System Consolidation in the Cloud Enables Rapid Growth

Transcription

1 Case Study: Pioneer Metal Finishing System Consolidation in the Cloud Enables Rapid Growth Fast-Growing Metal Finishing Company Puts HR System in the Cloud By Holger Mueller Vice President and Principal Analyst Content Editor: R Ray Wang Copy Editor: Maria Shao June 30, 2014

2 Pioneer Metal Finishing is a management-owned metal finishing services company, headquartered in Green Bay, Wisconsin, that is rapidly growing both organically and through acquisitions. The company had a less flexible and less accessible mainframe-based HR product in use and decided to replace it with Kronos, bringing together HR core, benefits, time and attendance as well as payroll in one single cloud-based system. Pioneer Metal Finishing gained better information visibility and higher information quality through selfservice and more agility. Moreover, the company can quickly ramp up new employees joining from acquisitions. Pioneer Metal Finishing is headquartered in Green Bay, Wisconsin. The company finishes metal products with trusted finishes, including anodizing and electroless nickel, paint and powder coating, and chromate, tin, zinc and precious metal platings. The company has more than a dozen locations across the United States and Mexico. Most of them operate five days a week 24 hours a day, with the weekends reserved for maintenance. The company has rapidly grown, acquiring two to three companies per year. The implementation project was led by Director of HR Brad Nycz, who made sure decisions were made in a timely fashion and involved not only the HR function but the whole company. Nycz s background in project management certainly proved to be an asset for the task. Company: Pioneer Metal Finishing Location: Green Bay, Wisconsin 2012 Revenue: Private No. Employees: 1,400 Industry: Metal coats and finishes Other: Founded in 1945, owned by management team Pioneer was on a rapid expansion path and needed an HR product that could scale for the growing employee population. The company operates on a 24 x 5 shift system, with complex payroll and time rules that are typical for the manufacturing industry. In 2012, Pioneer executives realized that their current HR solution, a mainframe-based product operated by a service bureau provider, was not the right fit for the enterprise s needs. As often in these cases, awareness of the challenge first arose from a lack of reporting capability in the solution Constellation Research, Inc. All rights reserved 2

3 Pioneer grew concerned about getting information out of its previous HR system. If executives and managers needed enhanced or modified reports, Pioneer always had to go back to the vendor, often negotiate the cost of the change and then wait for weeks for the vendor to make the changes. For a rapidly expanding enterprise, this clearly was not a satisfying solution as the company had to make quick decisions around acquisition opportunities that often featured labor costs considerations. By the end of 2012, Pioneer executives started to look for a replacement HR system. In a very fast-paced selection process, the company narrowed the shortlist to three vendors in the first quarter of 2013 and ultimately decided on Kronos. The main reasons for the decision to make Kronos the Pioneer HR system of the future was the vendor s extensive experience in Time and Labor Management. Pioneer was already running Kronos clocks, so there were synergies on the time capture side. But the company was also interested in putting run time and attendance processes together with a Core HR and Payroll system, which Kronos offered. With the price also being right, Pioneer embarked on a very fast implementation process that saw the company go live on Kronos Workforce Ready in only three months. Workforce Ready also appealed to Pioneer since the product runs as a Software-as-a- Service (SaaS) product. Pioneer only has a very small IT team that was happy to reduce its workload and not have to deal with more complex networking and security issues that had Labor management is a critical part of the Pioneer business and Kronos makes that process easy. Brad Nycz, Director of HR Pioneer Metal Finishing to be taken care of when working with the previous vendor. Today, Pioneer uses Kronos Workforce Ready for core HR, Payroll, Employee and Manager Self-Service as well as Time and Labor Management. Time capture and management play crucial roles for Pioneer as close to 90 percent of the company s employees are hourly workers. What sets Pioneer s project apart is the very rapid implementation process, which took just under three months. Given the large scope of the system, this was truly remarkable. Moreover, the implementation team used no IT resources during the implementation, just a few Kronos professional services professionals. The implementation project was championed by the HR director. Ironically, the largest obstacle and most time-consuming element of the implementation process was the transfer of data from the previous vendor to Kronos. The other challenge was that at the time of the implementation, Kronos did not provide a test system. So HR professionals took extra caution when creating data to familiarize themselves with the new HR system Constellation Research, Inc. All rights reserved 3

4 Finally, reporting is now an easy task, with all relevant HR data in a single system and the Kronos reporting capabilities allowing the Pioneer professionals to create, modify and enhance these by themselves. Originally, Pioneer was going to conduct a formal ROI review of the system selection and implementation. During the RFP phase, though, it became clear that Kronos would allow Pioneer to run its system at half the operating cost of the previous vendor, while roughly doubling the business functionality at Pioneer s disposal. When the executives realized during the implementation that this was truly the case, they abandoned any formal ROI projects as it was a no brainer decision for the enterprise. Today, Pioneer has a scalable HR solution that allows it to keep pace with the fast corporate expansion. Whenever the company acquires another operation, the HR department simply hires the new Pioneer employees through the HR module s recruiting functionality, which Pioneer recently added to its functional footprint. That both system and processes scale was evident when Pioneer made its largest acquisition to date, adding 300 new employees. All of them were live in the Kronos system on Day 1 of joining the company. Pioneer also turned on the smartphone access for the HR system, as most of its employees are always on the go and don t sit down at a workplace computer. Even without training, employees immediately started to expand their use of the system. For instance, the company had not planned for a high adoption of direct deposit, but direct deposit of paychecks jumped 20 percent in the first week of availability in the Kronos system. Employees just saw the functionality and entered the information. This served as a powerful showcase for a modern HR system that enables positive side effects. Moreover, Pioneer operates on a single integrated HR system, which provides one version of the truth. The days of contradictory information across different systems is a challenge of the past. Additionally, the company can now handle its reporting requirements easily, as it has access to its own data and the Kronos reporting tools are flexible enough to allow end users in the business to extend and run them. The Pioneer Metal Finishing case study has four important takeaways. 1. Allow Time for Data Migration It usually pays to move from a service bureau, mainframe offering whose automation scope is fragmented to a more integrated SaaS offering that allows direct access to data by an enterprise Constellation Research, Inc. All rights reserved 4

5 From an implementation perspective, one of the key lessons learned is to allocate ample time for data migration. If the migration is from a service bureau type of offering, then it is key to start that process sooner than later. Moreover, it is helpful to directly learn from another customer who has successfully implemented the same product with a similar scope. Having access to their practitioners experience can be very valuable and potentially even more reduce implementation time frames. 2. Accept the Obvious ROI without Over-Analyzing Pioneer abandoned its ROI plans when it turned out that the company would be able to run roughly double the amount of processes for half the cost. When these improvements materialized, executives saw no need for an ROI study. 3. Choose an Integrated System When Possible In hindsight, it was clear to executives at Pioneer that they had stuck with the previous vendor solution for too long. What was a good fit when the company was based in few locations and had a less dynamic business strategy was not the same anymore in Executives are now actively replacing the company s ERP system with something that is a better fit, similar to the Kronos implementation. The best practice is to get a more integrated system, which is better than having to integrate different systems. It is better to rely on vendors to provide the integration between the functional automation areas, rather than relying on an IT department to do so. 4. Dump Legacy Solutions as Early as Possible Companies should not get stuck too long with an enterprise software system. That is especially true if the existing system is too rigid to fit the company strategy. Enterprise software should be an enabler and a multiplier of benefits - not the opposite. Selecting HR replacement systems requires much alignment among the HR department needs, corporate strategy, and the IT team requirements. Constellation recommends the following when embarking on vendor selection and implementation: 1. Continuously evaluate the fit between corporate strategy and the enterprise software landscape. If they are out of sync and it is too burdensome to overcome drawbacks of the enterprise system (or in the case of Pioneer rooted in the way the vendor provided its services), then it is time to look for a better system. 2. Use the opportunity to integrate systems where possible. The replacement of the system is not only an opportunity to modernize enterprise systems, but also to revisit the degree of process and system fragmentation that is at play. In case of doubt, err in the direction of more integration and having fewer systems to integrate Constellation Research, Inc. All rights reserved 5

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