From the discussion preparation, discuss the changes in Human Resource Management and how they affect UFIDA operations and functions. Determine if the cha

Sage Business Cases

UFIDA Group: Using Digital Technology to Improve the

Adaptability of Human Resource Management

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Author: Shouqiang Wu, Yunxia Feng

Pub. Date: 2021

Product: Sage Business Cases

DOI: https://doi.org/10.4135/9781529767612

Disciplines: Business & Management, Human Resource Management, Leadership, Organization Studies,

Human Resource Development, Organizational Performance Management, Leadership & Ethics

Access Date: April 27, 2025

Publisher: Renmin University

Online ISBN: 9781529767612

© 2021 Renmin University All Rights Reserved.

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Abstract

The year 2019 is a key year for UFIDA. Driven by UFIDA’s new strategic goals, digitalization has pro-

vided the energy to the company’s human resource management (HRM), improving the efficiency and

effectiveness. The services provided by HRM and its professionalism and even leadership have be-

come more salient. At UFIDA, the workplaces, the human resource operations, and the process of per-

formance management, and so on, have been more and more digitalized for years. Technologies and

its application have enhanced the efficiency of business operations and improved the employees’ com-

mitment as well. The three pillars of human resource management—namely the shared service center

(SSC), center of expertise (COE), and human resource management business partner (HRBP)—have

all achieved a great degree of digitization, becoming more intelligent. Based on employees’ career life

cycle, its SSC and IT department work together, establishing a sound and reliable information system.

This has become the major entry of the company’s big data. In addition, both the qualification system

and GOT (goal, objective, task) performance management system have won great popularity among

talents and employees in the company. These tools developed and promoted by the HRM depart-

ment, combining with digitalization, has helped to improve the quality of personnel decision making

and make the business better; HRBP managers have worked closely with the line managers. Such

collaborations among different departments have made the company a better and efficient workplace.

This case describes how the company has been developed over decades. Based on the above, the

functions of HRM have been introduced. More importantly, the case portrays how UFIDA Group has

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Page 2 of 15 UFIDA Group: Using Digital Technology to Improve the Adaptability of

Human Resource Management

developed its digital human resource management (DHRM), making contributions to the implementa-

tion of the strategies, providing service to the employees, and improving the efficiency for the busi-

nesses. This case is hopefully useful for the group company to design their digital human resource

management system and the implementation accordingly.

Case

The year 2019 is a good year for UFIDA Network Technology Co., Ltd. (hereinafter referred to as UFIDA). On

March 27, 2020, UFIDA released its annual report of 2019. It is reported that the company achieved annual

revenues of RMB Yuan 8.51 billion. The annual increase has amounted to 10.5%. The cloud products and

services have been especially good, achieving 100% annual growth. The company has now provided prod-

ucts and services to more than 5.43 million all over the world. In the near future, the company has already

won the momentum of sustainable development.

The above business success has reflected UFIDA’s mission over years, which is “always be the customers’

friends.” Besides, the decision makers of the company are capable of observing the opportunities in the exter-

nal environments, mastering the strategies’ turnaround repeatedly over years. The company has made use

of the technology progress, especially in the trends of mobile internet and big data. For years, the top man-

agement can analyze the situations well, designing corporate strategies well, sticking to the area of intelligent

products and value-added services. Besides, the middle management can implement strategies well. The or-

ganizational design, the HRM practices, and corporate cultures align with strategies in the process, ensuring

the efficiency of the business operation. On top of that, the employees have been motivated to play well in the

company and are very committed. All these factors work together, making the company a leading company in

the industry as well as in China.

The HRM department of UFIDA has been very innovative and entrepreneurial. They have observed that the

digital intelligent products and services provided to the customers can also be used within the company. The

professionals in the HR department have taken the initiatives, working together with IT colleagues, to build

a IT system for its own jobs, processes, and decision making. With the help of technology, the operating of

various HRM activities and processes can be achieved online, thus alleviating personnel shortages of the HR

department. In the meantime, the department can empower the line business more easily and provide the

services to employees in a very efficient and convenient way.

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“In fact, we have worked to today’s status step by step. This is never an easy and one-shot business. We HR

managers are fortunate to experience the process to our company, especially in HRM digitalization. We are

now very optimistic about our future.” Cindy, the head of COE, introduced the following.

The Development Stages of UFIDA and Its HRM

Development History of UFIDA

UFIDA was founded in 1988. At the very beginning of its establishment, Chairman Wang Wenjing put forward

the mission of the company as to be “friends of the customers.” At first, the main products were software in

finance and accounting. Because the products provided were rather various, the services were good and the

company became a leading one in the market. Among customers, the Ministry of Finance helped the compa-

ny to win its reputation.

In 1994, the company took a strategic move, establishing a nationwide service network. The channel setup

has made the business boom, laying a foundation for the company to expand all over China.

In 1998, the company was keen to capture the deep needs of customers and decided on a strategic shift

from financial software to management software. The company successfully developed the first enterprise re-

source planning (ERP) software and put it into commercial use.

In 2001, the company successfully listed on the Shanghai Stock Exchange. The success of being a public and

listing company was a great leap. In 2007, the largest industrial park in Asia, namely UFIDA Software Park,

was opened. In 2012, UFIDA released NC6 products, which created a new era of information management

for the company. The evolutionary process has made UFIDA become a group company, thus an e-commerce

platform company as well. Gradually, the group company was capable of providing customized products and

services. Besides, its R&D expenditures have increased, advancing the company’s competitive advantages.

In 2016, UFIDA announced publicly that it provided comprehensive enterprise Internet services. Thus, the

cloud platform has been established, which creates an ecological atmosphere in the country.

Since 2019, UFIDA has caught the opportunities of big-data and cloud services. The products have been

more cloud driven, more intelligent, and more digital. The size and the types of customers have also been

expanded.

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UFIDA has now become a leading company offering cloud services. Its SaaS market share has been quite

dominating. It is quite competitive in cloud products in financial and HRM areas. Due to its excellent per-

formance, it has been awarded as a “top ten cross-industry and cross-domain industrial Internet platform in

2019” by MMIT (Ministry of Industry and Information Technology) (see Exhibit 1).

HRM Function and Practices at UFIDA

Along the way, UFIDA has been actively exploring the characteristics of organization and management in the

digital era, keeping an open and curious attitude toward this “emerging and dynamic complexity.” The compa-

ny has been innovative in management as well. The head of the digital human resources business of UFIDA

believes that the continuous development and in-depth application of technologies such as “cloud comput-

ing, big data, Internet of things, mobile and intelligent” are the key forces to promote the human resource

management of enterprises into a new stage. Enterprises must evolve from human resource management

and human capital management to digital and intelligent human resource management. Managers must learn

and apply new technologies, empower and motivate employees, and establish cross-border teams to improve

organizational efficiency and effectiveness. In fact, UFIDA has been making continuous efforts in the digital

transformation of organizational management and human resource management. It not only provides cloud

service products for tens of millions of enterprise customers, but also continues to use digital technology for

self-iteration and agile co-creation.

With the diversification of business and the expansion of organizational scale, the human resources manage-

ment system of UFIDA is upgraded simultaneously. It has different roles and functions in different stages of

development. The director of the HRM department introduced the development of HRM functions and prac-

tices over 30 years.

The First Stage: HRM Provided Managerial Control, Implementing Strategies at the Same Time

At startup, the company’s business was simple, mainly providing products and services of the financial soft-

ware and ERP software. When the organization size was not big, HRM dealt with the administrative stuff,

such as recruiting, performance appraisal, compensation and benefits, and so on. Besides, the major function

of the HRM department was to provide managerial control, facilitating the company to implement the strate-

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gies. However, the company paid attention to the HRBP role in serving the line businesses. The company

university also played a positive role in facilitating corporate cultures as well as managerial training.

The Second Stage: HRM Transferred the Focus on Providing Professional Service and Method to the Line Business

Since 2012, the company had expanded business areas setting up the marketing channels across the whole

country. Both the management software market and finance software have won large market shares; more

importantly, the company has accelerated the cultivation of the Internet cloud service business, achieving the

strategic positions. It established a great amount of Internet subsidiaries across the country. The entrepre-

neurship and innovation were heavily valued. Based on the above expansion and organizational design, HRM

was encouraged to provide professional service to the line management. One important thing for the HRM

function was setting up three pillars: center of expertise (COE), shared service center (SSC), and human re-

source management business partner (HRBP). The company invested in establishing the SSC with strong

technological ingredients. Meanwhile, HRM managers have been entrepreneurial and innovative too. Work-

ing toward the same direction, the online SSC has been very well developed and utilized in the company,

enhancing the contribution made by the HRM function.

At this stage, the company also decided to motivate the key employees and managers via options. The HRM

compensation incentives have played key roles in motivating and retaining talents, which have laid the foun-

dations for further development of the company.

The Third Stage: HRM Shifted From Servicing to Empowering

Since 2016, UFIDA has accelerated the construction of a global leading business innovation platform, using

digital and intelligent technology to support business innovation of global enterprises. To help the compa-

nies to implement the new strategies at the new stage, HRM functions have been enriched, becoming more

strategic. First, the company made it clear that there are two engines accelerating the business: one is the

technologies and innovation, and the other one is the management, especially HRM. Second, the company

strengthened the important role of HRBP, which works closely with the top managers at different strategical

business units (SBUs). Third, the roles played by COE have become more vital and diversified. COE has par-

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ticipated in strategic meetings, working like a think tank in the company. The three pillars are able to empower

the strategic implementation, provide coaching to the line management, and offer comprehensive services to

employees.

Technology Enhances HRM Operations’ Efficiency and Ef-

fectiveness

The First Stage: Making Progress From Offering Information Products to Information Management

As early as 2002, UFIDA began to pay attention to the upgrading of information management. At this stage,

the information products developed by UFIDA focused on the online operation of data management in the

process of organization operation, such as the management of organization, personnel information, salary

and welfare, and so on.

In 2004, UFIDA found that there were two pressing issues to be solved in customer information data manage-

ment. First, due to the neglect of data application, after the initial implementation of online operation of man-

agement data, no further in-depth analysis was carried out, and the value behind the information could not be

fully explored. The principle and guideline of logarithmic management were not clear, and a lot of stored data

became “garbage.” Second, because of the difference of statistical caliber, the data system in the database

is fragmented, and there is no unified standard and path. More seriously, a lot of key data information has

not been recorded and uploaded, which, in the management and application, brings great hidden danger for

enterprise decision making.

The Second Stage: Using Data in Business Decision Making, Especially in HRM Areas

In 2005, UFIDA management realized that digital management at the company level was not just dealing with

online operations of data. In addition, using data in business decision making has been more important. In

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HRM operations, such logic can be very valuable.

How to do it? First of all, the data input caliber should be unified at the company level. At this stage, UFIDA

decided to use HRM-related data as the main entrance of data; thus the data management concerning staff

and managers has been maintained by the credibility and consistency of the database.

Second, the decision makers used incentive schemes, redesigning at that time. In 2006, UFIDA began to

provide equity incentives to high-ranking managers and key talents. In the database, those well-performing

employees can be tracked in the process of performance appraisal, thus increasing the objectivity and trans-

parency of the decision making. This digitalization has helped the company to solve several sticky problems.

The size of employees has increased to 10,000; the data management has helped to put the performance ap-

praisal standard, process, and system into a consistent and regular way, matching the job evaluation system

as well. Employees can easily learn their own pay by consulting the relevant app software. As to the realiza-

tion of equity plans, the data system informs the relevant employees as per the calculations and timing. Such

initiatives and technological-based measures have helped the employees to be motivated and more and more

committed to the company. They do not worry about the “pay and performance” issues anymore. Instead, the

rationality and rules provided by technologies are rather trustworthy.

In 2008, UFIDA established unified and coherent performance management practices through the whole com-

pany, developing the online system. In this way, it can ensure the effective implementation of employee equity

incentive schemes, effectively stimulating the vitality and motivation of employees. These matching manage-

rial mechanisms facilitate the businesses in a sustainable way.

The Third Stage: A Digital Platform Has Been Achieved Strategically

Since 2010, both the external environment and the internal climate have changed a lot. On the one hand,

the digital technologies at the country level have been increasingly well developed and utilized. The Chinese

government has advocated the digital economy, encouraging businesses to make the organizational trans-

formation. On the other hand, UFIDA began to carry out strategic mergers and acquisitions, which helped to

enlarge the company’s size and businesses. To implement the new strategies, the management has to be

upgraded accordingly. HRM has been put in a strategic position by the group.

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How to share data and information among different subsidiaries and branches under the group has been put

on the agenda. In the actual operation and management process of the company, UFIDA focuses on the de-

velopment of a digital human resource system and promotes it in UFIDA branches and subsidiaries. At the

same time, the HR department and the Information department of the company cooperate to continuously

digitize and systematically improve the HR business and establish a digital platform for human resource man-

agement to provide digital analysis and services for UFIDA. Among them, the post-qualification practices,

the recruitment processes, and the company culture implementation, together with performance management

and incentive schemes, have all been put into the online operations.

The Latest Stage: Cloud Service Businesses Match With Various Online Management

After 2012, UFIDA began to accelerate the promotion of the cloud service business. HRM has been both

change agents and experts at the new strategic stage. The manager in charge of SSC said, “When my subor-

dinates cried, saying: Even we have been working 24 hours a day, we couldn’t finish my jobs. I clearly realize

that the online human resource management is imperative. We must innovate and find new ways to meet the

new requirements of the company and business developments.”

After several years of effort, UFIDA’s digital human resource system has been established and utilized. Since

2015, the digital platform products have been built to cover online operations, from recruiting, selecting, train-

ing, evaluating, and motivating to exiting.

“The digital human resources platform has been closely related to employee welfare management. For ex-

ample, in the annual celebrating gathering, we use an app to encourage our employees to participate in the

design of celebrating activities. Besides, they are asked to participate in other various activities, In addition,

the honors received by employees can also be tracked in the online and on-time data system. In fact, the

online data of our salary and performance appraisal is the most valuable. Through this data analysis, we can

carry out scientific talent inventory and talent echelon construction,” the head of SSC said, full of pride.

The Salient Features of Digital Human Resource Management of the Case Company

First, the workplaces around the company are highly digitalized, which creates both efficiency and engage-

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ment. UFIDA’s products are to help customers create a unified digital workplace and improve the collaborative

efficiency of teamwork. Using the technological products within the company, the employees have improved

the communication efficiency, creating engagement and commitment. Meanwhile, the mobile communication

tools can help to build a digital working environment with high transparency and good coordination. There are

online meetings, live video, working groups, and so on. These technical means help to establish cross-de-

partmental collaboration, improve communication efficiency, and enhance employee participation. They have

a better sense of experience.

The virtual workplaces have helped the HRM to create the applying scenarios. For example, when coming

across “optional attendance practices,” employees are asked to discuss and vote for the details of flexible

attendance rules through online communication. Such a high degree of participation and real-time interaction

makes it easy to implement the new policies and practices. Another example is from the HRBP. The online in-

frastructures have enabled them to move from routine and repetitive administrative jobs, putting more energy

in the strategy-related and business-related issues. These empowerments from technologies have brought

about a sense of achievement for these HR professionals. On top of that, HRM managers are very initiative.

They have summarized the routine and repetitive issues faced by HRM. Then they provided the reference

answers for these common topics.

“In short, the use of various online communication tools in UFIDA really creates a digital workplace. In this

way, not only can we deal with many routine HR problems quickly and efficiently, but we also can make the

work interesting and enhance the employee’s participation and work experience,” the HRM managers said.

Second, digitalization supports the real-time operations of HRM. Digital human resource operation is related

to the digital operation of the HRM department. With the support of the IT department, UFIDA HRM activities

can be conducted through real-time and online means. All employee services can be done online. One ex-

ample that is often mentioned is to implement Beijing Municipal city rules about the Beijing Residence Permit

(Beijing Hukou). The HR department has signed a subsystem via the mobile end, helping the employees to

accumulate the points in an orderly and reliable way. Such online services have resulted in employees’ great

trust in the HRM managers, which improves the climate of the company.

Third, the decision-making quality has become more and more sound through DHRM. Based on a great

amount of data provided by the DHR system, line managers are empowered to find information easily and ef-

fectively. The timing and qualified information are very useful in decision making in the businesses and in the

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