Improving Your HR Service Delivery and HR Effectiveness
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1 IBM Global Business Services Improving Your HR Service Delivery and HR Effectiveness April 16, 2009 Heejung Yoon Senior Managing Consultant, IBM GBS Human Capital Management
2 Unprecedented economic uncertainty requires an greater focus on specific talent management activities Human capital management in an economic downturn: Seven key areas Make resourcing decisions based on the organization s capabilities and gaps Focus attention on core vs. non-core work activities Differentiate high (and low) performers across the organization Transfer critical knowledge and stimulate social network development Consider the use of more flexible work environments Identify opportunities to improve HR and learning efficiency Enable leadership to guide individuals through the change 2
3 Market research shows a strong link between business performance and investment in Human Capital practices Source : Watson Wyatt Research, June
4 What does the research say? Organisations that have implemented HRMS appear to be reaping the promised benefits. More than two-thirds of participants reported payback on their HRMS investment within three years with one-third indicating a three-year payback period. (IBM Global Human Capital Survey Jan 2003) Organisations investing in B2E applications and administrative processes can realistically expect average reductions in the process costs of 50 percent and a payback period of 3 years. (cedar 2002 HR Self Service Survey) On an overall basis Giga believes that HR departments can reduce time spent on administrative work by 40% to 50%. (2001 GIGA Information group) 4
5 HR Transformation is about creating the 21 st century strategicallyminded and enabled HR organisation The business priorities shape the Human Capital agenda As people challenges including cultural development, leadership and collaboration become a critical part of achieving innovation, the Human Capital agenda must evolve CHROs are challenged to ensure the right balance between strategic effectiveness of HR and operational efficiency of the function The decision to build or buy skills becomes central Retaining key people when facing a shortage of supply is critical Organizations must measure and reward executives and the HR function by how they deliver on the critical talent agenda Developing skills to support growth, innovation, differentiation and customer satisfaction becomes a top priority Collaboration across the company, channels, and customers is needed to transform work A variable and efficient cost model for the HR function with high service levels is required Organizations require many delivery channels to ensure employee and manager access CHROs must be able to demonstrate the link between Human Capital activities and business results Source: More than 300 organizations and 100 CHROs IBM Global Human Capital Study,
6 People & Process Costs: A Significant Opportunity 30% Compensation 1% HR Admin 8% Benefits 57% Other Operating Expense Source: Saratoga Institute, Talent Market Group 4% Staffing 43% People costs 6
7 IBM Global Business Services What is HR doing to respond to the challenge?
8 HR needs to TRANSFORM to reduce cost structures and be in a position to provide leadership TOMORROW TODAY Role of HR TODAY Procedural Strategic HR Partner HR Leadership The HR Function Duplicated Administration Shared service HR On Demand Enabling Technologies Payroll System and Personnel Database Integrated HRMS with Self-Service The On Demand Workplace 8
9 Value HR Transformation describes the road of change for an HR organisation The choice for a client is not whether to insource or outsource, it is how far to travel down the HR Transformation Continuum Opportunities Shared Services Across business units countries Common Processes Process Improvement Streamlining I/T systems providing data analytics Consolidation of ERP platforms ERP Implementations Automation Achievable Organically Full use of self service tools Transformational Outsourcing Step 1 Introduction of self service tools Outsourcing selected HR Processes Time Achievable through internal Shared Services Tomorrow s HR Delivery Model Global Vision Step 2 Single outsourcing partner accountable for total HR services Achievable through Business Transformation Outsourcing Step 3 Global sourcing Economies of scale Variable cost structure Leverage technology Expand self-service mindset Enhance data accessibility Deploy best practices 9
10 What does HR Transformation mean in terms of change? LEADING PARTNERING Leading to create workforce effectiveness Partnering to meet evolving business needs SUPPORTING Supporting the basic needs of the business Role Transformation Operational Excellence Affecting Change Strategic Planning ~10% Process Redesign Employee Service ~30% Integrated Systems Optimizing Human Capital Administrative ~60% Selective Outsourcing Current State Transition State Future State 10
11 Components of Transformed HR Organisation Input Challenges/ objectives Best practice models Customer requirements Transformed Human Resources Improvement driver Simplified and globally harmonized HR policies ( what to do ) HR processes ( how to do ) Global IT platform New HR operating model 11
12 Improving effectiveness and efficiency with the major HR building blocks Strategy Performance Enhancement Developing, delivering and using HR products and services that have a productive impact on the workforce and the organization. Effectiveness Business Partners Centers of Expertise Transactions Administration Efficiency Reducing the resource demands and time required to develop, deliver and use key HR products, services and processes. Shared Service Center 12
13 Emerging/evolving roles of HR Think Co Corporate/Global HR Touch Co Business Advisors (Divisional HR) Divisional customerfocused Divisional HR strategies Tailored HR solutions Line managers are primary customer Enterprise HR strategy Change leadership Innovation Business intelligence Governance Serve Co HR Customer Shared Service Centre and Self Service Tiered Service Delivery Technology enabled Aligned and integrated internal consultants / outsourced vend or managed services Low cost / high value products and services 13
14 Measuring the value of HR to the business Most HR organisations are challenged to define and measure how HR adds value to the business. HR s value proposition is derived by answering three fundamental questions. What is the Value Proposition of HR? Are Are we we meeting meeting our our strategic strategic needs? needs? Are Are we we meeting meeting our our customers customers needs? needs? Are Are we we optimizing optimizing our our service service delivery delivery processes? processes? Are we helping to Are we helping to deliver corporate deliver corporate strategy? strategy? Are our Are our present present services services satisfying our satisfying our customers? customers? Do we have Do we have adequate service adequate service levels? levels? Are we developing Are we developing future services that future services that better meet customers better meet customers needs in a timely needs in a timely manner? manner? Are we contributing to Are we contributing to the company s financial the company s financial goals? goals? Performance Drivers Customer Service Index Performance Measures Performance Measures Performance Measures 14
15 HR Service Delivery is it focused on operational efficiency? Decreasing costs Managing HR policy and procedural knowledge Maximizing lowest cost delivery channel Integration with external providers Increasing the efficiency of HR service delivery Linkage between HR applications Increasing productivity of employees Data quality and consistency Collaboration tools Easy, one stop help Capturing realizable data and metrics to enable analytics Meeting employee and manager demands for access and control Meeting key HR customer needs Increasing the Value of HR 15
16 HR needs to transform itself the total picture Where we are now How we get there Where we are going Costly duplicate HR structure 10% Strategic Planning 30% Customer Service/ Consulting Administration 60% HR service delivery model deployed 20% Strategic Planning 60% Customer Service/ Consulting Administratio n 20% Lean, strategic HR organization Tactical non-standard HR processes Standard end-to-end processes implemented Policy Program Delivery Design Technology Data Administration Standard end-to-end HR processes Multiple access channels, unleveraged technology Self-service and technology support implemented Self-service, leveraged technology High costs, low value Cost/Employee Low perceived value in strategic priority areas Cost Value Cost/Employee Increased customer satisfaction Cost/Employee Strategic value add Competitive costs, strategic value Undefined governance and buy-in???? Change management and communication executed Revised partnership between HR and businesses, and within HR 16
17 To obtain business results, HR is changing the shape of its service provision through HR Transformation Most organisations want to move their non-core HR activity to a highly efficient, lower cost delivery model HR activity is concerned mainly with Employee Lifecycle events and Query-Handling most of which involves interaction with employees or managers at some stage of the process 20-40% Current State Future State Cost Savings 15% HR Strategy and Policy 15% Customer HR Organization Customer HR Organization 30% 55% HR Subject Matter Experts HR Administration 10% 20% 50-60% 30% 40-50% BPO Outsource Shared Services and/or BPO Provider 25% Automation & Self Service 17 Technology Enabling Change
18 ..and Major Organisations are implementing a Tiered HR Service Delivery Model Tier 1 Tier 2 phone Assisted Service Generalists Specialists In-Country HR Workstations/kiosks Tier 3 Tier 0 web Self Service Customers Case Mgmt Tool Service Center Tier 3 Local compliance, Planning Business Partners Process Owners Intranet Other employee data (legacy apps) HRIS Knowledge management DW 18
19 A 4-tier Model will help by leveraging technology and best in class processes Tier 0 Tier 1 Tier 2 Tier 3 Employee and Manager Self-Service Employee Interaction Center Subject Matter Experts Business Partner & Center of Expertise All Employee Access Via Interactive Voice Response Generalist: Provides employee support, processes transactions, handles FAQs and conducts basic research SME: Provides complex solutions and transactions, administers policy, conducts in-depth research, resolves issues CoE: Development of policy and strategy, policy interpretation BP: Operationalizes HR strategy to business-specific needs Knowledge Base and other ESS/MSS Solutions Accessed via Web/Wireless Devices 80 90% of Contacts HR 10 20% of Contacts 19
20 How efficient is HR Service Delivery today? HR professionals time is predominately devoted to administrative activities How is time spent by the average HR Professional? Program/ Policy Design Professional Service Delivery Administration 5%-10% 35%-40% 30%-60% * * HR on the Web Investigation Report - June 1999 HR professionals time is predominately devoted to administrative activities because: HR Processes are not integrated, they are also highly localized, and customized Web/Self Service is not used as efficiently as it might be Access to HR services is possible through multiple / concurrent channels HR will customise upon request (e.g. incentive compensation) - this results in platinum costs HR is too focused on Exceptions Management (e.g. incentive compensation) and the minimization of complaints / conflicts 20
21 Administrative activities absorb the largest part of an HR department s time 38%+ of an average HR department s working hours are spent on Administration, Payroll and HRIS maintenance and support. Payroll 18 HR administration 17 Training and education 10 Recruitment and selection 9 M anagement 7 Compensation and benefits 5 Health and welfare HR policy 4 4 HR information systems M anagement development Performance assessment Industrial relations Organisational development HR planning Job design Redundancy 2 2 Expatriate management. 1 Other Source: PwC EMEA HR Benchmarking
22 IBM has transformed its HR Function to respond to the business needs Business Issues: Reduce overall spend associated with HR service delivery Improve service levels for IBM employees Implement and e-hr solution Scope of work: Creation of Employee Portal Linking following tools to Portal Employee Self Service Transactions Management Self Service Form morphing to put forms into native language Base Pay Planner Personal Business Commitments Performance and Evaluation tool Training Administration Training Delivery Time and Attendance Enterprise Directory HR Transformation to re-engineer process and procedures to leverage technology investment. IBM Prize: Saving of over $1 billion across the enterprise. Highly efficient platform on which new functionality can be built Trusted source of news and information for employees Achievements: ROI: -- e-learning - over $350 million in 2001 Customer self-service - over $700M On-line Health Enrollment - over $1M in 2000 Blue Pages - estimated $10M Consolidating News Sources - $2M HR Process Reengineering - reduced costs by 40% and increase satisfaction to over 90% Transformational: A key tool to facilitating the integration of IBM from the dis-integration strategy of the early 90 s W3 is the most useful and trusted source of information for IBM professionals to get their work done Consolidated 6 HR / Payrolls to 1 Instituted HR re-design Electronic a Pay Key Statement Reason IBM leads in e- revolution. Cost Variable-ized costs Self Service for HR / Payroll Changes HR Electronic Jacket Imaging HR Delivery Cost Time Reduce headcount Performance Improvement Attract & Retain Talented Staff Web HR Information Delivery Centralized Worldwide HR Reporting HR Staff To Employee Ratio HR Cost Per Transaction IBM s Journey Early 90 s 2002 Strategic Outsource of Selected Services 22
23 Real Operating Results Using PeopleSoft HCM $20 million in direct cost savings through self-service HR 54,000 employees live in less than nine months North America 200% ROI expected on collaborative apps and HCM suite Self-service alone generating $10M direct cost savings $128 million direct cost savings from HR self-service 300 FTE staff reductions 65% reduction in HRIT costs by implementing single instance Removed 127 servers and 14,000 terminals 23
24 IBM Global Business Services Why choose IBM for PeopleSoft implementations?
25 IBM & PeopleSoft Partners in Excellence The PeopleSoft Award of Excellence recognizes alliance partners with: Best customer satisfaction ratings Highest worldwide performance in the areas of sales and services teaming Most dedicated resources Largest revenue growth In addition, IBM has received numerous regional Business Partner awards from PeopleSoft over the last several years. 25
26 Vision-To-Value PeopleSoft Implementation Method Define Design Build Transition Benefits Realization Organizational Readiness Mobilize Design Review Board Business Modeling & Application Design RICE Build Prototype Build Application Testing Mobilize Business End User Training Initial Scope and Requirements RICE Design Organization Alignment Acceptance Testing Planning & Initiation Test Planning End User Training Development Rollout Solution Definition Organization Design End User Training & Documentation Integration Testing Transition Planning Post Implementation Support Define Checkpoint Design Checkpoint Build Checkpoint Transition Checkpoint ARCHITECTURE DOMAIN WORK STREAM Project Management ACTIVITY DOMAIN KEY Application Domain Architecture Domain Business Domain Engagement Domain Operations Domain Organization Domain 26
27 IBM ADT: Accelerated Deployment Toolkit for PeopleSoft Implementation Managers Toolkit Country and IT Assessments Kick Off Presentation Fit Gap Presentation Global Processes Global Reports Scope Document Project Plan Configuration Workbook Data Mapping Templates Conversion Scripts Training Materials Security Workbook Go-live Hand Over Pack 27
28 Tools are an integral part of PeopleSoft Global Delivery Global Quality Management System (QMS) PeopleSoft Vision-To-Value Methodology Effort Variance Measured Results Effort Variance DER's Project A UCL Schedule Adherence Defect reduction On-budget delivery Service Level Compliance LCL Mean Community Knowledge Management Tool RPM / Knowledge View 28 Tracking / Management Tool
29 Tools are an integral part of PeopleSoft Global Delivery Rational Portfolio Manager usage for Oracle ISV Plan Report Extract Assign Record Generate Metrics 29
30 IBM & PeopleSoft Partners for Success IBM GBS has been involved with over 1000 successful engagement across PeopleSoft s entire suite of applications, in over 50 countries around the world. Financial Services Distribution Industrial Communications Public Sector IBM GBS has been involved with more than 480 v8.x projects globally to date, serving over 250 different clients. 30
31 KOREA delivery PeopleSoft HRMS projects 현대캐피탈 -Implementation PeopleSoft HRMS 동양그룹 -Implementation PeopleSoft HRMS IBM GBS, First & Only Winner of PeopleSoft Solution in Korea!! 31
32 IBM & PeopleSoft The Comprehensive Choice Consulting: 2,000 PeopleSoft consultants Deep Product Expertise Industry and Process focus Global Hosting Partner Global Financing Largest IT Financier Asset base of over $30 billion 125,000 customers 40 countries Match cash flow to business benefits Technology: Joint solution development Numerous PeopleSoft/IBM technology projects IBM components built right into PeopleTools - OSL, DB2e, WAS Joint Initiatives: ianalytics / EPM B2E / Portal CRM Accel Financial Services Utilities Higher Ed - Student Admin Automotive Dynamic Workplaces Life Sciences SPDE Customer Centricity E-Business Hosting Variable Pricing Structure-Align with Business Volume Limited Upfront Investment Risk Mitigation Leverage IBM Expertise Customer Support: Joint competency centers Seamless problem handling Platforms: iseries xseries pseries zseries Storage 32
33 Questions? Contacts: 신원무, Global Partner 윤희정, 수석 Consultant 33
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