Transcript Fujitsu Presentation - EMRG, Emerging Markets Research Group

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© Fujitsu Services
Transforming the HR Function – December 2007
GLOBAL SOURCING MASTERCLASS
6TH DECEMBER 2007
HRO
TRANSFORMING THE HR FUNCTION
A Fujitsu Services Perspective
Dierdre Hardy
Shaun Dunphy
© Fujitsu Services 2007
Agenda
• Introduction
• What type of HR function are you?
• The outsourcing attitude gap
• What makes a good HRO partnership
• What processes?
• Understanding the benefits
• Defining and improving SLA’s
• The retained organisation
• Change challenge
• Lessons learned
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© Fujitsu Services
Transforming the HR Function – December 2007
富士通グループ
グローバル・プレゼンス
• 世界70ヶ国以上でのセールスおよびサポート提供
• 従業員数161,000人
ｱﾒﾘｶ
10,000
EMEA*
(ﾖｰﾛｯﾊﾟ・
中東・ｱﾌﾘ
ｶ)
25,000
概要
• ｸﾞﾛｰﾊﾞﾙﾏｰｹｯﾄにおけるITｼｽﾃﾑ・
ｻｰﾋﾞｽ分野のﾘｰﾀﾞｰ、$432億
(€325億)規模
• ｺｱﾋﾞｼﾞﾈｽ:
日本
99,000
ｱｼﾞｱ・
ﾊﾟｼﾌｨｯｸ
28,000
* EMEA従業員数は富士通シーメンス・コンピューターズを除く
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© Fujitsu Services
Transforming the HR Function – December 2007
• ﾃｸﾉﾛｼﾞｰｿﾘｭｰｼｮﾝ
(ｼｽﾃﾑﾌﾟﾗｯﾄﾌｫｰﾑおよび
ｻｰﾋﾞｽ)
• ﾕﾋﾞｷﾀｽﾌﾟﾛﾀﾞｸﾄｿﾘｭｰｼｮﾝ
(ﾊﾟｿｺﾝ、ﾊｰﾄﾞﾃﾞｨｽｸ等)
• 電子ﾃﾞﾊﾞｲｽｿﾘｭｰｼｮﾝ
• ITｻｰﾋﾞｽﾏｰｹｯﾄにおいて、日本で
は第1位、世界では第3位のシェ
アを有する
Fujitsu Group
GLOBAL PRESENCE
• Sales and support operations in over 70 countries
• 165,000 employees worldwide
In summary
• A $43.2bn (€32.5bn) leader in
IT systems and services for the
global marketplace
• Core businesses of:
Americas
10,000
Europe
25,000
Japan
99,000
AsiaPacific
28,000
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© Fujitsu Services
Transforming the HR Function – December 2007
• Technology Solutions
(System Platforms &
Services)
• Ubiquitous Product Solutions
(PCs, HDDs, etc.)
• Device Solutions
• Fujitsu has the highest share of
the IT services market in Japan,
the 3rd highest worldwide
Why do organisations consider HRO?
HRO
HRO providers resolve disparate approaches to delivering internal services,
controls costs, improves quality and consistency of services and uses
technology to streamline the process.
It enables clients to concentrate their limited HR team on creating
sustainable competitive advantage by getting the right people with the right
competencies in the right place at the right time.
Low impact, high volume non-core administration and employee support are
moved to the BPO provider who concentrates on service delivery via
economies of scale and automation.
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Transforming the HR Function – December 2007
Key drivers stated by clients
DRIVERS
2006 Survey (Aberdeen Group)
•Better cost accountability and cost control (64%)
•Free up valuable HR time and resources (59%)
•Improve HR services to end users (33%)
Other drivers mentioned by clients
•Overcome poor management information about people
•Inconsistencies in internal HR practices
•Industrialise or commoditize HR
•Not core business
•Facilitate integration after merger or acquisition
•Looking for a global solution
•Economies of scale / cost effective solutions
•It has worked in the USA so wish to replicate
•Remove bureaucracy / increase line management role
•Integrated ERP business system
•Better use of technology – intranet, telephony, email for self-service
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Transforming the HR Function – December 2007
What is HRO?
Self Service
Assisted Service
Tier 0
Tier 1
Tier 2
• Employees
Employee
• Management
• HR Professionals
• Applicants
• Pensioners
100%>>
Advisors, Agents,
Clerical,
Administrators
66%
28%
Systems:
Internet, Intranet,
e-mail forms,
workflow s/w
Systems:
Helpdesk,
Issue Ticketing
Self
Service
Outsourced as Core
HR services
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includes:
• Policy Experts
• Process Content
Owners
• HR “Partners”
Tier 3
Case Workers
5%
1%
Systems:
CRM
Shared
Services
Outsourced as on Demand
HR services
Transforming the HR Function – December 2007
Professional
Service
Centres of
Expertise
Retained within
client HR Function
What sort of HR function?
THE TRANSFORMATION ROADMAP & BENEFITS
High Performance
Effectiveness: Transformation
Evolved HR
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•
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•
•
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Reduce HR ops costs per FTE (Admin costs total of 30-40%)
Increase ability of HR to focus on strategic tasks
Increase customer satisfaction levels
Reduce cost per hire / Reduce time to proficiency
Lower influenced costs
HR building capability:
Developing talent, Linking performance mgt to business results,
Engaging employees, Change leadership
•
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•
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•
•
•
•
•
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Grow revenue per FTE, revenue per comp/benefit cost
Improve employee satisfaction
Reduce voluntary turnover
Increase retention of key talent
Improve workforce performance
HR leading change:
Proactive nature, Strategic business partner, Drive culture
change, Help create the new business model
Driver: Productive & engaged workforce
Driver: High performing workforce
Traditional HR
Streamlined HR
Often unmeasured, or measuring irrelevant statistics
HR focusing on people issues
Fire fighting
HR generalists delivering local services
• Reduce HR operating costs per FTE (Administrative
costs reduced 20-40%)
• Decrease manager time per HR transaction
• Decrease cycle time per HR transaction and person-toperson inquiries,
• HR have the fundamentals right:
Administrative excellence, Employee champion, Increasing
service at reduced cost
Driver: Basic services to workforce
Driver: Efficiently managed workforce
Efficiency: “Best Practices”
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Transforming the HR Function – December 2007
The outsourcing attitude gap
There is always a risk of outsourcing going wrong because
the client and the vendor are driven by different needs
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The Client
The Vendor
Fix my processes
The client’s name / reputation
Improve management information
Regular income
Flexible approach
Simple repeatable processes
© Fujitsu Services
Transforming the HR Function – December 2007
What makes a good HRO partnership
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•
•
•
•
•
•
•
•
•
Clarity of vision
Senior stakeholder champion
Evidence of rapid decision-making in the past
IT literacy of employees
Clearly defined HR policies – the “rules”
Clear ownership of HRO programme
Agreed benefits / outcomes / measures
Prepared to work as a partnership
Prepared to develop services over time
Understands potential impact on employees and line managers as
well as the retained HR organisation
• Prepared to commit for at least 5 years
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Transforming the HR Function – December 2007
What processes can we outsource?
CHARACTERISTICS
Transactional
Independent of
location
Time consuming
Not your core
business
Rule-based
Relatively high
volume
Process rather
than project
Can be visualised as a
service commodity
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Transforming the HR Function – December 2007
Rocket Science?
It looks relatively straight-forward – just
redesign for efficiency and effectiveness
Route Map
“As is”
“To Be”
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Transforming the HR Function – December 2007
But do we know how it really works?
Route Map
“As is”
“To Be”
Often poorly captured – relies on
tacit knowledge of the people
who run the process
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Transforming the HR Function – December 2007
Often defined in terms of desired
business outcomes (e.g. cost
savings) rather than a shared
vision of how it will work
Example of an HR Process Taxonomy
EMPLOYEE ENTRY
Hiring
Hiring a new
employee
EMPLOYEE EVENTS
Pay changes
Transfers
Employee Relations
Pay increase on transfer
Off-cycle market
adjustment
Hiring a temporary
employee
Merit pay
Permanent
transfer between
countries
Paid leave of absence
Unpaid leave of absence
Taking paid
maternity leave
Taking unpaid
maternity /paternity
leave
Grievance
Taking paid
military leave
Equal
opportunities
Demotion with
grade change
Cost centre
(department )
change
Taking unpaid
military leave
Voluntary
redundancy
Inefficiency
Re -organisation
Taking paid long
term disability
Taking unpaid
educational leave
Involuntary exit
Returning from
paid leave of
absence
Performance
Performance
appraisal
Location change
within country
Personal
development
Benefits enrolment
Job change with
no pay change
Learning &
Development
Taking unpaid
compassionate
leave
End of temporary
employment
Taking unpaid
long term disability
leave
Dismissal /
Unsatisfactory
performance
Returning from
unpaid leave of
absence
Compulsary
redundancy
Outsourcing /
transfer of
undertakings
Failure to start work
Failed preemployment
Resignation
Mutual agreement
Transfer to affiliate
company within
country
Promotion with
grade change
Cost of living
adjustment
processes
Voluntary exit
Leave of absence
Disciplinary
Rehiring an ex employee
Hiring an
employees via
company
acquisition
EMPLOYEE EXIT
Temporary assignments
Temporary foreign
assignment
Personal information
Personal details
update
Benefits change
Death in service
Data changes
No show
Return from
temporary foreign
assignment
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Sickness
reporting
Vacation /
holiday tracking
Changing from
temporary to
permanent
employment
Transforming the HR Function – December 2007
Promotion without
a pay change
Changing between
full-time and part time hours
Benefits exit
Rethink HR processes as business processes
M8) Offer a foreign employee a temporary assignment with my team
Employee
Express interest in
an assignment
Accept temporary
assignment
Receive first pay
Line manager
Identify a sutiable
candidate
Complete Transfer
Request Form
Plan for new
starter arrival
Authorisers
Releasing Mgr
Authorise
temporary
assignment
HR PoC Arrange
temporary
assignment
Successful processes are designed around
desired outcomes
Resourcing (SSC)
HR Services (SSC)
Send out
temporary
assignment pack
Receive offer
acceptance
Notify manager of
acceptance
Update employee
file
Update HRMS
Always define
If necessary, add
to payroll
Payroll Admin (SSC)
Add new
employee to pay
run
• Entry and exit conditions
Internal service providers
• Intermediate inputs/outputs
• Controls and methods
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Receive transfers
report
Monthly pay run
Cost control is a common theme
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Cost savings are not as large as expected base on whole life costs
Only 30% of companies moving to BPO achieve their cost savings targets
SLAs can drag the service down to the lowest acceptable quality
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Service providers are not good at managing customer expectations
Every last minute change increases the risk of failure, even if the service
provider agrees to it
Service providers may promise services that are beyond their current
capability
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You will discover stuff done by HR that isn’t documented and therefore is not
in scope
What damages the cost savings?
• Major ERP solutions can be restrictive leading to a desire to customize (£££)
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Poor data moved form old systems is replicated in new HR system
Timescales to “go-live” are often underestimated by both parties
Resistance to change is badly managed
© Fujitsu Services
Transforming the HR Function – December 2007
But some clients report benefits
• Reduction in HR operating costs of between 20% - 40%
• Access to improved management information, and performance metrics
• Improvements in HR service quality and introduction of e-HR service
models
• Increase productivity within the HR department, e.g. reduction in number
of HR staff per employee
• Enable internal HR staff to become “business partners” and move away
from spending the majority of their time on low impact administrative,
transactional tasks
• More predictable cost base for service delivery
• Improved and consistent HR vendor management
• Consolidation of HRO function into regional (and potentially global)
shared service centres
• Increase in organisations’ employee satisfaction with employee services
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Benefits identified and measured across the end to
end service
Implement
Self-service
Improved cut
off
submission
timescale
Implement
SLAs
Consistency
of request
handling
created
Implement
standard
service
processes
Implement
service
regime
Programme
Enablers
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Speed of
HR Service
increased
‘No show’
rates at
training
courses
decreased
Telephony
within Shared
Service
Centre (SSC)
installed
© Fujitsu Services
Quality of
HR Service
increased
Percentage
of approved
vacancies
decreased
Real
Customer
Focus
KPI
Consistency
of applying
HR policy
increased
Case
management
installed in
SSC
‘Capability’
Outcomes
Transformed
Business
Processes
Consistently
Top
Performer
KPI
Implement
Electronic
Handbook
Talented and
Effective
Workforce
Time taken
to fill
vacancies
decreased
Single Pt. of
contact for
transactions
created
Implement
retained
organisation
structure
Ratio of HR
staff to total
staff
decreased
Absence
levels
reduced
‘Operational’
Outcomes
Staff
absence
decreased
‘Strategic’ Outcomes
HR Service & People Management Outcomes
Transforming the HR Function – December 2007
Programmeled Delivery
Strategic
outcomes
Service Level Agreements
• Measuring for measurement sake?
• Decide those that are important to you – understand
what will make an impact
• What level of service do you need?
• What timescales do you apply to achievement?
• Long lists of SLAs and KPIs make for a lot of monitoring
and reporting work – is it adding value?
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Transforming the HR Function – December 2007
The retained organisation – getting it right
What exactly is a
strategic HR
business partner?
Maybe I should
just check their
work when it
comes back?
A large part of my work
has disappeared – what
do I do now?
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Transforming the HR Function – December 2007
As an HR professional how
do I use the new service?
The change challenge
Quality of the Technology
Effectiveness of the solution =
……..multiplied by……..
Acceptance of Change
• Quality applied to understanding the client’s needs, process mapping,
re-design, implementation, deployment, steady-state service
management and future evolution of services
• Acceptance related to people involvement, communication, listening,
gaining commitment, overcoming resistance to change
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Transforming the HR Function – December 2007
What have we learnt?
Service
People
Location
Cost is an important driver but it cannot only be about cost savings. If HRO is to be
successful, service and quality must be up there as one of your top priorities.
While high quality recruitment, training, rewards and targets are very important, these have
become hygiene elements – essential to good performance but not a guarantee to
outstanding performance. The differentiator is the presence of the appropriate skills –
leadership, people skills, customer focus and an ability to build strong relationships with the
business.
Location is a major decision – not least because of its labour arbitrage potential but also
the right location will provide the right people, language skills, cultural awareness. It also
provides the setting for delivering change which HRO is all about.
Technology
It is not enough to focus on standardised ERP systems. Enabling technologies such as
scanning, workflow, self service and mobile devices are raising the performance bar to
deliver a radical change in service levels. HRO provide the ideal platform to implement
such technologies.
Benefits
Identify the outcomes you are seeking across the end to end service and monitor benefit
delivery by both provider and your own organisation. Very often, suppliers can enable
benefits – only owning organisations can realise them!
Invest
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HRO is an investment. Doing it well requires a mix of different skills both during the project
and deployment phase. Getting it right upfront reduces your costs long term.
© Fujitsu Services
Transforming the HR Function – December 2007
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Transforming the HR Function – December 2007