Case Study. Veyance HRO during M&A
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- Marsha McLaughlin
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1 Case Study. Veyance HRO during M&A 2:30-3:15pm Track A October 22, 2008 Laura Domchick, Director of Global HRO for Veyance Technologies and Hank Johnson, EquaTerra, will present a session addressing the real world topic of creating and executing a global HR transformation strategy including HRO in a divestiture situation within a short time frame. Veyance spun off from Goodyear in August 2007 and operates in 22 countries and includes manufacturing, operations, sales, and corporate functions. Areas to be discussed include alternative service delivery models, scope of work trade offs, change management, lessons learned, and the highs and lows of finding an HRO provider to partner with Veyance in a fast moving environment. Copyright Veyance and EquaTerra All rights are reserved 1
2 Current State Review Spun off from Goodyear (purchased by Carlysle) in August 2007 Operate in 22 countries and includes manufacturing, sales, and corporate functions Parent company Transition Services Agreement expiring Summer of 2008, continuing on month to month basis 15 Countries, over 60 workstreams Encompasses technology and process workstreams Prioritize by urgency, complexity, and dollars System and Process Complexity Over 120 HR Systems (incl some spreadsheets) Systems disconnected & inconsistent Due diligence highlighted current complexity Policies and processes were decentralized Limited resources and subject matter expertise Cost pressures 2
3 Growth Veyance Business Strategy Agility & Flexibility (M&A) Global company operating globally Value Creation Talent Management Focus Build on the legacy of Goodyear but create a whole new identity and execution oriented culture 3
4 Veyance HR Strategy HR Vision: Simplicity, Synchronization, Speed, Success Global visibility & alignment between business strategy and HR strategy HR organization structure is nearly complete Governance related to global vs. regional vs. local solutions is implemented Communication is key Standardized policies, processes, and appropriate technology are in place and operational Service Delivery Model is scalable Transition plans account for TSA expiration dates, risk mitigation issues, and business growth strategy 4
5 Recruitment to Retirement HR Workstreams Recruitment to Retirement HR Workstreams 5
6 1. Time Challenges 2. People (internal resources) 3. Balancing two priorities (by country / by process) 4. Managing globally 5. One time investment Technology People support 6. 2 nd Generation HRO buyer Definition of Success: HR solutions are implemented within required time frames, solutions work and are cost effective. Solutions 1. Role clarification, Decision making, Urgency 2. Outside help EquaTerra, external legal counsel 3. Need to haves vs. nice to haves, scope definition 4. Engaged global leadership early 5. Wise Investors 6. Battle scars and perspective helped to drive what was really important 6
7 HR Transformation Pulling the Right Levers Change Levers External business drivers Internal business strategy Technology Process Governance Practices Improved Business Results $ Policy Organization Structure People Risk Management Change Management and Communication 7
8 Why Did We Spend So Much Time On The SOW? Data Collection SoW Governance Service Levels Contract Schedule Transition and Transformation 8
9 Identif y Issue Inform appropriate parties Urgent issue with adver se business i mpact? N o Yes Provide input (if necessar y) Notify Client SVP HRSS and Contract Mgr. Provide input (if necessar y) Meet with Hewiitt to resol ve issue Document outcome and implement solution Yes Issue resol ved? No W eekly Issue Review Meeting Assign owners, target date of resolution, priority, and business impact Review and attempt to resol ve outstanding issues Ye s Issue resol ved? No Complete Notice of Dispute Subject Matter Experts Focus On Governance From Day One Issue Management / Escalation Process DRAFT Client SVP HRSS Client Contract Manager Client Relationship Manager Client Accounting Manager SP Operations Manager SP Account Executive SP PMO Price Base Services Pricing New Services Pricing Chargeback Consumption Add/Change Providers New Services Change/Delete Services Project Initiation And Authorization Quality Production Acceptance Deliverable Acceptance Contract Change Invoice Approval Service Credit Approval Issue Closure Dispute Resolution SLA Change Standards Strategic Direction Corporate Standards Audit Response Regulatory Compliance Business Units SVP HR Sourcing Office Hewitt Workstream Relationship BU s Governance SVP Contract Account Operation PMO Acct Service Leads Managers Committees HR SS Mgmt ing Mgmt Mgmt Delivery Mgmt Mgmt Businesses Dedicated resources from TMOC Step 1 Step 2 Step 3 Step 4 Management Processes Relationship Management Financial Management Contract Administration Performance Management Decision Rights Responsibility for Key Decisions Documented RACI Diagram Guide for all parties Governance Organization Reporting Structure Roles and Responsibilities Businesses Units Executive Steering Committee Strategic Initiatives Council Customer Council Business Partners GOVERNANCE PROCESSES & COE s JOINT STRATEGIC COM HR GBS and Service Providers Committee Structure Strategic Direction and Decisions Linkage to Business Strategy Business Representation Linkage to functional organizations Linkage to Functional Processes Critical Veyance Knowledge Balanced Workload 9
10 Maximising Cost Savings? Sourcing Dimensions?? Maximising Organizational Comfort Scope Process Scope Geographic Scope Languages Desired Process Maturity Delivery Model Delivery Style Delivery Channels Service Delivery Locations Delivery Model Consistency Resources Use of Delivery Assets In-scope People Severance Approach Retained People Change Approach Transition Phasing Approach Transformation Phasing Approach Technology HR Technology Approach HRMS ERP Other Technology Relationship Pricing Model Reliance on Pricing Transparency Desired Relationship with Provider Desired Contract Term 10
11 Sourcing Timeline Summer/Fall 2007 Data collection, RFP Release, RFP Response and Pricing Review, Down select to one provider Winter 2007/2008 Solution sessions, site visits, T&Cs discussions, final pricing, negotiations February/March 2008 Negotiations stall on key issues with selected provider Ceridian engaged for the first time late February Ceridian completes RFP, provides pricing, solution sessions, site visits Spring 2008 Negotiations completed with Ceridian Implementation work begins October 2008 Phase I completed on time, on budget Phase II to be completed by
12 Ceridian Scope Managed Payroll & HRIS (US and Canada), Multinational Payroll (2 countries) Salaried Time and Attendance (US and Canada) Managed Health & Welfare (US) Employee Service Center and Self Service Tools (US, Canada) Managed Leave Administration (FMLA) Integrated Recruiting Tool 12
13 13
14 Detailed assumptions related to pricing Ceridian Differentiators Implementation resources brought into sales process Vast experience with spin-off s allowed for guidance with transition services agreements, speed, project management Veyance sign-off s during implementation to ensure requirements are being met Integrated employee support for North American (US / CA) populations Provided Change Management program as standard for organizational readiness Partnership approach as key element to success 14
15 In Her Own Words Executive buy in from the start was key CEO, Global operations leadership team, HR leadership Formalized PMO structures work discipline in pulling resources at the right time; multi-functional approach Change affects everyone differently know their buttons (HR, associates, executives, managers, non-us) Our dark days galvanized the team We wasted 3 months of our lives Protect the budget money Challenge the way we have always done it What s next? Standardized Time and Attendance Advisor to other organizations within Veyance Continuing to enhance governace Process improvements 15
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