When your system’s past comes back to haunt you, here’s how to get over it.
By Christian Baader, Gianni Giacomelli, and David Ludlow
We all have heard about the phenomenon. Patchy, inconsistent deployments, siloed across organizations, resulting in painful, sometimes embarrassingly situations such as: poor visibility of even basic HR data across countries and lines of business; erratic and inconsistent management of HR processes; ineffective talent management; inability to properly run processes in a shared services environment, resulting in high costs and poor quality; and more recently, the inability to address economic, environmental, and social sustainability challenges such as generational shifts, diversity, employee health, and safety.
Do you remember where the problem started? In many cases, these now patchy solutions were implemented, sometimes quickly, around the time of the “Y2K” change when the need for a new system to handle four-digit years was mandatory. The implementations were often done quickly, without any reengineering of business processes and with heavy modifications to support the old processes. While those systems might have been technically upgraded, the processes still go back 10 years or more and don’t—or can’t—take advantage of technology that more modern systems offer. Another situation: Implementations that got core HR like payroll and benefits up and running, but then fell victim to other IT budget priorities. The consequence is limited ability to leverage the HRMS for more strategic HR initiatives like compensation management or succession management. Adding to this problem are environments that grew from global expansion, resulting in multiple systems from multiple vendors across multiple geographic regions.This is simply a loss of business potential.
Single Vendor Value
Leveraging the standardization of a single platform that embeds best practices can bring value to organizations in many ways. Consolidating multiple systems can lead to “one version of the truth.” No longer are complex data downloads and manipulation of spreadsheets required. A single system can produce the elusive “global headcount report” every CHRO, CFO, and even CEO is looking for. A consolidated platform can also provide the basis to reengineer outdated and inefficient processes, resulting in higher data quality and reduced cycle costs. Data quality is the “human capital” of the organization and accurate, consolidated, global data supports better business and workforce planning.
And once the data is consolidated and accurate, it can be used as a hub of master data to support strategic HR processes like talent management, as well as non-HR related processes like shift scheduling optimization, project costing, and compliance activities.
Many HR directors have to cope with at least some of this every day. And while many know what they could do about it, in the absence of hard ROI (or at least as hard as the data from invoice or sales force automation tools, for example), they are forced to take a backseat in the CIO’s pecking order.
There are solutions, but they require HR strategy and technology—together. And even more importantly, they will require the HR director, the CIO, the HR service provider (be it a BPO or on-Demand), and the related software vendor to work together. Each of them has a part in “dividing and conquering” such a seemingly intractable conundrum.
But there are two prerequisites. First, a portfolio approach of on-premise solutions (e.g., for the core HR system of records), on-demand software services (e.g., for specific tasks in recruiting or performance management), and outsourced business process services like payroll and benefits administration is needed. That can be boosted by appropriate technology usage—as long as you plan with technology in mind. Each solution part must cover its purpose, and together they also must combine into a meaningful whole, delivering comprehensive end-to-end business process and data. For example, data structures and operational processes must be consistent, otherwise the end-to-end integrity of process and data is jeopardized—or becomes exceedingly costly to maintain.
And secondly, there is simply no way to have “all things for all people.” Just like cars are made out of standard components, the HR service puzzle is made out of many pieces, a large part of which should be standardized to some extent. This means ensuring a proper two-way matching between what is possible and what is really needed. How to find the proper trusted advisor for this task? Start with someone who will not say ‘just tell me how you want it to be done.’ Because that is how the mess got started in the first place so don’t make the same mistake twice. Errare humanum est, sed perseverare diabolicum— making mistakes is human, persisting on them is devil’s work.
Christian Baader, firstname.lastname@example.org, is vice president BPO for SAP Americas.
Gianni Giacomelli, email@example.com, is head of strategy and marketing, BPO for SAP AG.
David Ludlow, firstname.lastname@example.org, is vice president, HCM solution management for SAP Americas.