HR in the Fast Lane at Progressive Insurance

About Progressive     Fourth largest writer of private passenger auto insurance in the US Approximately 20,000 employees First auto insurer to sell insurance via the Internet Progressive leads the industry with innovative Internet offerings

Presentation Overview     Where We Are How We Got Here Where We’re Headed Questions and Answers

Where We Are

Current Environment      Centralized call centers, field claims offices Applications accessed via LAN, WAN, and dial-up connections Robust corporate intranet Centralized HR call support in the HR Service Center (HRSC) In production with PeopleSoft HRMS 7.51

HR Self Service at Progressive   HR self service intranet site includes:   Printable HR forms Links to HR content sites (compensation, travel services, policy manual)   Transactional applications Life event and manager checklists Most transactions must be done through self service

Manager Self Service Applications        Job Requisitions Manage Candidates/New Hire Employee Requests Terminate Employees Employee Bonuses Salary/Job Changes Group Increases        Performance Reviews Supervisor Changes Training Registration Skills Tracking Drill Down Delegation Manager Checklists

Manager Self Service Site

Terminate Employment

Terminate Employment

Termination Checklist

Employee Self Service Applications        Job Opportunity List Transfer Requests Work Experience Education and Background Internal Resume Employment Application Online Paycheck        Personal Data/ Emergency Contact Federal W4 Direct Deposit New Hire Orientation Benefits Enrollment Training Registration Life Event Changes

Job Opportunity Listing

Apply for Jobs

Internal Resume

Self Service Usage

Average Sessions Per Month 90,024 Busiest Day/Number of Sessions Average Sessions Per Day 2,972 Busiest Day of Week/% Volume 12/31/2001/9,358 Average Sessions Weekday/Weekend Tuesday/25% Pct Sessions Weekday/Weekend 3,944/1,011 Average Rows Keyed Per Month 79%/21% Average Rows Keyed Per Day 30,401 1,014

How We Got Here

HR Strategic Direction     Support growth Simplify HR processes Y2k compliance Intranet based self service  Reduce transaction costs   Reduce calls to HRSC Eliminate paper

Progressive HR Systems     Mainframe based self service   Benefits Enrollment & Training Registration Early 1990’s Time entry - 1996 Lotus Notes based salary changes - 1996 HRSC created in 1996 Converted from legacy HR/Payroll system to PeopleSoft HRMS in 1998

Business Case for Self Service  Identified the following benefits:  Reduction in mainframe support costs     Reduction in advertising expense, agency fees Reduction in mailing costs, overpayments Reduction in cycle time Savings in recruiter, HRSC, training administrator, manager, and employee time

Business Case for Self Service  Identified the following costs:  Hardware     Software Licensing Programming Ongoing support

Application Definition      Researched HR best practices Consulted internally with all areas of HR Identified 40 applications and analyzed importance and complexity Started small to minimize risk and cost Also reviewed business needs and ROI to determine deployment schedule

Team Structure       Started with small dedicated project team Functional project manager and I/T technical manager Two functional and three technical resources Increased size of team in 2000 Multiple areas participate in production Used consulting when appropriate

Tools Selection   Factors considered:  Company standards    Ongoing support Upgrades Cost Development tools include HTML, PeopleTools Web Client and Message Agent and Microsoft Active Server Pages

Development Challenges     Newness of technology made estimating work difficult Network performance/bandwidth Applications must work with various hardware and software Display resolution settings

Development Strategy    Iterative development process most effective Creation of prototypes and usability testing critical Considered the following for all changes:   Usability Performance  Cost/benefit of modifications

Usability Testing    Critical step in designing applications for casual users Users walk through scenarios and observers record/analyze their experiences Consistent test results   Site organization very important Users often ignore instructions  Simple labeling most effective

Deployment Strategy    Rollout organization in phases   Begin with pilots Minimize performance hit  Pull back if necessary Support multiple processes  Allow infrastructure to catch up  Minimize negative impact HR role in communication/training

Rollout Schedule        April, 1999 - Initial ESS and MSS April, 1999 - PeopleSoft upgrade April, 2000 - Internal Recruiting September, 2000 - External Recruiting, New Hire and Terminations November, 2000 - New Hire Benefits, Annual Enrollment and Training Registration September, 2001 - On Line Pay Advices December, 2001 - Group Salary Increases

Return on Investment     Total projected five year return at net present value is $5.6 million Initial applications projected to reduce transactions costs from $14.23 to $6.23

Changes in hire process are expected to yield savings of $75 per hire Processors in the HRSC reduced by 65% despite 60% growth in headcount

Keys to Success      Management support Minimizing development costs Flexibility, iterative development process and usability testing Building the necessary infrastructure Streamlining processes

Ongoing Challenges      Measurement of results User reactions are often subjective New technology is always more attractive Continued support of new processes Changes in functionality visible to entire organization

Where We’re Headed

Upgrade    Conducted comprehensive functional fit/gap analysis for self service applications in 2001 Decision was made to wait for next release Functional fit/gap results:   Much of ESS functionality is delivered Most of MSS functionality is not delivered  Recruiting functionality is increased but business processes are significantly different

Upgrade Strategy     Committed to use delivered self-service where possible I/T currently estimating hours to reapply customizations Effort will be significant Degree of fit determines upgrade approach   Where fit is high, apply customizations to base pages Where fit is low, maintain custom pages

Key Learnings     HRMS software changes impact self service regardless of tool Self service processes are still new and not clearly defined Manager functions are more specific to each company/industry Custom development of self service may require maintaining customizations

Upcoming Projects      PeopleSoft upgrade Intranet based time entry and management Web Reporting for Managers Personalized content integrated with transactions Deploy HR self service over the Internet

Questions and Answers