HR Technology Needs Assessment

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1 watsonwyatt.com HR Technology Needs Assessment Michael Cornetto Rufino Lomba April 19, 2007

2 Session Agenda Drivers for Acquiring HR Solutions Improving the HR value proposition Levers of change What corporate HR buyers want HR Solutions Marketplace Technology landscape Choices in acquiring HR solutions Marketplace overview The talent management niche Selecting HR Technology Solutions Strategic alignment Selection methodology Selection lessons learned Planning deployment Outlining your HR technology strategy Q&A 2

3 Drivers for Acquiring HR Solutions 3

4 Improving the HR Value Proposition Drive HR Efficiency and Effectiveness Value Creation Align human capital Delivery with business goals Deliver and develop world class talent Align organizational and Individual goals Reward success Plan the workforce Cost Containment Reduce cost and level of effort to acquire staff Reduce workforce administration costs Eliminate redundant spending Increase HR delivery scale Automate activity Long term impact. Focus is on human capital excellence Immediate impact. Focus is on operating efficiency 4

5 Levers of Change ORGANIZATION DESIGN TECHNOLOGY PROCESS REDESIGN Redefining the roles and responsibilities of HR, employees and managers to support the HR service delivery strategy Shared services Call centers Centralization / decentralization Workforce reallocation Designing an electronic communication network of fullyintegrated HR related data, information, tools and transactions available to HR, employees and managers HRMS -Integration Advanced applications Employee/manager self-service HR portals Redesigning the work to support the strategy and underlying business model Streamlining HR processes Performance measures Comparison to benchmarks OUTCOMES - Increased service - Strategic focus - Decreased costs - Alignment with business objectives - Efficient administration - Increased shareholder value 5

6 Our Research Shows: Wide Use of Internet to Deliver and Support HR Services Leading companies continue to use technology to improve employee access to information and capability. Trends suggest the HR departments have renewed interest in delivering HR services, supporting change, customer service. Enabling or im proving em ployee comm unications Easier/faster inform ation access From Intranet, Internet and Websites to: Improving HR service delivery Collaboration/sharing within company Improving employee/workplace productivity Driving/supporting culture change Improving performance/efficiency of comm. dept. Reducing comm unication costs Portals Social Media Podcasting Blogging Wiki s Collaboration MySite Improving customer service Source: Watson Wyatt HR Technology Survey =Low priority 4=High priority 6

7 Typical HR Portfolio of Technology Solutions User Experience Self-Service Interaction Employee Self-Service Manager Self-Service Employee Communications Mgmt Reporting & Analysis Learning Management Learning Training Content Administration Management Recruitment Processes Learning Candidate Applicant New-hire Contingent Delivery Sourcing Tracking Onboarding Staffing Strategic Performance and Talent Management Employee Performance Succession Planning Competency Management Compensation & Rewards Planning & Analysis Operational Time & Workforce Management Processes Ti & Forecasting & Absence Attendance Scheduling Management Transactional HRMS EE Records & Personnel Action Benefits Admin Payroll Position Management HR Compliance Source: Adapted from Forrester Research, Inc. 7

8 What HR Buyers Want Deliver HR service, application, and content via the web to compete with ubiquitous web consumer models Amazon, Airlines, Banks Acquire the Best Fit solution -multiple vendors/sites/applications are acceptable, but they are concerned about them being seamless, integrated and easy to use solution as viewed by end users Control over their own content Reduced technical administration and support needs (non-technical staff) Corporate/HR Branding Provide education and modeling where appropriate Fit within their service delivery strategy t Flexible, scalable and high functionality Save time and money 8

9 HR Technology Solutions Marketplace 9

10 HR Systems/Solutions Marketplace: Complex Offerings Oracle Taleo SAP AccuTime SumTotal PeopleSoft Capterra Kronos Saba JD Edwards Vurv ADP Convergys Salary.com etime Taleo click2learn Ceridian Fidelity PeopleClick Watson Wyatt Halogen Plateau Lawson Softscape CyberShift Best Software Kenexa WisdomNet Workscape Ultimate Software Ultipro SHPS Benefit Concepts Silkroad Pilat Meta4 WorkStream GlobalKnowledge Authoria Aon SAS SuccessFactors Genesys Employease Greentree Aliquant Mercer And 100 s More! 10

11 Some Order for the Chaos HR Delivery Benefits Consultancies 11

12 Acquiring Technology Support More Options Than Ever System Self-Service Data Management Administration Outsourcing SaaS Model SW License Model Fulfillment Call Center Reps Insourcing 12

13 Latest Focus/ Hottest Market Talent Management 13

14 Most HCM Capability is Underutilized Utilization of ERP HCM Modules Most payback on technology investment is in driving talent solutions. But much HRIS capability goes unused. How best should HR acquire and deploy HR technology that drive human capital programs like: Performance Management Compensation Administration LMS elearning Portal/ERM/Knowledge Management/Employee Communications Deployment and Use of HCM Modules Manage the Workforce 100% Base Benefits 60% Payroll 45% Ben Admin 45% Enterprise HR Portal 22% Recruiting 21% Time and Labor 17% Performance Management 10% Deployment and Use of eapplications eprofile 55% ebenefits 35% epay 57% edevelopment 22% erecruit 21% ecompensation 17% eperformance 10% 14

15 Talent Management from Single Solution to Suites 15

16 Selecting Technology? - Lets Get Started 16

17 Strategic Alignment (sample) Business Strategy Human Capital Strategy Corporate HR Strategy: Grow the core business Grow outside the core business Have fun doing it HR Vision: To be recognized as the employer of choice HR Priorities: Performance Management Process & Tools HR Goals: HR Service Delivery Employee Centric Employer of Choice Talent Integration Employee Integration Retention Strategy Technology Enablement Employee Support and Communication Total Rewards Philosophy HR Technology Strategy Company-Wide HR Technology Strategyt Example Core HRIS/Payroll Talent Solutions HR Helpdesk/Communications/Portal Skills/Workforce Management 17

18 Watson Wyatt HR Technology Selection Model Assumption: Boyd can identify functionality key to the operation of the business. HR and Finance have the flexibility to redefine business processes based on HRMS offered best practices. Characteristics: Assumes vendor list can be narrowed using high-level expectations and expert opinion Average organizational complexity and solution expectations Utilize Watson Wyatt selection acceleration tools. Such as requirements repository Limited mix of sourcing alternatives e.g. Software, ASP, limited services. Selection team chartered and empowered to make sourcing recommendation HR/Financials Delivery Project Strategy Planning & Business Objectives Business & Technical Requirements RFP and Evaluation Selection, Business Case & Negotiation 18

19 Selecting a Technology Solution Project Planning & Business Objectives Project Planning & Business Objectives Key Activities Description Deliverables / Milestones Establish project team and charter Conduct stakeholder workshops Set up team and logistics. Define roles and scope. Identify executive sponsors. Define expectations of business leadership, HR, and employee customers Project plans and schedules High-level requirements summary Overall service objectives Key decision drivers Review and establish Define range of scope of Sourcing strategy sourcing alternatives investigation Key Considerations Define a well represented selection team Identify must have capability include stakeholders beyond HR e.g. Finance, Business Operations Schedule demonstrations to level set terminology and expectations 19

20 Business Strategy Drives Prioritization Applying strategic and tactical filters to the evaluation process will help you focus on solution priorities Criteria Strategic Filters: Being Employer of Choice Improving Long Term Human Capital Management Creating Competitive Advantage Increasing Growth Capacity Leveraging g Cost Savings Tactical Filters: Time Cost Resources (IT) Resources (HR) Change Capacity Client Demand Evaluation of Initiatives Strategic Tactical Average Rank AVG Rank 1 Searchable Resume Database Automated Recruitment Process Automated New Hire Process Online Pay Stubs Online Total Compensation Statements Benefits Administration Policy & Program Management Compensation Management Tool elearning Performance Management Tool Exit Tracker Training Management Knowledge Lab Tracking Balanced Scorecard Reporting Online Service Center Manuals Skills Inventory Payroll / Headcount Forecaster

21 Selecting a Technology Solution Business Strategy and Requirements Key Activities Description Deliverables / Milestones HR/Financials Technology Strategy Business & Tech Requirements Define requirements - Conduct process review and workshops Conduct technology requirements workshop Review and establish vendor alternatives Collect and review existing process documentation and metrics Eight to ten process review workshops outline current delivery and identify best practices Review of current platforms and technology delivery capability Screen vendors for fit to Boyd decision criteria such as capability, platform, delivery model, cost Current state best practices Improvement Opportunities Self-service priorities Functional and application requirements summary Technology requirements summary Overall service objectives Vendor short list Key Considerations Link technology choices to business/hr priorities Define clear requirements and evaluation criteria 21

22 Selecting a Technology Solution RFP and Evaluation RFP and Evaluation Key Activities Description Deliverables / Milestones Convert business and technical requirements to RFP questions Develop RFP. Define demonstration scripts. Establish evaluation criteria and scoring tools RFP, Demo Script, Evaluation templates Evaluate RFP responses Evaluate vendor based on RFP responses. Conduct follow-up RFP assessment report Schedule and conduct product demostrations Scripted product demos with schedules Demo assessment summaries Key Considerations Define RFP requirements such that they differentiate vendors Ensure that evaluation mechanism is not biased by prior knowledge or preferences Prepare and establish scoring algorithm relative to real priorities 22

23 RFP Vendor Evaluation and Scoring Functional Requirements HR Administration No. Business Description Degree Briefly Describe Process of ffit Functionality Available Comments 1.0 HR Administration 1.1 New Hire Setup A) Automatically import and populate new hire record with information from GreenTree recruitment system. B) Provide integration of HR, Benefits and Payroll, so personnel changes are recorded in all appropriate database records. C) Provide capability to enter new hires in advance of their hire date. D) Ability via workflow or similar tool to notify support staff and other departments as to the arrival of new employee. E) Store Background Check and Drug Testing Information Degree of Fit 1 = Delivered Functionality, No Modifications Required 2 = Adaptation Using Vendor Tools 3 = Requires Custom Programming 4 = Targeted in Future Release (Specify Release) 5 = Use of a 3rd Party Product Recommended (Specify Product) 6 = Not Feasible 23

24 Selecting a Technology Solution Selection and Business Case Selection and Business and Business Case case Key Activities Description Deliverables / Milestones Finalize Selection Process Arrive at selection consensus. Perform due diligence. Identify gaps Final HRMS Recommendation Construct t High Level Compose estimates t of Business Case, Business Case economic and business benefits. Outline costs to achieve Risk & Benefits, Critical Success Factors Begin Contract Define and document key Negotiation prep Negotiations terms and expectations to document be negotiated Key Considerations Careful due diligence and TCO modeling Integrate legal and purchasing in project Socialize decision based on business case 24

25 Project Team (example) Management Team Title Project Manager Project Leader Typical Selection Team Functional Specialists Technical Specialists Responsibilities Individual dedicated 50% to 70% who serves as a leader and main contact of the Project Team. Coordinates the selection of the Project Team. Supports team in completion of project requirements, manages deliverables. Presents progress to management. Functional Team Title HR Specialist(s) Payroll Specialist(s) Responsibilities Strong knowledge of HR policy and procedures. Provides necessary requirements information in such areas as employee life cycle, development, selection, regulatory compliance and salary administration to help with the selection process. Strong knowledge of all payroll processing requirements. Provides necessary information requirements in such areas as interface to payroll and backfeed requirements Benefits Specialist(s) Strong knowledge of the organizations benefit structure. Provides necessary information requirements in such areas as health and welfare, savings plans, pension plans, FSA, FMLA, and, COBRA. 25

26 Project Team (example) Project Leader Functional Specialists Technical Specialists Typical Selection Team Technical Team Title Development Software Specialist(s) Responsibilities Provides organization specific knowledge of system development and maintenance standards. Represents/evaluates technical capabilities on technology. Hardware are & Infrastructure Specialist(s) Provides organization ation specific knowledge of system stem design, system stem platform specifications and system operating environments necessary to support the selection process. Knowledge of network protocols, system standards. 26

27 RFP & Vendor Selection Key Lessons Learned Application Selection Have clearly defined scope & set of system/process requirements Create/enforce specific timeline with key project team and procurement team members Ensure comprehensive evaluation approach, timeline, and scoring method (weights and ranks) Ensure demo scripts are defined in advance for product vendor Interview at least 3 current application clients who recently implemented similar modules Obtain Market data on current application pricing options Vendor (Implementer) Selection Identify specific service requirement and expectations for vendor Clearly communicate scope of product implementation scope Develop key decision criteria and vendor rating scale(s) Validate capabilities across all application modules Oral presentation should address specific implementation requirements per your needs (versus general implementation approach) Meet the entire team (not just the sales team) Contact at least 3 references for each vendor; use a standard interview sheet for each vendor 27

28 Defining a Deployment Plan Plan Big. Optimize. Scale Up. Plan Big: Start with a well-thought strategy that supports Amgen s business goals. Optimize: Gain early successes by focusing on nearterm goals, while allowing for future expansion of the vision Scale Up: Use the existing/ planned infrastructure to continue to expand and enhance the model Speed to 3rd Wave - Web Self Business Service Results 2nd Wave - Add Functionality Risk Time & Labor 1st Wave Reduction -Build Applicant Tracking Foundation Base HR System Smooth Transition Benefits Admin Payroll/Time & Labor Training Performance Mgmt Employee SS Illustrative 4th Wave Manager SS Workflow HR Portal Workforce Analytics Measurement/ Scorecard Talent Mgmt Other Value Time 28

29 HR Strategy Defines a Model for the HR Portfolio Employee Self-Service Employee Communications Manager Self-Service Mgmt Reporting & Analysis SOA and Best-fit Applications Candidate Sourcing New-hire Onboarding Applicant Tracking Contingent Staffing Training Administration i ti Learning Content Management Learning Delivery Employee Performance Competency Management Planning & Analysis Succession Planningg Compensation & Rewards SOA and Middleware ERP Core Data EE Records & Personnel Action Time & Attendance Position Management Forecasting & Scheduling Payroll Benefits Admin Absence Management HR Compliance 29

30 Q&A Michael Cornetto Office: 212/ Rufino R. Lomba Office: 781/

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