Cutting Costs While Improving Morale With B2E Management

Many companies boast that their employees are their greatest assets, but when the going gets tough, they shed those precious assets in an effort to cut costs and boost efficiency and productivity. But what if you could reduce your costs and cultivate your employees at the same time? The Internet, which has revolutionized value-chain management with business-to-business (B2B) efforts — and retail with business-to-customer (B2C) efforts — makes it possible to do just that.

Business-to-employee (B2E) management lets companies satisfy employees’ needs while streamlining formerly time- and labor-intensive processes. By reducing organizational barriers, B2E enables people to interact more along lines of work than along lines of command. Companies as diverse as Charles Schwab & Co., Cisco Systems, Coca-Cola Co. and Delta Air Lines are setting up B2E systems that emulate B2C models and treat employees like customers. Although the verdict is still out on the long-term benefits of the approach, our research effort over the past year (including 30 interviews at companies doing something innovative in B2E and — for a better understanding of existing B2E technologies — 25 interviews with employees at software and service vendors) shows that early reactions are positive. In one Fortune 100 company we studied, executives calculated that for an initial two-year investment of $8 million, they can achieve annual cost savings of $75 million and an estimated productivity gain of 2% over the next five years. But as that company has found, the real promise of B2E lies in its ability to transform work.

A comprehensive B2E program has three components: online business processes, online people management and online services to the workplace community. (See “The Three Facets of B2E Management.”) The mode of delivery is the integrated enterprise portal. An enterprise portal gives employees one place from which to obtain not only information, but also services. It can be personalized to take into account what function the employee performs and, hence, what resources he or she needs. Fully automated processes can be conducted through the portal, whether it’s signing up for the company’s 401(k) plan or registering for and taking an online training course.

The Three Facets of B2E Management

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Acknowledgments

The authors would like to thank Chris Ward, a manager in the Atlanta office of BCG, and Clyde Seepersad, a project leader in the Atlanta office, for their substantial contributions to this article.