The 5 Building Blocks of HR Transformation

The 5 Building Blocks of HR Transformation

in , Dec 11, 2017

HR transformation programs help organizations meet their specific workforce needs and further develop their overall HR function. A transformation program brings together the diversified trends that impact HR on a daily basis. To remain competitive, HR organizations use transformation programs to assess current practices and to build a new way of working.

As HR organizations transform themselves, operational HR tasks are being automated, tactical HR processes are more and more done by managers and HR is supporting more complex issues. Transformation provides HR with the opportunity become an all-around strategic partner at the C-level. I have had the good fortune of participating in multiple HR transformation projects. In my experience, many projects are system-driven and the impact of the project on the business is not always addressed. So, in this article I wanted to go beyond the system-driven angle and share my thoughts on five basic components that can drive a successful HR transformation.

1.    Market Strategy

Disruptive markets, high demand of specific skills, and a highly competitive marketplace are just some examples of how our clients are facing significant workforce issues on a daily basis. HR transformation begins by defining these developments, the impact that they have on the organization and the consequences they could have in the (near) future.

2.    HR Strategy

The market strategy will help define the HR strategy. More and more companies want to transform their HR function from operational to strategic. The HR strategy connects to the market developments and creates an impact assessment for the short term (~ 1 year) as well as the long term (>=1-5 years), preferably based upon scenario planning. Scenario Planning is driven by accounting/ finance and provides insight into the growth potential of the organization. The HR strategy takes these numbers as starting points and connects them to workforce-related matters, including talent pooling, for example.

In addition, the HR strategy typically contains other regular elements that we would expect regarding the hire-to-retire lifecycle. The HR strategy forms a strong foundation for all HR programs, projects and tasks included in the transformation.

3.    Business Case

A well-written business case makes the strategies more tangible. Regular elements of a business case include:

  • (High-level) Assessment of as-is
  • Overview of to-be
  • How do we get there?
  • Qualitative and quantitative benefits
  • Financial paragraph around cost related to the project to support the HR Transformation.

The business case does not necessarily include systems since it’s an HR-driven business case.

Business Case with Roadmap

In an HR transformation, it’s important to not try to do it all at once. In many cases, the starting point might be a complex, decentralized and un-harmonized process model that lacks visibility into how these HR business processes are currently executed. Based upon the HR Strategy and the Business Case, the HR Roadmap can be defined to help solve the matters on the burning platform first.

HRIT Business Case with HR IT Roadmap

In a fragmented system landscape, it’s important to understand the current architecture. Clients I have worked with have the ambition to simplify their HR IT landscapes and support the HR transformation processes from a system perspective. It’s important to set the right priorities. This requires a separate HRIT business case with a HR IT Roadmap to define the right priorities.

4.    Business Consulting

Business consulting is the driver in any HR transformation program. Strong consulting profiles will have experience in HR and will have been part of global HR transformation programs.

Strategic Consulting

Strategic business consulting supports the development of the right strategies and the translation of these strategies into the different projects that support the HR transformation.

HR Business Process Design

Every HR transformation program requires an assessment of the organization’s current as-is processes (where current processes exist). Of course, to-be processes will be designed to create a better alignment in the reporting structure.

In my projects, clients have made an explicit distinction between white collar HR business processes and blue collar HR business processes. This is because blue collar workers usually have anotherbenefit structure and other needs. This will often require deviations in HR business processes to accurately represent both blue and white collar processes.

Change Management

From the beginning of an HR transformation program, a specific change management function must be included. After all, an HR transformation program is essentially a large change management program. Large global rollouts will require several change managers.

In addition to stakeholder management with a focus upon different personas/ target groups, heat-mapping is also crucial for a successful transformation rollout. In practice, we see two approaches for heat-mapping:

  • During the development of the new HR Business Processes (design phase)
  • During the rollout of these new HR Business Processes (implementation phase)

Regardless of the approach, this needs to be done for user adoption.

Training

Providing the training to users/participants in the new HR business processes is critical to the success of the HR transformation program. Training processes strongly interact with change management efforts. Depending upon the complexity of the particular transformation program, it could be in its own workstream.

Communication

To support the HR transformation program in status reporting and to prepare presentations and training materials, it’s very likely that a communication office will be added to the program. This workstream is responsible for marketing and supporting leadership.

5.    The system

The latest technologies support new ways of working, such as using mobile technology, for example. SAP SuccessFactors solutions offer many ways of improving business processes by integrating technology.

System design

The functional stream in an SAP SuccessFactors Employee Central implementation has a focus on system processes. Based upon my experience, end-to-end HR business process design is usually not in scope. A consequence of this is that the system is technically implemented  but not embedded in the organization. The latter would require a far bigger effort and, of course, improves user adoption. Within iXerv we go beyond the technical system implementation. We involve stakeholders upfront and ensure user adoption during the implementation.

System Configuration

The system configuration stream is where you define the SAP SuccessFactors configuration required to support your HR transformation requirements.

Summary of HR Transformation

HR Transformation is much more than a SuccessFactors implementation. It’s about defining the HR strategy, defining the business case for HR, with HRIT being part of that. It’s about setting the right priorities and including the right disciplines, like change management, training, business process design. And finally, it’s about system support to enable HR to be a more strategic player in the marketplace.

The implementation cost is often approximately 15-25% of the cost of the HR Transformation program.

The picture below provides a graphical summary.

The business case for an HR transformation program with financial estimation may contain:

  • Involvement of HR professionals in the program
  • Involvement of leadership in the program
  • Change Management in the program
  • Project Management and Project Office
  • Backfilling costs
  • HR costs for IT build
  • Implementation cost
  • Training cost
  • Integration and other IT costs

Getting Started

iXerv can help you understand the steps you should follow as well as assist you to ensure the program meets your company’s needs. As always, we welcome your feedback and stories of your own HR transformation experiences!

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