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Editor’s note: On the global human resources market, the SaaS model based on Cloud Computing still takes the lead. New technologies like cloud computing, mobile device aggregation and social networking will lead the change in the future HR field.
While the good and flexible use of “internet” serves the traditional HR business, we must contemplate on and actively try out reforms and innovations on the existing operation mode, profit mode and development mode. Shanghai Foreign Service Co., Ltd (SFSC in brief) has exerted active efforts and explorations in adapting to the internet environment and vying for the internet business opportunities. We therefore invites Dai Liu, Chairman of the Board of East Best & Lansheng Group – the mother company of SFSC, to share his ideas with us on the development of HR business in internet times.
Norm-abiding and Innovation-striving ——
New Stride of “SFSC” in Internet Times
For many years, SFSC has been adhering to the “SFSC China” Strategy, its business covers over 350 cities across the country, and 85 per cent of the Fortune 500 Enterprises in China have chosen SFSC’s service. From the very beginning of its establishment, SFSC has been leading the development direction of the country’s HR market. In 2013, the revenue of SFSC registered 62.1 billion yuan and its net profit recorded 500 million yuan.
Explore the Business Opportunities of Internet
Reporter: As a local state-owned enterprise in Shanghai, SFSC has all the time kept its leading position in the domestic HR market. Meanwhile, we have noticed that the HR business outcome of SFSC have derived from “connotative” development. But in the face of the new market and technical environment, the “connotative” development has been unable to support the development strategy of HR business, namely, internationalization, specialization and branding. So what’s plan of SFSC in such kind of situation?
Dai Liu: For many years, SFSC has made active efforts and explorations to adapt to the internet environment and to vie for internet business opportunities. At first, I’d like to talk about the enlightenment from domestic e-commerce mode on the HR business.
Currently, the domestic e-commerce mode is mainly divided into three types. The first type is the platform operation mode such as Taobao.
The platform mode is of great referential significance for the development of HR service business. Comparing with commodity industries, the HR business doesn’t deal with physical products, which is one of its distinct features, and its product is mainly “service”, aiming to help its clients reduce cost, increase efficiency and create value through professional, all-round and effective service. The professional level of service decides the quality of “product” in the modern service industry.
As far as the specialized HR business is concerned, the platform mode can bring into full play its unique advantage, which is like the “commercial real estate on the internet”. Take SFSC’s business benefit service for example: On the one hand, the business benefit platform of SFSC grants the service providers with 1.25 million relatively regular and high-end users (taking into consideration the family, the number of users will multiply); on the other hand, the platform effectively integrates a full range of physical products and living service and provides rich choices for the employees and thus greatly improves the experience and satisfaction of the clients. More importantly, the income from ads and rate of flow have created a new profit growth point for the enterprise while promoting the competitiveness of the main line of business.
The second type is the B2C mode with representatives like JD, YiXun and Amazon China.
SFSC is the seller of products and at the same time the researcher and “manufacturer” of products. Different from the ordinary B2C mode, SFSC adopts the mode of integrating C terminal (Customer) demand, forming service products and scale advantage and obtaining the negotiating and bargaining right with the B terminal (Business) and finally transferring such advantage to the employees we are serving.
The third mode is consignment operation mode, the representative of which is VIP.
As for SFSC, it is a tool the company employs to expand its business. More or less, the HR industry has characteristics of locality. The HR policies differ from provinces and municipalities because of unbalanced regional development and living standards. When first entering a local market, the company can avoid policy risks, rapidly know about the local market and efficiently lower the market entry cost by seeking the help of a third party who familiarizes the HR business and the local policies. Expanding across China and entering the international market through mergers and acquisitions will be the development plan of SFSC, so finding the consignment partners in the target market may also be regarded as a “path-finding” means featuring low risk and low cost. Once we have chosen such means, the relevant standards and databases like competence appraisal and credit rating system of SFSC and the cooperative company must be synchronized.
Create Core Competitiveness Based on Mobile Internet Application
Reporter: Can you introduce about the “Net-touching” practice of SFSC in conducting its HR business?
Dai Liu: The application of Mobile internet technology has become one of the core competencies of SFSC.
First of all, the service is operated online. SFSC only has about 3,000 professional employees, but they have to serve and manage numerous B terminal (business) and C terminal (employees) clients, so online service operation has become an important technical platform to support such service system. With the internet as the interface, SFSC’s “Sol Cube” system platform connects with SFSC’s HR service operation system and online clients data-exchanging system as well as the business flow, service flow and information flow of the national service chain management and control system. It provides the clients with nationwide online inquiries of real-time service information and meeting the needs of cross-regional clients in rapid communication, delivery and inquiry.
Secondly, the data processing is intensified. On the basis of informationization support, SFSC put forward at the first time within the industry the management norm of standardized, informationized and intensified service and management. Through concentrated data management, the large-scale transactional data of SFSC is becoming the core of this industry and the HR sector to conduct big data decision-making.
According to the statistics, just in 2013, SFSC provided various enterprises with 3 million items of various talent management matters, 6 million times of salary and remuneration data processing, 108 million times of employee welfare matters and 30 million copies of professional service reports. The datum for each service has become one part of SFSC’s large HR data base.
SFSC currently owns the largest HR data management and analysis center in China. By employing the data, we can find out the challenges and opportunities in China’s HR management field. It can provide supportive service for the nationwide HR decision-making in a multi-angled and all-round way in terms of talent supply and demand, talent cost, talent management, talent motivation and labor-capital relations.
In addition, the information interaction becomes mobile. Driven by the new mobile technology, SFSC has taken the lead to launch the intra-industry mobile client terminal, aiming to push forward the comprehensive mobility of interaction.
A comprehensive mobilization of information is in steady progress in the fields like the entry and demission of employees, employment consultation, salary inquiry, physical check appointment, insurance claim, benefit package choice and training. The enterprise clients and employee clients are provided with mobile real-time service entrance and their online experience will continuously be optimized.
Finally, make the industry integration platform-based. SFSC aims to create a platform integrating the HR industry or a one-stop service solution platform by employing the mobile client terminal, online service and big data management. The platform will cover the service solutions in multiple fields including HR agency, talent dispatch, payroll management, employee health management, employee benefit management, business process outsourcing, consulting and training service. The platform will integrate the excellent industrial resources in the society to serve the clients and will further make the service rich and refined.
How to Make Full Use of Internet Technologies?
Reporter: Mobile internet technology will become the technical base for the future HR Service Enterprises to live on. In the HR service industry, how do we handle well the application of internet technologies?
Dai Liu: The biggest opportunity of the internet industry lies in how to make full use of its own network advantage, technological advantage and corporate management advantage to promote and transform the offline and traditional industries, to change the development pace of the current industries, to establish new game rules and to push forward the whole society to progress.
The clients of HR enterprises are basically the same as those in the traditional business. What’s different is the products the traditional business provides are physical products, while the products the HR enterprises provide are based on service, which means our product design must include four elements: user, context, process and object (namely the product itself). In service design, the products can be tangible or intangible – each link interacting with the users constitutes one part of the product. In addition, the characteristics of the users, the change of process and the application of the scenes deserve more consideration. Service design requires our attention not only to the product itself but also to the touch-point where we interact with the users. The scope of user’s experience expands from “product” to “the whole service process centering on product”. The various types of touch-points associate with the users and the experience is thus formed.
“Norm-abiding and Innovation-striving”
Reporter: You have put forward the “Norm-abiding and Innovation-striving” strategy for the development of SFSC in the next 5-10 years. What is your consideration based on?
Dai Liu: SFSC has walked through 30 years; the Reform and Opening-up has made SFSC successful. In the next 5-10 years, the company will continue adhering to its main line of business and become more professional. SFSC aims to be on the list of “Fortune 500 Enterprises”, but if scale conflicts with quality and efficiency, the latter one must be ensured instead of blindly expanding the scale. This is what “norm-abiding” means.
The tactics must be “innovative”: According to military theory, the best “defense” is “attack”, which means to achieve success with original ideas. In the internet era, the influence on traditional business is beyond imagination, so in the face of challenge and influence, the only choice is to realize transformation through reform. As a state-owned enterprise with great competitiveness, SFSC must fully motivate the wisdom and intelligence of the managers in its future reform and development and “achieve success through innovation” based on the new market, new product, new technology, new model and new mechanism.
The quality must be “norm-abiding” or “standard”. For “quality” creates “brands”. Service quality is the life line of modern service enterprises and the base of corporate development, and the “base” should be firm and solid at any time. In the context of internet, when an enterprise is equipped with new technologies and new tools to innovate models and systems, it should always center on “service quality” so that an evergreen brand can be created and always becomes popular.
The variety must be “innovative”. It’s hard to say that SFSC’s service varieties can meet the needs of Adecco and Randstad, but it doesn’t mean we cannot do what they have not done. China’s HR products develop from the demands of domestic HR market, so there is no precedence and no need to follow the international benchmarking enterprises. Internet technology is of great importance to the development, application, popularization and upgrade, and it can effectively shorten the product’s R&D cycle and expedite the profit-making of new products; besides, the enterprise must spare no effort to study and use the new technology and new mode of internet as well as the new ideas to interconnect the individual products so as to form synergies, such as “making the fingers into fists”.
The framework must be “upright”. During the first round reform of state-owned assets and enterprises in Shanghai, the government stressed the importance of “driving the reform of SOEs with the reform of state-owned assets”. As the state-owned asset and a state-owned enterprise, SFSC must conscientiously grasp and implement the reform requirements of the municipal party committee, the municipal government and Shanghai SASAC, actively probe into the framework of mixed ownership centering on “asset capitalization and capital securitization”. The choice of SFSC’s reform route and means must strictly base on the decisions of the municipal party committee and government, and the company must strictly obey the laws and regulations and march forward with innovations.
The conception must be “innovative”. The innovative concept must be based on the “norm-abiding” structure. SFSC must first be a learner, be brave to be a pursuer and strive to be a pacemaker. We must conscientiously study and learn from the world’s advanced enterprises the management experience, capital operation experience and successful cases of internet application. After all, we must make full use of the “internet thinking” to timely respond to the news changes in markets and new technologies. We must be bold enough to actively propel the various items of reform and development of the enterprise by employing the “bottom-line thinking” and “transposition thinking”.
Deeply Explore the Internet Field
Reporter: In the future development, how will SFSC avail itself of the internet opportunity to help with its business upgrade and mode innovation?
Dai Liu: In the future, SFSC will further strengthen the exploration into the C terminal (individual). In the past, SFSC’s success was mainly in the B terminal (enterprise). With the business of C terminal unfolding, SFSC will not only provide the employees with service related with their work, but also provide service covering their free time. These needs and service will be recorded as data by means of internet technology. For example, we provide our clients with time and fee recording software. On the one hand, the clients can use the software to record their work time and amount for the future reimbursement; on the other hand, SFSC can use the recorded information to promote the service breadth and accuracy through analysis and matching. With the accumulation of data, the enterprise can better know about the clients’ purchase scope, demands and consumption habits, thus exploring the accurate, individualized intelligent service and innovating the business modes; meanwhile, it’s good for the enterprise to enhance the users’ loyalty, develop new products and service and reduce the operation cost.
Instead of just limiting its innovation in C terminal, SFSC will actively explore internet-based solutions on B terminal. Most of the enterprises we serve are medium and small-sized enterprises, for which informationization will cost them large amount of manpower, material resources and energy. And what’s worse is their efforts will not pay off because they are not familiar with the industry and don’t have sufficient resources to handle this.
SFSC is planning to provide these enterprises with Cloud Computing solutions, helping them improve competitiveness and reduce operation cost. SaaS is a software application mode following the development of internet technology and maturity of the application software. The clients can order through internet from SFSC the HR application software service according to their own needs, which will save their resources in software R&D, design, maintenance and upgrade. Through such means, SFSC will expedite the development of the medium and small-sized client enterprises and strengthen the their loyalty with us.
(Reporter: Hu Yali)
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