INTEGRATING HR WITH BUSINESS STRATEGY

THROUGH ERP

STRUCTURE OF THE PRESENTATION

Aim & Focus of HR in BusinessThe Business case for e-HRe-HR through ERPERP: A Journey in Change ManagementERP: Definition and Historical PerspectiveImplications of an ERP ImplementationOrganizational Readiness for ERPChoosing the ERP PackageDeliverables of an ERP Package: focus on SAP-HRERP Implementation: Who are involved?Timelines and Review mechanisms for implementationWhat determines a successful implementation?HR Role: Past, Present and Future post-ERP

I : Administrative

Free up the line to focus on the business

II : Human Resource Management

•Business Orientation•Services provided expressed as outputs or inputs

III: Business Partner

•Line management owns business as a part of their role•HR is an integral member of management teams

IV: Strategic Partner

•HR is a major influence on business strategy•HR systems drive business strategy

HR MODELS & THEIR AIMS IN BUSINESS

I : Administrative

•Establish policies & rules•Functional orientation•Personnel Administration•Government regulations•Labour relations

II : Human Resource Management

•Build performance management capabilities•Developing managers- linking competencies to job requirements and career development•Enhancing organization change capabilities•Building an HR network organization wide

HR MODELS & THEIR FOCUS

III: Business Partner

•HR focused on the development of people & organizations•Leadership development•Leveraging competencies, building organization work redesign capabilities

IV: Strategic Partner

•Self-service for transactional work•Transactional work outsourced•Knowledge Management•Focus on organization development•Change Management

HR MODELS & THEIR FOCUS

The Business Case for e-HR

Increase efficiencyCut costCut HR staff

Enhance level of serviceBetter quality of serviceOpenness & Transparency

Enables Managing People as a core competence

Guides Business Strategy

Our VisionSAP-HR will provide automated, efficient

andtransparent HR processes and accurateinformation for :

Taking strategic business decisionsResponding effectively to

emerging HR challengesEnabling informed decisions by managersEmpowering employees Enabling HR to focus on value added roles.

The ePOCH team will make our SAP-HR implementation a global benchmark

SAP-HR for Strategic Business Decisions

Companywide Skill Matrix to enable search on Skill sets for faster response to business opportunities

Highlighting issues which reduce attractiveness of L&T for existing & potential employees

Monitoring performance

Linking compensation to performance

Succession planning

Training people for current & future roles

HR Challenges & SAP SupportHR Challenges SAP Support

Retention of Talent Supports MLP Process, Separation Analysis

Attraction of Talent Data For Campus Ambassadors

Competency Building Enables Targeted Training, Job Rotation, Skill Matrix

Retirements / Turnover Suggests shortlist of Successors for Critical Positions

Performance Culture Workflow for PAJORR / SMART, Links to Thrust Areas, Value Drivers

Emerging Competencies for HR’s Transformational Role

Strong facilitation skills

Knowledge of applied behavioural science & psychology

Coaching skills

Running Assessment Centres

Team Building skills

Optimising & developing HR systems & processes

Strategic skills to make feasibility reports, etc.

APPROACHES TO e-HR

Build Own (Develop In-house)OutsourceAssemble/ ASP Modules ERP Products

Enabling informed decisions by managersEmpowering employees

Enhance level of serviceBetter quality of serviceOpenness & Transparency

Employee Self Service (ESS) PlatformManager’s Desk Top

e-HREnabling HR to Transform from

the Administrative Role to a Strategic Partner

THROUGH ERP

ENTERPRISE RESOURCE PLANNING

A JOURNEY IN CHANGE MANAGEMENT

What is Enterprise Resource Planning?

Enterprise Resource Planning (ERP) is an integrated business solution that aims at streamlining business processes across functional areas of the organization.

ERP enables the manufacturer to to manage all aspects of business including production planning, inventory management, Customer Relationship Management, Finance, Costing and Human Resource.

THE DEVELOPMENT OF ERP: A HISTORICAL PERSPECTIVE

1960s: Manufacturing systems with focus on Inventory control

1970s: Material Resource Planning with focus on components, raw material planning and procurement

1980s: MRP II Extension of MRP to shop-floor and Distribution Management Activities

1990s: MRP extended to cover engineering, finance, human resource and project management

What does an ERP Implementation Imply?

An ERP implementation implies

CHANGE

CHANGE IMPLIESAnalyzing how business is run in terms of processes, practices and procedures.

Institutionalizing a number of changes the organization has been contemplating on.

Adopting new business processes resulting in job roles and responsibilities to change , disappear or be created.

Training employees in change management in addition to new software and IT capability.

Aligning all performance measurements and reporting structures with the ERP process changes.

IS YOUR ORGANIZATION READY FOR AN ERP IMPLEMENTATION

?IS THE ORGANIZATION

READY TO CHANGE

ORGANIZATIONAL READINESS FOR ERP IMPLEMENTATION

Factors that affect readiness

Organization Culture

Decision-making Strategies

Risk taking Orientation

Leadership Strategies

ORGANIZATIONAL READINESS FOR ERP IMPLEMENTATION

Identify and prioritize issues of most concern to employees

Locate specific areas of resistance, by employee group / function/ location

Develop action programs to mitigate risks to the implementation success

Make action programs specific to employee groups vs. “one program fits all” approach

Evaluate effectiveness of action plans

HOW DO YOU CHOOSE THE PACKAGE?

The decision to select an ERP package is one a firm will live with over much of the decade

Taking a corporate-wide decision may not only be a challenge but also take considerable time

FACTORS THAT INFLUENCE THE CHOICE OF THE PACKAGE

Do the functions and features meet the needs of the organization

•Industry specific functionality •Vast majority of the requirements met•Complexity of business operations•Implementation scope and impact on the business areas

Compatibility of the package with your business•Company Culture•Data Management•Level of business unit autonomy

FACTORS THAT INFLUENCE THE CHOICE OF THE PACKAGE

Integrated package from a single vendor or best-of- breed solutions from several vendors

•How difficult is it to integrate packages•Can a single vendor meet all the business needs or multiple vendors will provide the edge•Vendor’s global experience, commitment

Implications of the package on your IT infrastructure

• Is the choice consistent with the IT strategy of the organization •How will the choice impact the server, database, networking loads

FACTORS THAT INFLUENCE THE CHOICE OF THE PACKAGEEase of Implementation

•Ability of the solution to configure to requirements providing quick initial implementation

•Ability of the system to reconfigure the system as the business reality changes

Cost of the Package•Since the investment is infrastructural in nature, long term viability is an important key.

CHOOSING THE PACKAGE: THE PROCESS Vision to implement a change in the business to operate in the competitive world

Secure the commitment & involvement of the top management starting from the selection to the implementation of the ERP solution

Identify areas of business that are in critical need of ERP

Identify factors that hinder change such as complacency, fear of the unknown

Select a committee that is equipped with the requirements of the corporation, cultural environment, past performance and future plans of the company.

CHOOSING THE PACKAGE: THE PROCESS The committee should invite 6-10 top vendors to participate in the software selection process and shortlist 2-3 vendors

Vendors should present the key process flows in the solution, understand the organization requirements show configurability and re-configurability and recommend the implementation strategies.

The committee should then evaluate the product, vendor, fitment to the organization needs and lowest risk for the organization.

DELIVERABLES OF AN ERP PACKAGE

What is in it for business?

What is in it for employees?

What is in it for HR?

What is in it for Business?Present Scenario Post SAP Scenario

Improving administrative efficiency (cost & time) Limit HR intervention

Considerable time & effort on collation

Automated workflows, reports, queries

Accurate timely info on HR for Managers

Cycle time high. Needs to constantly contact HR

Empowers Managers to take informed decisions

Rugged, flexible & legally compliant Payroll

External intervention & manual updation required

Compliance built into the system

Integrating HR output with FI/CO, PS, etc.

Not much linkage today

Data link enabled

Linking performance appraisal to Value Drivers

No link, except in EBG

On-line & updated system (Future Process Enhancement)

What is in it for the Employee?

Present Scenario Post SAP ScenarioDependency on HR Delays, a lot of

paper workAutomated work-flows including status of transactions

Data ownership & control over personal information

Dependency on HR Ownership of data

Work-flow LeavePerformance Appr Training

Manual Automated transparent work-flows

What is in it for the Employee?Present Scenario Post SAP Scenario

Access to informationPF nominationView PayslipsTraining CalendarVacancy infoTime punches

Dependency on HRNo present system

On-line updated informationFelt need addressed

Who’s who

What is in it for HR?No duplicate data entryReliable integrated data baseEasier data entryFaster response timeMonitoring of datesStandard SAP Reports & ad hoc queriesAutomation of routine transaction (less

paper work, faster)Test Data captured for evaluation of

reliability & validitySearch on Skill Sets

ERP IMPLEMENTATION: WHO ALL ARE INVOLVED?

The ERP Team constitutes of:

The Core Implementation team representing the Client

The Implementation Partner

Project Leaders representing the Client and the Implementation Partner

The Project Sponsor and the Steering Committee provide direction to the above team throughout the

implementation

TIMELINES & REVIEW MECHANISMSUSE FORMAL PROJECT MANAGEMENT METHODS

Conduct regular project management reviews

Report formally and regularly to the business (Steering committee)

Make sure that the project sponsor is in tune with the progress and issues

Put formal project control structures and documentation in place

Document everything – audit trails

Close the project formally, measure the progress, show the value add and prove the results

Strong Sponsorship from Top Management

Project Vision

Project Leadership & Team

Process Focus

Realistic expectations from all – An understanding that ERP is a not panacea for all problems.

Realistic deadlines depending on the scope of the project

Cohesive plan for preparing the organization for change

Education & Training / End User Preparation

DETERMINANTS FOR A SUCCESSFUL IMPLEMENTATION

HR : Past, Present & Future post ERP

Advice

Service

Strategy Strategy

IT Self Service

Strategy

Service

Advice

IT Self-Service

Outsource Shared ServicesOLD

NEW

FUTURE