence the types of HR services architectures it adopts. The architecture refers to the HR data, systems and technologies but also how these are sourced and the choices made over the human resources organisation. For example, some organisations have set up in-house shared services centres and applied Web-based HR solutions to them but simultaneously outsourced major applications such as pay and pensions.

It follows, therefore, that an organisation which places an emphasis on transactional goals, such as cost reduction, would seek to design and build a Web-based HR services architecture which streamlined HR processes and deployed self-service tools for managers and employees to access them.

Similarly, HR services architectures concerned with addressing transformational goals would involve elements such as sophisticated search technologies, career development tools, human capital management systems, social software, e-learning and knowledge management platforms and virtual meetings software.

The sourcing of these systems (in-house vs. outsource) and the implications for the skills and capabilities of the HR function are also important considerations.

As the model shows, the HR services architecture will be moderated by the absorptive capacity of HR to seek out knowledge and exploit these architectures to the full. Absorptive capacity in this context can be defined as the potential for the HR function to seek out and assimilate knowledge about HR technologies and incorporate these into their vision for a changed HR function. It can also be defined in terms of the capacity of the HR function to realise potential by good implementation practices and ongoing support.

One of the major debates in the practitioner world is whether Web-based HR technologies should be adapted to existing or revised HR processes (customisation) or whether HR processes should be adapted to fit usually bought-in technologies (the 'vanilla' solution). Evidence to date suggests that the vanilla solution is winning out because of the difficulties in changing existing Web-based HR technologies at reasonable cost. This realisation phase is also marked by the ability of the HR function to combine face-to-face and technology-mediated HR approaches to produce a new business model for HR previously discussed; that is, HR's ability to transform what it can currently do with available knowledge and technology into a more strategically oriented function that addresses the key strategic drivers of the organisation.

The organisation and resourcing of the HR function refers to the different configurations of organisational structures used by organisations to deliver their human resources strategy, including decisions on centralisation of decisions, outsourcing and specialisation among HR professionals. Different models are currently being adopted, all of which involve choices on the development of shared services, centres of HR expertise, managerial and employee self-service and HR business partnering. These developments are often associated with the research and prescriptions of Ulrich (tripartite model) and others have pointed out, there are many variations on this theme, with large HR departments still being organised along functional lines.

Finally, the adoption of specific HR services architectures should lead to specific HR services outcomes. Note that these outcomes can be both intended or unintended, and also positive or negative. It should also be noted that the positive/negative classifications will sometimes depend on where one stands. For example, the headcount reduction of HR is often used as a justification (positive outcome) by the organisation for adoption of Web-based HR but it also has potentially damaging consequences for organisational knowledge, as well as those HR staff displaced by the reduction (negative outcome).

Again it should be noted that these outcomes will be moderated by the change models and approaches adopted. The change management literature is extensive, analysing how different approaches to change produce better or worse results; controversy still exists over the merits of 'top-down' versus 'bottom-up' change, incrementalist approaches versus 'big-bang' and the pace at which change should be driven, including the competence of HR to manage such change effectively.

One of the most important factors shaping the success of technological change is user acceptance. Thus, important moderating factors that need to be considered are architectural system design decisions and reactions to the Web-based HR technologies.

The Factors Involved in the Choice of Service Delivery Approaches

Delivery Channels — Who Does What?

As we have already noted, it is evident that HR management in organisations is not just the domain of the HR function; there are many players in the delivery of HR in organisations:

• employees (through self-service),
• line managers (through self-service and their people management responsibilities),
• outsourcers (back office, recruitment, training, etc.),
• external consultants,
• different internal players in the HR function (shared service centre, specialists and generalists).

Collectively, we refer to these participants as 'HR delivery channels'. When designing the service delivery model, it is important to take decisions concerning where responsibilities for service delivery will change.

We can be certain that genuine, sustainable HR transformation will shift accountabilities for HR management. What each organisation will need to work out is how far these accountabilities shift and to whom. This is the purpose of this phase of work in the transformation process.

We do not start this thinking about future accountabilities with a blank sheet of paper. Some of the transfer in accountability will be directly related to Web-based HR and will be known. So, from a technology perspective, there will be core HR processes/activities that must be configured in the HR Information System (HRIS) backbone. These (such as responsibility for personal data) will be Web-enabled and move to employee self-service. There will, in all probability, be e-tools on top of the HRIS backbone that will embed other HR processes. There will be the opportunity for greater self-service concerning policy/procedural advice, and so on. 

In addition to these shifts in service provision that are linked explicitly to Web-based HR, we also need to take into account other organisational drivers that will shape the way HR has delivered. A useful starting point is to explore how to work through the 'who does what' question and, in particular, to ensure that the HR function ends up being focused on those areas that will contribute most value in the organisation.

Understanding that HR is delivered through a number of channels is the first step. The second step is to scope, at a relatively high level, the services embraced by HR management — not just what the HR function does — for your organisation.

Scope of HR Services

The scope of HR services document is the second key input into this process. This is derived from the organisational levers model. As a starting point, the HR services can be illustrated under five headings:

• people development and performance management,
• employee relations and communication,
• resource management,
• retention and reward,
• HR information.

In developing your scope of HR services document, the important things to consider are the following:

• Focus on the full scope of HR management, not just what the HR function does, and remember that HR management includes training and development.
• Do not aim for an exhaustive list of every activity undertaken in the realm of HR — keep labels at a high level.
• Aim for no more than 10 labels, and ideally around 5–10, for each heading.

As a precursor to organisational design, we have found it helpful to combine the work on HR delivery channels and scope of HR services to ascertain where responsibilities change for HR service delivery. Our suggested forum to complete this work is through an accountabilities workshop

Case Study 5: KPMG

This case illustrates the use of a variety of Enterprise 2.0 tools in enabling better communication and knowledge sharing amongst KPMG consultants, which in turn translates into more effective engagement with their clients.

KPMG is a UK limited liability partnership and a subsidiary of KPMG Europe LLP. It is a leading provider of audit, tax and advisory services. KPMG in the United Kingdom has over 10,000 partners and staff in over 22 office locations and recently merged with the German, Spanish and Swiss member firms. KPMG Europe LLP is part of a strong global network. Combined revenues for KPMG member firms increased to US $19.81 billion for the fiscal year ended 30 September 2007.

Due to the scale, complexity and geographical spread of KPMG's business operations, collaboration and knowledge sharing amongst KPMG's primary asset —its people — is a vital component of its success. Underpinning its drive to constantly improve this aspect of its business, aspects of Enterprise 2.0 applications are being adopted, to varying degrees, with the key aim of delivering better services to the firms' clients.

Using Enterprise 2.0 to Improve Knowledge Sharing

Building on the theme of knowledge sharing, many assignments involve the formation of groups who work together around a common goal; effectively there are communities of practice — bringing together people with shared interests and passions whether they be from an industry perspective, particular KPMG service, client or geography.

As Ceri Hughes, Director, Global Advisory Knowledge Management/IT/Research at KPMG in the United Kingdom explained:

In these situations, some teams have a naturally high level of face-to-face contact, where information can be readily shared. However, in those cases where, for example, we might have teams separated by geography, time zones, and office locations, we need to facilitate convenient and effective ways of stimulating and maintaining knowledge sharing and group working. In these cases we are beginning to turn to a variety of enterprise 2.0 applications.

The points made about convenience and effectiveness resonate with widely published research relating to the propensity for users to adopt new technologies and their subsequent reactions. The crucial element in all of this for KPMG was unremitting attention to making sure, where possible, that the new Enterprise 2.0 tools could be assimilated easily into the natural way of working for their people, without the need for significant support.

Ceri Hughes explained the steps taken to bring this about:

In order to make our new tools as simple, intuitive and familiar as possible; we have tried to make the initial access to them as straightforward as possible. To do this, we make as many of the tools as possible available from our KPMG Portal — our single knowledge sharing platform, built using Microsoft SharePoint 2007. This means our users have a single point of access to the tools to support their collaboration activities.

In-House Support

Enhancing the critical 'pillars' of easy access and intuitive operation, KPMG has a network of knowledge managers who assist the organisation to optimise the use of the Enterprise 2.0 tools. These managers are confident in using the different capabilities and understand their most appropriate application. They provide support to the client-facing teams by raising awareness of the tools and providing direct support if required.

'A key role for the knowledge managers is recognising opportunities to use the tools to maximum advantage', said Ceri. 'This is the proactive side to the knowledge managers' role — building relationships with their internal clients and recognising opportunities where the tools can help these teams with assignment or project'.

The spin-off from this is that the client-facing teams get to experience a broad range or blend of tools that support their business processes and they can then take the knowledge of those tools into future assignments.

If knowledge managers are not available at the point at which support is needed, the users can turn to online support in the form of 'smarter working' toolkits which allow them to access the various tools available to support them by browsing various business scenarios available on the knowledge-sharing platform and selecting the one closest to their own which then leads them to the tools available to help them. These scenarios comprise a range of material that explains how to operate the tools in different client-centred situations and can take several forms from simple guidance cards that can be downloaded and printed as aide memoirs, to 'talking heads' type video clips, which explain how to setup and use the tools.

Commenting on these different support approaches, Ceri stressed the importance of maintaining momentum and interest.

It is critical that we build self-sufficiency and confidence in using the enterprise 2.0 tools. Not only do they enhance the way that we can work together in distributed environments and foster greater team working and knowledge sharing but they reflect the way that information is increasingly shared in our lives outside of work. Our 'generation Y' employees expect to see these tools made available to them, but some other individuals and groups require more encouragement and are perhaps more sceptical at first about the potential benefits.

Measurement of Benefits

There are currently few hard measures that effectively measure the potential benefits of using the Enterprise 2.0 tools. For example, while it is possible to measure the number of items created over a particular period, this statistic holds little value. As Ceri explained:

At this embryonic stage in our development and use of enterprise 2.0 tools, the use of hard numeric measures is not particularly powerful in terms of telling us how effective these tools are. Perhaps a year from now, it would be helpful to know how many pages, for example, had been sustained over time, in a sense kept alive by their communities of shared interest. We could then probe more into why this had happened and infuse that learning into the wider organisation.

Currently, it is far more beneficial to ascertain via regular team meetings and post assignment de-briefings how the effectiveness of the different tools is perceived. This feedback can be converted into short, snappy case studies, which can be used by our knowledge managers and the online tool kit. We find that our firms' client facing teams are more likely to have confidence in trying out a new tool or way of working if they understand the value that it has already added to their peers or to another situation to which they can easily relate.

Future Developments

KPMG will continue to monitor and evaluate its Enterprise 2.0 tools and seek where practicable to enhance their capabilities and penetration within the organisation. As the tools become more ubiquitous in everyday life, so employees will expect to have them freely available in their work situation. This point is recognised by Ceri:

With an increasing number of our current employees and prospective employees displaying high levels of familiarity with these types of tools, there is growing internal and external momentum surrounding their adoption. Indeed, we are conscious that our employer proposition benefits from displaying a willingness to embrace these tools.

Case Study 4: Westminster City Council

This case illustrates the use of online discussion forums to enhance stakeholder engagement across the organisation.

Westminster City Council is a unitary authority providing local government services to 232,000 people and 47,000 businesses in London. Rated 'excellent — four stars' by the Audit Commission, Westminster is a pioneer in the provision of leading-edge solutions for local government. The council's 60 elected members serve a community that is highly diverse with complex needs, and which generates 2% of the United Kingdom's gross domestic product. The HR function, led by Graham White, has invested in the use of an online discussion forum, as part of a multifaceted stakeholder engagement programme.

The Value of Staff Engagement

'To sustain our status as a four star local authority, it is vital that we nurture and develop an engaged workforce', said Graham White. 'One of the ways we are doing this is to allow our employees more opportunities to voice their opinions online, to help them better engage with key organisational issues. This fits in with other aspects of our strategy, such as staff development, talent spotting and building real values'.

The Enterprise 2.0 Solution

Many local authorities operate staff portals, where information is deposited on numerous subjects for staff to view. In these instances, where staff require further information, follow-up usually consists of reference to online support material, which is often set-piece, 'viewable only' information; alternatively, email or telephone assistance may be available, or staff may be referred to their respective line manager. All of these channels are regulated and do not foster spontaneous, conversational discussion that can be seen by the rest of the organisation.

At Westminster City Council, the decision was taken to adopt an approach which would allow employees at all levels to engage in online discussion on a variety of topics, some of them determined 'top-down' by key officers of the organisation, and others created 'bottom-up' by the employees. The pre-allocated subjects arise from a variety of inputs: council objectives, senior management meetings; subjects raised by individuals through a 'sounding board' email channel; engagement groups, open-house sessions or simply by one individual feeling strongly about a particular element of how the council is doing its business. An example of a pre-allocated discussion topic concerns Reward Strategy. In this case, the Council is implementing a new remuneration scheme for all staff that will introduce exciting, broader salary bands to ensure all staff in Westminster have the potential to earn top quartile salaries in the greater London area. The opening position statement, posted by a senior finance officer, draws attention to a central feature of the new proposals, which is the intention to ensure that no members of staff will receive less through the new scheme than they do at present.

The ensuing discussion thread unfolds as employees post their attributed comments, in full view of the rest of organisation. Graham White explained:

Our new Reward Strategy is an important component of the organisation's forward-looking approach to attract and retain the most talented people, but our explicit commitment to employee engagement, evidenced by the discussion forum, is also an important part of the overall mix of measures designed to enhance the Council's reputation.

More broadly, the system easily allows HR to track the level of interest in the different topics, by evaluating the number of 'viewing hits' a particular topic receives and also the number of responses. Graham White continued:

The authority employs over 5,000 staff and we are extremely pleased with the level of enthusiasm and engagement demonstrated by the online discussion forum. The comments posted by our staff not only help to refine the thinking of our senior management team on a particular topic but open up new avenues for discussion. Also, as we seek to downsize the number of employees physically located in our buildings and encourage more flexible working methods, the online discussion forum is a way of creating social interaction.

The online forum also allows topics to be generated spontaneously by the employees. Examples include subjects as varied as childcare vouchers, windows vista and the quality of the shower room. In one example, an employee raised the issue of making cycling to work easier for all staff. Over 280 staff reviewed the site and a number of them made further comments. This lively debate has now been picked up by the organisation, which is looking into the provision of better services for staff who cycle into work.

Policing the Enterprise 2.0 Applications

The policing of the new Enterprise 2.0 applications has been carefully considered by Westminster, in recognition that it does have the potential to create reputational damage if it becomes a source of malicious or abusive intent. As Graham White explained:

We are conscious of the potential threat but this did not distract us from seeking to achieve the potential benefits. One of our rules is that all comments posted must be attributable. We also carefully monitor our discussion forum for any signs of misuse and employees know that such action will not be tolerated. I'm pleased to say that the forum is used in a responsible way. The key to achieving and sustaining this is in part attributable to maintaining good standards in the way the site is managed but equally importantly the employees need to see evidence that their comments count. In other words, the discussion forums do place an extra responsibility on the organisation to show it is prepared to act on good suggestions, where practicable.

Future Developments

Looking to the future, the positive outcomes and experiences emerging from the use of the discussion forums has now stimulated internal debate regarding potential new developments in the suite of Enterprise 2.0 applications used at Westminster City Council. Graham concluded:

We are constantly looking at potential new ways of using these new technologies to enhance the level of engagement of our staff with the organisation. Our belief is that there is considerable scope for further enhancements, to give our people a greater sense of voice in shaping the Council's activities. We shall also look carefully at how lessons learned internally might be applicable to our customers, strengthening and extending the organisation's value proposition to new audiences.

Case Study 3: Pfizer

This case illustrates the use of an Enterprise 2.0 tool, in the form of an internally developed wiki, to engage internal stakeholders in collaborative knowledge exchange.

Pfizer is the world's largest research-based biomedical and pharmaceutical company. It has a corporate headquarters located in New York, with several major research and development sites around the world, including one in Sandwich, Kent, United Kingdom which employs approximately 4000 staff.

The pursuit of innovative solutions and a knowledge sharing culture encourages Pfizer to embrace well-conceived and creative approaches to business practices. About 3 years ago, a small number of research scientists developed an internal shared knowledge repository using wiki technology, to help them work more effectively on their project. From those early origins, a company-wide application called 'Pfizerpedia' was developed.

Pfizerpedia (see Figure 1) acts as a central Web hub that colleagues can use to link, generate and search content authored by the global Pfizer community. Project teams may use the Pfizerpedia to share non-sensitive information both within the group and with the rest of the organisation, but it is not intended to be a system for sharing data or summarised/interpreted results related to specific compounds or projects.

 

Figure 1: Screenshot of Pfizerpedia homepage.

Its popularity has grown and it is fast becoming an online resource of first preference for R&D employees, seeking knowledge pertinent to their job role. Pfizerpedia now has over 2500 contributors creating over 5000 content pages. More than 3000 pages have received at least 1000 hits each. In total, there have been over 11 million page views and approximately 100,000 page edits since it was setup.

As the screenshot says, it is important to note that the Pfizerpedia does not replace any document management systems within Pfizer. Rather, it complements these systems by providing a way to easily link into them, while maintaining the security and authorisation controls to the primary documents.

The Development of Pfizerpedia

At its heart a wiki is just a Web content publishing tool. The concept was originally conceived as a means of providing the simplest and quickest way for non-technical users to publish Web content. The features that differentiate a wiki from most other Web publishing platforms provide some good clues as to where and how wikis are best used.

Enterprise wikis such as Pfizerpedia are often used for:

• collaboratively building documentation,
• creating and maintaining knowledge bases,
• project management,
• gathering tacit knowledge (knowledge not related to any specific project but essential to getting things done in an organisation),
• meeting management, from agenda to minutes and action items.

Popular pages on Pfizerpedia include: (i) a 'one-stop shop' for navigating the acronyms commonly used by the business; (ii) scientific 'centres of expertise' knowledge bases; and (iii) the Learning & Development 'homepage' with regularly updated information on training opportunities.

John Castledine, the Director of Learning and Development for Pfizer's Global Research and Development (PGRD) Division, reflected on Pfizerpedia's growing prominence as a learning tool by suggesting that:

For organizations that need to create and nurture an innovative culture, the development of an internal 'wiki' site can be an important element. It is certainly the case at Pfizer, where increasing evidence points towards the usefulness of Pfizerpedia in enabling our employees to share and access knowledge more quickly than before. The ability to publish freely attributed information online can help overcome any tendencies that may exist towards 'silo protectionism' or a bureaucratic approval process.

There are, however, important challenges, not least of which is dealing with the change ramifications of promoting organisation-wide access to new 'bottom-up' collaboration tools such as Pfizerpedia. This may also be viewed as an opportunity for HR professionals. John Castledine returned to this point:

There can be little doubt that for an organisation to encourage the adoption of enterprise 2.0 there must be a perceived overall benefit in doing so. To achieve sustainable change, it is vital that these benefits are presented from the frame-of-reference of the key stakeholders. We can partner closely with IT colleagues to help achieve this goal. For example, information over-load is a major concern for most colleagues. Hence without understanding RSS feeds, blogs become yet more websites to add to your favourites list. Similarly, wikis and social bookmarking (tags) offer welcomed options to reduce e-mail traffic within teams.

HR and Enterprise 2.0

John identified three steps that can be taken by HR to help drive the uptake of these Enterprise 2.0 tools.

First, early adopters (from both the scientific and IT communities) typically welcome wider interest. Hence there is a wealth of advice available within organisations for those seeking to better understand how to use the technology. HR colleagues should seek out such information, and experiment with applying these tools in their day-to-day roles. This builds awareness and credibility to partner effectively with the early adopters in wider deployment of these technologies.

In the case of PGRD Learning & Development, this approach also provided a 'quick-win' for enhancing communication with internal audiences. Creating an L&D page on Pfizerpedia provided an additional channel for advertising the training available to colleagues. With all L&D team members able to contribute to the site, more information is being shared than through traditional Web sites (e.g., all Level 1 training-class feedback metrics), and updates are published on a regular basis. This has proved popular with about 1500 hits every month.

Second, by definition the early adopters view new technologies from a different frameof reference to the majority of the workforce. Their enthusiasm alone is rarely enough to achieve a tipping point for organisation-wide uptake. Hence, the expertise within HR to guide culture-change programmes should not be overlooked.

Finally, there is a lot written about the changing expectations of Gen. Y versus previous generations entering the workplace. There is no doubt that a growing number of new starters will be familiar with Web 2.0 tools. Given that HR have a central role in talent acquisition and integration, there are clear opportunities to use knowledge of the available Enterprise 2.0 tools (such as Pfizerpedia) to help attract talent to the company.