ADMINISTRATION & ONLINE RESOURCES: INTERNET PRODUCTS IN WORKSPosted On: Mar. 2, 1997 12:00 AM CST
While benefit administration's front end may be undergoing a radical face lift, that venerable employee benefit information system in the back still has an important role to play.
In fact, benefit managers today can use Internet technology-the newest front room feature-to more easily access information stored on an EBIS.
Already, most EBIS vendors are pitching to their customers customized systems that integrate their existing products with Internet technology.
And other benefit administration service providers are developing "mix-and-match" systems that can connect virtually any brand of EBIS to the Internet or a company's intranet.
The Internet's cost-efficient and user-friendly point-and-click technology has piqued benefit managers' interest, information system vendors and consultants say.
This is resulting in a marketplace frenzy as vendors try to come up with Internet products to meet benefit needs.
"The pace in the marketplace is frantic," said Mark Rand, a principal of A. Foster Higgins & Co. Inc. in New York. "Software vendors are acting frantically" to provide Internet access to systems. "Everyone is talking about HR functionality of the Internet."
"Every major vendor and consulting company is offering transactional Internet capability or is promising it in the next several months," said John R. McGlone, director of participant services for Buck Consultants Inc. in Secaucus, N.J. "That is the big trend: The fact the Internet has become transactional, its utility will escalate ten-fold," predicts Jay Marchant, a principal in the Deerfield, Ill., office of William M. Mercer Inc.
Most EBIS vendors are offering the new Internet technology as a separate infrastructure, and those that are not will make that a feature in the next few months, vendors and consultants say.
At Lawson Software, for example, all the human resource and benefit applications performed on Lawson's human resource information system, or in "the back room," can be communicated over Lawson's Internet software.
"The Internet can do everything HRIS software does," a spokeswoman for
Minneapolis-based Lawson said.
The back room operations aren't not new; it's the front room that is new, she said.
But "the back room got an addition. It's a lot cooler house. One that is easier to get to and has a lot more people in it, but it's the same old house," she said.
Likewise, PeopleSoft Inc.'s Internet software "is another way to access our back room engine," said Row Henson, vp-product strategy for the
Pleasanton, Calif.-based software company.
Yet while vendors may make it sound easy, "there are always integration issues," warned Wayne Randolph, a senior consultant in the World Class
Human Resource Practice of KPMG Peat Marwick L.L.P. based in New York.
For example, "the technology may be of different vintages," he explained. He described a typical scenario in which the human resources information system is using client-server technology, the payroll function is outsourced, and all the company's employees are connected on an intranet.
"It's a real challenge," he said.
And because each company collects and stores data in different ways,
"every single benefit program that we've taken a look at is very complex," said Curtiss Butler, director of new media for Buck Consultants in New York.
"The rules that impact the payroll system vary, and there are differences between collectively bargained employees and exempt employees. It creates a complex environment," he explained.
But this demand for a single interface is what's driving competition in the EBIS/HRIS marketplace, according to Mr. Randolph, who spoke to Business Insurance while attending a human resource software convention in New York last week.
"There are basically two types of vendors here," he said.
"The old-line HRIS vendors like Lawson and PeopleSoft are creating self-service versions of their HRIS," he said. "But these don't mix or match with any other HRIS."
"Then there are another set of vendors that graft onto HRIS data," he said. "They take transactional information and download that information nightly into the HRIS. And they do mix and match with existing HRIS."
Many of these non-HRIS vendors started out offering voice response systems and personal computer-based kiosk technology to employers. But they shifted focus in response to growing Internet popularity, Mr. Randolph explained.
Essense Systems Inc. of Peabody, Mass., for example, was founded in 1991 as primarily a customized front-end, kiosk-based technology vendor, explained Hank Barnes, director of product marketing. It eventually developed interactive voice response products and late last year developed an Internet product.
Because Essense's Internet software will mix and match with any brand of HRIS or EBIS, it offers employers "flexibility," Mr. Barnes said. Employers "are not forced to wait to have a PeopleSoft or Lawson system to derive the benefits of Internet technology."
Other vendors are entrepreneurial start-ups targeting the potentially lucrative employee benefit marketplace, he said.
Indeed, according to a 1996 Foster Higgins survey, 25% of the 336 employers surveyed currently use the Internet in their human resource administration process, and 26% are planning to do so within two years.
It's the Internet's inherent adaptability that has made it possible for vendors to roll out EBIS-Internet it possible for vendors to roll out EBIS-Internet integration software so quickly, experts say.
"The beauty of the Internet is that it connects to any platform," said Buck's Mr. Butler.
"It doesn't care of you're operating on a mainframe, a midframe or the very latest version of client/server technology," added Mr. McGlone of Buck. "The Internet is just a highway; it doesn't matter what kind of car you drive. It could be a '57 Chevy or a Bentley."
The EBIS, or HRIS, "is really just a consolidated information data-base"-like any other Internet server, Mr. Butler explained.
Realizing this, it's easy to see how an employee benefit "home page" on a company's intranet can serve well as the front end to an EBIS, Mr. Butler said.
But some complications occur when each HMO or mutual fund manager offered by a company has its own enrollment system available on the Internet.
"There needs to be a central point of entry," he said. "We (Buck) want to put a consistent face on this for the employee."
Currently it's easier for an employer to establish an Internet connection with a single benefits provider, he said.
But "there are a few (HRIS) companies that have started to recognize the need for consolidation of databases," Mr. Butler said.
Eventually, a single interface might make it possible for employees to search all of their company health plans' primary care provider directories at once, he suggested.
At the moment, Lawson is capable of building multiple provider links to and from an employer's World Wide Web site, the company's spokeswoman said. But this so called "extranet" is not part of Lawson's standard product right now, she said. "We're a little ways away, but not too far," she said.
PeopleSoft also has the capability, and its extranet will be part of its next standard release, Ms. Henson said.
Other vendors, such as San Diego-based xyberNET, also are developing a single Internet interface.
"We feel the Internet will be one access point," said Joseph S. Bigley, chairman and chief executive officer. "Our goal is to provide a family of products that allows employers to manage all of their benefits with one system-whether it's on a TV or a PC."