The Use of Technologies to Support
and Reconfigure HR Functions in
21st Century Organizational Forms
Professor Noshir Contractor
University of Illinois at Urbana-Champaign
nosh@uiuc.edu
http://www.uiuc.edu/ph/www/nosh
Center for Human Resource Management
Spring 2001 Roundtable
April 6, 2001
Productivity Paradox
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Productivity Paradox: In 1996 US companies spent 43% of
their capital budgets on computer hardware - a colossal
$213 billion, and more than they invested in factories,
vehicles, or any kind of durable equipment. In 1981
expenditure on computer hardware had been just 6 %.
Adding in all the associated costs, the total cost of
computing for 1996 was about $500 billion in the US and
more than $1 trillion worldwide.
Yet since the mid-sixties, productivity gains
have stayed below 2%.
HR functions
Compensation and benefits
 Strategic Resourcing
 Competence Development
 Communications
 Internal job rotation
 International transfers
 Staffing
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Stages of Technology Use
Substitution
Substitution
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Adoption based on relative advantage,
observability, adaptability, compatibility,
trialability
Use technologies to do old things in new ways
Organization unchanged, new infrastructure
deployed
Cost savings rather than revenue generation
Examples: Automobiles, Telephone,
Videoconferencing, Arpanet/Internet, WWW
Substitution Effects

U.S. Conference Board estimates National
secretarial pool has shrunk by more than
half a million in the past decade
Substitution Effects in HR:
Doing the same with less
 Brochure-ware
Check
phone directory
Check company policies
Check schedules: shuttles, conference
rooms, training sessions
 Automating Transactions
Employee Self Service (ESSs)
Substitution Effects ?
Stages of Technology Use
Enlargement
Substitution
Enlargement

If the automobile were invented in 1970 and
dropped in price accordingly, while
increasing features, a car would cost less
than $5 and drive 25,000 miles/gallon
(Economist, 1998)

To which the president of GM replied: "Yes,
but would you want your car to crash every
time you tried to open a window?"
Time to reach a quarter of the US population
(Newsweek, 4/13/98)
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1873, Electricity: 46
yrs.
1876/Telephone: 35
yrs.
1886/Automobile: 55
yrs.
1906/Radio: 22 yrs.
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1926/TV: 26 years
1953/Microwave: 30
years
1975/PC: 16 years
1983/Mobile phone: 13
years
1991/Web: 7 years
Enlargement
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1996: Total volume of email greater than snail
mail; total sales of PC greater than TV sets
1999: Total volume of data traffic greater than
voice; 10 fold increase in U.S. e-commerce in 10
months
Moore’s Law: Computational power doubles
every 18 months
Metcalfe’s Law: The value of a network is
proportional to the number of users squared
Enlargement
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Current 32 bit IP addresses can accommodate
4295 million devices (2exp32)
The new proposed 132 bit IP address scheme can
accommodate (3.4e38 or 340 undecillion) devices
Telecommuting grew from 4 million in 1990 to 16
million in 2000 (Telecommute America)
Enlargement Effects in HR:
Doing more of the same using less
Providing more HR access to more
employees via more devices: desktops,
laptops, mobile phones, PDAs
 Providing more individual and corporate
feedback to more employees
 Experimenting with more automated
transactions
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Enlargement effects?

At current growth rates WWW surpassed
the 29 Terra bytes of the Library of
Congress by 1998 (Wired). But ...
WWW is a library with all the books on the
floor, and
WWW is a World Wide Wait
Enlargement: Email delays
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12% of email takes over 5 minutes to be delivered
and 10% is delivered over an hour later (Source:
Inverse Network Technology, a Santa Clara
company that tests Internet performance) - Wall
Street Journal 5/29/97.
Internet drop out rate 11 percent (Jim Katz, ATT
labs, 1996)
In May 2000, the Love Bug virus struck 47
million users in 24 hours
Enlargement effects?
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“Shadow costs” of media transformation
between “Information spigots”
 Electronic:
phone, mobile, PDA, PC, printer,
copier, fax ...
 “Dead tree” editions: Memos, reports, books,
newspapers, periodicals ...
Enlargement: Network Failures
Gigalapse: A billion lost user hours during a
network failure predicted by Bob Metcalfe
for 1996 - did not materialize
 Closest was AOL's 6.2 million people for 19
hours = 118 megalapse.
 Telephones experience 30,000 people
without 5 hrs. service per day = 150
kilolapse

Enlargement: Information Gap
Emerging technologies improve the amount
of information among the “haves” and the
“have-nots”
 But the “haves” are much better informed
than the “have-nots” resulting in an increase
in the Information Gap

Information Gap
Productivity Paradox: Why?
Giving pony express riders
cell phones to call ahead to ask
for water (Neuman, 1997)
Stages of Technology Use
Reconfiguration
Enlargement
Substitution
WORK BY BID?
Coordination Theory
Transaction costs of
coordination mechanisms
 Hierarchies
(Low)
 Markets (Medium)
 Networks (High)
Organizational Forms
Hierarchy
Matrix
Network
It’s the network stupid!
(Hartman & Sifonis)
Fedex and cookies
Firm A
Firm B
Corporate level
Business unit level
Group level
Individual level
Interdependencies in the virtual organization can occur both
internally and externally and at various levels of the firm.
Surge of Network Organizations
More than 20,000 alliances formed
worldwide in 1996-98, accounting for 21%
of the revenue of America’s 1000 largest
firms in 1997 (Harbison & Pekar, 1999)
 Is the “firewall” separating the Intranet
from the Extranet the last vestige of
organizational boundaries?
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Reconfiguration: Examples I
Workplace demographics
More than half of the European work force
does not go to an office for a 9 to 5 job
(Charles Handy)
 Manpower has more employees than any
other US organization
 25 years ago 1 in 5 worked for a Fortune
500, now less than 1 in 10 does
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Reconfiguration: Examples II
Virtual teams
Longitude as competitive advantage
 Time zone differences are not a bug ... they
are a feature!
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Reconfiguration: Examples
Put your money where your mouse is
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Lowest price for me:
 Amazon.com
 Priceline.com
Lowest price for us:
 Mercata.com,
 Accompany.com.
Highest price for me.
 Ebay.com
 Guru.com
Reconfiguration of HR Functions:
Doing more “new” with more
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From Efficiency to Effectiveness
From Cost Reduction to Value Creation
From Employee Self-Service (ESS) to Employee
Self-Reliance (ESR)
 Update
personnel records
 Update 401(K) benefits
 Just in time training
 User-driven project staffing
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From Human Resource Management to Relational
Resource Management
Co-evolution of
Technology and HR function
Technology
HR functions
1. Substitution
2. Enlargement
3. Reconfigure
Adapted from Francois Bar (2000)
Challenges for Reconfiguration
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Is everyone really better informed?
From where/who do we get information?
With whom/where do we share information?
Why do we share information?
Do we use technology to publish, communicate or
dialog?
Are using COTS solutions giving us a competitive
advantage or staving off a competitive
disadvantage?
From Human Resource Management
to
Relational Resource Management
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The fundamental unit of such an economy is
not the corporation but the individual.
Electronically connected free lances or elancers join together into fluid and
temporary nets to provide and sell goods
and services (Malone, Harvard Business
Review, 1998).
Reconfiguring relationships:
Brokering information
When administration becomes ……
amnesia-stration
 Info-mediaries (John Hagel & Marc Siegel)
 Importance of leveraging knowledge capital
via social capital - The case of the Lovegety
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1. Turn on the power and set the MODE button you want with MODE
button. You can confirm the MODE you chose as the red indicator
blinks.
2. Lamp blinks when (someone with) a Lovegety for the opposite sex
to yours set under the same MODE as yours comes near.
3. FIND lamp blinks when (someone with) a Lovegety for the opposite
sex to yours set under some different mode from yours come near. In
that case, you may try the other MODES to “GET” tuned with
(him/her) if you like.
Lovegety and HR
From groupware to communityware: The
next killer app ???
 HR Project Staffing
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Overall perception
of Information flows
 Engineering/R&D is the “s
 Customer Service and
Corporate Operations clos
tied to Engineering
Information flows vie
Customer Support/S
 Customer Sup
is the “star”
 Closely tied to
 Engineering, C
and Sales/Mar
more distant
Information flows
viewed by
Manufacturing
 Engineering is the “star”
 Corporate Operations, Customer Service
are closely tied to Engineering
 Sales and Marketing are more remote
Information flows
viewed by
Engineering/R&D
 Manufacturing is the “star”
Social and Knowledge Capital
Social networks and supporting tools
 Cognitive social structures and supporting
tools
 Knowledge networks and supporting tools
 Cognitive knowledge networks and
supporting tools
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Social Networks
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It’s not what you know, it’s who you know.
Social Networks
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Nodes represent people. Links represent who knows who.
Tools to Assist
Social Networks
Tools (such as Ph, WhoIs, Four11) can help
reduce disparities in social networks
 Example: How can I get in touch with
person X?
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Cognitive Social Structures
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It’s not who you know, it’s who they think
you know.
Tools to Assist
Cognitive Social Structures
Collaboration filtering tools (such as
SixDegrees) can help individuals answer the
“Who knows who knows who” question -to find out how one may be connected to
those identified as knowledge experts.
 Example: I understand that X is an expert in
topic A. Whom do I know who knows X,
and can introduce me to X?
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Knowledge Networks
Who knows what?
 Nodes represent the individuals, project
teams, organizations, physical locations.
 Links representing the shared knowledge
could be (i) skills, (ii) expertise, (iii)
activities, (iv) interest sets, (v)
interpretations of project goals and/or
missions, (vi) work flow information.
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Knowledge Networks
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Nodes represent people. Links represent shared knowledge.
Tools to Assist
Knowledge Networks
Data bases and traditional search engines
such as Alta Vista.
 Example: I need to find out something
about topic X. Where do I get this
information?
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Cognitive Knowledge Networks
Who knows who knows what?
 Example: I need to know more about topic
X. Who in my extended (direct or indirect)
network can tell me more about topic X?
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Cognitive Knowledge Networks
Source: Newsweek,
December 2000
Summary
Social Structures are based on “who knows
who.”
 Cognitive Social Structures are based on
“who knows who knows who.”
 Knowledge Networks are based on “Who
knows what.”
 Cognitive Knowledge Networks are based
on “who knows who knows what.”
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The Answer to these Questions . .
IKNOW !!!!
Goal of IKNOW
Data Used in IKNOW
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Based on organizational members’ Web
pages:
 Links
between Web pages
 Common external links from Web pages
 Content on the Web pages
Data Used in IKNOW (cont’d)
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Based on organizational members
volunteering information about social and
knowledge resources
 Content:
inventory of skills, expertise, etc.
 Links: inventory of social networks
 Incentives for volunteering information tied to
performance appraisal and evaluation of help
provided.
So why would one want to use
IKNOW?
Makes the virtual visible.
 Adds social capital to knowledge capital
by adding contacts to content.
 While collaboration tools help improve
the process of collaboration in knowledge
networks … IKNOW helps one
effectively identify collaboration partners
and grow the knowledge network.
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IKNOW Test Beds
National Computational Science Alliance
 PrairieNet
 Center for Collaborative Manufacturing
 USAID Global Information Systems
 U.S. Army Public Works Department
 Summer Workshops and Institutes
 Virtual courses
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Shindogu?
Kawakami, Kenji (1995). 101 un-useless
Japanese inventions. New York: W. W.
Norton & Company.
… inventions that seem like they’re going to
make life a lot easier, but don’t.
… gadgets that promise to give us something,
and it is only later that we realize that their
gift is undone by that which they take away
Using IKNOW in the
Hypothetical Scenario
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Demo of IKNOW
Additional Information
Program URL:
http://iknow.spcomm.uiuc.edu/
Email for questions and suggestions:
iknow@uiuc.edu