Achieving a Higher Return on SAP ERP HCM Investments. Presented by Kellie Fitzpatrick, Symphony Management Consulting

Transcription

1 Achieving a Higher Return on SAP ERP HCM Investments Presented by Kellie Fitzpatrick, Symphony Management Consulting

2 About Symphony Established in 2002 by experienced SAP ERP HCM Consultants to focus on SAP ERP HCM implementations Headquartered in Charlotte, North Carolina WBE Certified by the WBENC (Women s Business Enterprise National Council)

3 About Symphony Provide the most experienced SAP ERP HCM consultants in the business. Average of 8 years of experience per consultant. Industry Focus includes: Utilities/Oil and Gas Public Sector (Local, State, Federal, K-12) Pharmaceuticals Manufacturing & Distribution Consumer Goods

4 In This Session... We will learn: Which sub-modules of SAP ERP HCM will give you the most bang for your buck as well as what is required to get your system implemented How to transform your HR department from a reactionary environment into a strategic planning organization Understand your business processes Realize your corporate objectives How to determine the critical integration points in SAP ERP HCM and how to utilize this functionality throughout your organization How SAP ERP HCM will allow your organization to track and retain your most valuable assets your employees 4

5 What We ll Cover Overview of SAP ERP HCM Understanding SAP ERP HCM Functionality Why and how should you implement SAP ERP HCM? Integration with other SAP Modules SAP Security and SAP ERP HCM Improved Reporting Implementation Accelerators 7 Final Tips Wrap-up 5

6 What Is SAP ERP HCM? Human Capital Management is a module of SAP ERP which: Focuses on Human Resources functionality Encompasses both core and non-core sub-modules Can implement few or many modules As long as core functionality is implemented Integrates with other SAP ERP modules (Financials, EHS Management, etc.) 6

7 Core Concepts of SAP ERP HCM Date driven Begin and end dates used for all records Effective dates mean that record history is available Real time data Data is available immediately upon entry into the system Common access Standardizations for: Naming conventions Processes Spelling 7

8 Core Concepts of SAP ERP HCM (cont.) Central database repository Fully integrated with your business processes Central repository/management Qualifications catalogue Compensation Management Performance Management Organizational structure One point of entry for data Master data is entered once Interface to other applications that may be outside SAP (Time, Payroll) Concept of Infotypes 8

9 Infotypes Basics Screens of related employee information such as Personnel Data, Addresses, Pay, Organizational Assignment Some Infotypes are for a specific country only i.e (CDN), 0210 (US) Basic Infotype record groupings HR Master Data HR Planning and Development Time Data Recording Recruitment User Defined 9

11 Workforce Process Management Employee Administration Organizational Management Global Employee Management Benefits Management Time and Attendance Payroll and Legal Reporting Workforce Deployment Project Resource Planning Resource and Program Management Call Center Staffing SAP ERP HCM Functionality Overview Workforce Process Management Workforce Deployment EMPLOYEE Talent Management Workforce Planning and Analytics End-User Service Delivery End-User Service Delivery Manager Self-Service Employee Self-Service Employee Interaction Center Roles Delivery Channels Workforce Planning and Analytics Strategic Planning and Alignment Personnel Cost Planning and Simulation Employee Turnover and Retention Analysis Reporting and Benchmarking 300+ key figures, 200+ predefined queries 30 HCM InfoCubes in BW 11 Talent Management Recruiting Career Management Succession Management Enterprise Learning Performance Management Compensation Management

12 Workforce Process Management Contains the core components of SAP ERP HCM Personnel Administration (PA) and Organizational Management (OM) Also contains common functional areas such as Payroll, Benefits, Time, and Global Employee Management Enables users to streamline and integrate essential workforce processes Allows you to standardize and consolidate all workforce-related processes and data onto a single platform Ensures adherence to local regulations and laws Will operate with local languages, currencies, best practices, and regulatory requirements in facilities around the world 12

13 Talent Management Includes SAP E-Recruiting, Career Management, Succession Management, Enterprise Learning, Performance Management, and Compensation Management These components allow you to: Identify key attributes of your talent pool Measure recruiting processes Measure and analyze learning programs Analyze succession programs Monitor performance management processes Measure employee compensation programs 13

14 End-User Service Delivery Includes Manager Self-Service (MSS), Employee Self-Service (ESS), Employee Interaction Center (EIC), Roles, and Delivery Channels End-User Service Delivery: Gives Managers the ability to participate in HR processes such as employee development, compensation planning and approval, and budget and staffing activities quickly and efficiently Includes content, services, and processes to support management decisions that align with business goals Provides employees worldwide with the information, tools, and services they need to do their jobs, manage their own important life and work events and focus on contributing to business results 14

15 End-User Service Delivery (cont.) Employee Interaction Center Allow employees to access a centralized call center for their information Centralized, streamlined processing of manager, employee and HR requests for queries, and information Reporting available on the desktops of your HR staff to allow for distribution of workload 15

16 Workforce Planning and Analytics Allows the organization to strategically plan and align the workforce 16

17 Workforce Planning and Analytics (cont.) Personnel Cost Planning and Simulation Allows for the evaluation of upcoming employees and retirement ages Simulation of bonuses 17

18 Workforce Analytics and Planning (cont.) Employee Turnover and Retention Analysis 18

19 Workforce Deployment Includes Project Resource Planning, Resource and Program Management, Call Center Staffing Allows the organization to implement shift planning Deploy the right people with the right skills to the right positions at the right time 19

20 Workforce Deployment (cont.) Allows the organization to set up work centers Employees can be monitored on the progress of projects Track time through CATS, third-party tools, etc. Allow budgeting based on allocation 20

21 Core Components Personnel Administration (PA) PA is utilized to capture the core Master Data of an employee Employee main details Name, address, date of birth, marital status, pay, work schedule, banking, taxation, etc. Many of these details are required for further SAP ERP HCM sub-modules Basic pay, banking, and taxation information are all required before Payroll can be implemented Date of birth, marital status, and smoker indicator may all be required for SAP Benefits to work correctly Work schedules Time Management/Evaluation 21

22 Core Components Organizational Management (OM) Organizational Management not exactly a core component, but recommended to support further SAP ERP HCM functionality OM contains organizational details and structures such as: Organizational units, positions, jobs, managers (chiefs) Structural authorizations organizational units Workflow organizational units, chiefs Approvals (time entry and expenses), performance appraisals, compensation reviews, etc. chiefs Role-based security positions Personnel cost planning budgeting 22

23 SAP ERP HCM Functionality Expanded Benefits Manages all employee benefits such as Health, Insurances, FSA, Savings plans, etc. Supports Payroll in ensuring accurate Benefit deductions Time and Attendance Entry of time Application of all time rules (i.e., overtime) Supports Payroll, Controlling, Logistics, Project Systems Payroll Gross only to external vendor Gross-to-Net SAP ERP HCM Process and forms Automates paper-intensive processes 23

24 SAP ERP HCM Functionality Expanded (cont.) Global Employee Management Ability to manage employees in global organization, their movements, pay, etc. SAP E-Recruiting Identify new talent internally and externally for requirements Review Qualifications, career paths and goals for internal employees Leverage internal employees for potential new positions Perform comprehensive reporting and tracking of applicants and candidates 24

25 SAP ERP HCM Functionality Expanded (cont.) SAP Enterprise Learning Utilize for the following Classroom training Collaborative learning Information distribution Tailor for specific corporate requirements and goals Review the impact of SAP Enterprise Learning internally and externally Track costs for various modes of training Run comprehensive reports for trainees, course content, and overall effectiveness of training 25

26 SAP ERP HCM Functionality Expanded (cont.) Enterprise Compensation Management Align team and individual goals with corporate goals and strategies Set up bonus structures, merit plans, and weighting programs based on seniority in organization Tie compensation to performance measures 26

27 SAP ERP HCM Functionality Expanded (cont.) Performance Management Review specific employee goals and measure these to specifically set goals during review period Standardize employee reviews and appraisals Incent compensation based on performance Support a performance-oriented compensation process 27

28 SAP ERP HCM Functionality Expanded (cont.) Succession Management Review current employee goals and ratings before promoting them into a new position Understand employee preferences for positions to evaluate them for potential new career paths Utilize SAP Talent Visualization by Nakisa Implement development programs for employees who are exceeding their performance goals Identify specific key positions and target specific employees as potential successors 28

30 Different Approaches to Rolling Out HCM Functionality There are three approaches to how an organization decides to roll out their HCM investment Incremental All SAP ERP HCM modules are implemented across selected departments/agencies. Subsequent waves are completed until all department/agencies are on the system Multi-Phase Big Bang Selected SAP ERP HCM modules are implemented at the same time across all departments/agencies All SAP ERP HCM modules are implemented at the same time across all departments/agencies and are live 30

31 Incremental Approach Incremental Rollout Advantages All SAP ERP modules across all functional suites are available at golive reducing need for throw-away interfaces Pilot rollout of functionality to limited departments/agencies to confirm system configuration and take corrective actions prior to full system release Disadvantages Higher implementation cost because of multiple department/agency deployment (training, testing, production readiness, etc.) cycles Dual system maintenance and support help desk for both new ERP system and centralized legacy system 31

32 Multi-Phased Approach Multi-Phased Rollout Advantages More reasonable balance between cost and risk. Less complex than Single Phase Big Bang Highest priority functionality can be implemented first with lower priority functionality implemented in subsequent phases Disadvantages All SAP ERP HCM modules across all functional suites are NOT available at go-live increasing costs needed for throw-away interfaces No pilot rollout of functionality 32

33 Big Bang Approach Big Bang Rollout Advantages Least costly if executed correctly Quickest implementation timeframe All SAP ERP HCM modules across all functional suites are available at go-live reducing need for throw-away interfaces Disadvantages Highest risk of any implementation approach Requires extremely large, well-managed project teams Most complex of any implementation approach Significant amount of training required since all systems are replaced at once. No pilot rollout of functionality 33

34 Why Implement SAP ERP HCM? Implementation of SAP ERP HCM will provide for: Key organizational reporting (who, what, where, when, why) Standardization of information Can ensure all necessary data is gathered in a standard format Consistency of data One source allows for same spelling/layout/formatting Centralized repository instead of different databases, to support single information source 34

35 Expanded SAP ERP Implementation For an expanded SAP ERP implementation, which includes different SAP modules (i.e., FI/CO, PS, EHS Management, SD) SAP ERP HCM provides the necessary data required for proper support of other SAP ERP modules Financials (Company Code, Cost Centers, Travel and Expenses) Security (positions, organizational units) Controlling (time to work orders) Project Systems (time worked against projects) EHS Management (employee data, training/certificate records, tasks, work centers, exposure groups) Sales (commission payout into Payroll) 35

36 External Entities SAP ERP HCM can also provide needed information to your organization s service providers Payroll ADP, Ceridian Benefits Third-Party Administrators Enterprise Learning Training Suppliers Recruiting Recruitment agencies, Newspapers, Outreach organizations Compensation Management Salary Surveys 36

37 Effective Timelines Common Misconceptions We can rush through blueprint and make it up later Know your employees and select the IDEAL team Innovative Consistent implementation of new ideas Dynamic Able to meet time-sensitive deadlines Efficient Manages time wisely and keeps the end-goal in mind Adaptable Ability to move throughout the project life cycle with ease Leaders Transition from a reactive to proactive organization 37

38 Effective Timelines Common Misconceptions (cont.) We can always go back and work on this later Unidentified areas cause implementations to stop and go-back delaying the go-live Consider the following when working on the timeline: Union contracts Multiple payroll cycles Seasonal workers Complex calculations We can train people after we are live GET IT IN Train end users early and often Implementations usually slow down and lag due to lack of understanding and training 38

39 Effective Timelines Common Misconceptions (cont.) Test your system Did you capture all of your requirements? What if you missed something? Should you go back? Can you go back? Have a plan for once you are live Help Desk Super users Contact lists 39

41 Major SAP ERP HCM Integration Points SAP ERP HCM integrates with several other SAP modules Financials (Company Code, Cost Centers, Travel and Expenses) EHS Management (employee data, training/certificate records, tasks, work centers, exposure groups) Plant Maintenance (work centers) Controlling (time to work orders) Project Systems (time worked against projects) Sales (commission payout into Payroll) 41

42 HR-FI Key Integration Points Human Resources Organizational Unit Finance/Controlling Company Code Position Qualification Cost Center Company Codes are assigned to Organizational Units to ensure the Correct Country Codes and Currencies (as defined by Finance are applied). Cost Centers are assigned to Organizational Units Positions inherit the Cost Center from the Organizational Unit to which they are attached. Employee inherits Cost Center when assigned to a Position. Payroll results are posted to the correct Cost Centers. Cost Centers may be assigned directly to Positions for exceptional situations. 42

43 HR-IT Key Integration Points Human Resources Organizational Unit Position Qualification 1 1 Authorization Rules are assigned to Positions. More than one Authorization Role may be assigned to one Position. More than one position may be assigned the same Authorization Role. Authorization is applied to the Employee when they are given a SAP User ID and occupy the Position. Information Technology Basis/Netweaver Authorization Role 43

44 HR-EHS Management Key Integration Points 1 Work areas and Exposure Groups are assigned to Positions. Human Resources Organizational Unit Employee inherit Work Area and Exposure Group when assigned to a Position for Health & Safety reporting. Position Qualification Tasks are assigned to Positions for Health & Safety Workflow paths. Environmental Health & Safety may search for Employees with a particular Qualification. 1 Environmental Health & Safety Work Areas Task 2 Exposure Group

45 Plant Maintenance Work Center Work Order Operation HR-PM Key Integration Points Human Resources Organizational Unit Position Qualification 1 Work Orders are assigned to Organizational. Positions inherit Work Center from the Organizational Unit to which they are attached. Employee Inherits Work Center when assigned to a Position for Plant Maintenance reporting. 2 3 Work Center may be assigned directly to Positions for exceptional situations. Qualifications are assigned to Work Order Operations. Plant Maintenance searched for and schedules Employees with the required Qualifications to the Work Order Operations, according to their available capacity (integration with Time Management via CATS and shift planning). 45

46 Finance/Controlling Company Code Cost Center Key Integration Points Human Resources Organizational Unit Position Qualification Plant Maintenance Work Center Work Order Operation Environmental Health & Safety Task Work Areas Exposure Group Information Technology Basis/Netweaver Authorization Role 46

48 Is My Data Secure? SAP ERP HCM Security SAP ERP HCM security regulates access to employee data and other objects Determines who has access to what HR data Can be as granular as required (i.e., authorization limited to a specific object or enterprise element) Two general areas of HR security General Authorizations Structural Authorizations General Authorization Profiles What you can see! Consists of two different approaches with different viewpoints on which is best practice User-based vs. Role-based 48

49 Is My Data Secure? User-Based Security User-based security Profile is attached directly to user in the system Allows for security to be assigned to user who is not entered into SAP ERP HCM module and who does not hold a position (i.e., a contractor, external vendor, etc.) From an audit perspective, this approach ensures a review/audit of the user s authorizations every time he/she moves within the organization However, users who leave the organization are not always caught and are left active Tight controls on movements and departures are required to ensure no users have the wrong business unit s authorizations 49

50 Is My Data Secure? Role-Based Security With role-based security, a profile is attached directly to the position regardless of the person holding that position Allows for security to be determined by position requirements Persons can come and go from that position, but security remains the same Does not require audit/review of authorizations when person moves into that position, so less maintenance When person leaves that position, they lose that security, so no breach of security However, if you require constant review of a position s authorizations, this may not be the best approach for you If security is based more on the holder s skills rather than the position requirements, this may not be the best approach either 50

51 Is My Data Secure? Structural Authorizations Structural Authorizations Who you can see! Organizational Management component must be implemented for structural authorizations to work Structural authorizations grants access to objects contained in hierarchical structures Concept of a cones of organizational entities Controls access to objects (i.e., departments, groups of individuals) No control over tables, printers, etc. 51

53 SAP ERP HCM Reporting Tools First Level A variety of reporting options/tools are available depending on the need and functionality Reporting needs can often help determine which SAP ERP HCM functionality your organization will implement In terms of implementation time, cost, and complexity, there are three levels First Level is the quickest, cheapest and least complex Standard Reports SAP ERP HCM provides for hundred of delivered reports that can satisfy many business requirements For example, compliance (EEO, HIPAA), regulatory (taxation), benefits (Participation), Managerial (Budgeting, productivity), Master Data (head count, Date Monitoring) are all standard delivered 53

54 SAP ERP HCM Reporting Tools Second Level Second Level slightly more time required to implement and a bit more complex Ad Hoc Query Tool that provides access to all HR data stored in the central database, which can be reported on as required Simple but powerful tool Saved ad hoc reports are available to other users Some initial set up is required Quick Viewer Uses same concept as ad hoc reporting but is individual so reports created via Quick Viewer are only available to creator Good tool for the relatively inexperienced user 54

55 SAP ERP HCM Reporting Tools Third Level Third Level more expensive, more complex but tailored to address your specific needs ABAP Custom reports based on specific business requirements can be written by developer SAP NetWeaver Business Intelligence (SAP NetWeaver BI) Cubes, data sets Enhanced reporting from multiple systems outside SAP Integrated reporting from multiple systems 55

57 SAP Solution Manager Fully integrated into the Workplace to provide central management of project information Provides central access to tools, methods, and preconfigured contents, which you can use during evaluation, implementation, and operational processing of your systems Project Administration Business Blueprint Configuration Test Workbench Group/Global Rollout templates 57

58 SAP Solution Manager (cont.) Supports you throughout the entire life cycle of your SAP system Linked to SAP Online Support Mandatory after version SAP ERP

59 Pre-Configured Client For certain industries, pre-configured clients are available Public Sector Retail Services Automotive Provides for pre-loaded configuration with typical structures for a particular industry and default values for these structures Enterprise Structure Time Pay Benefits 59

61 Getting the Most Out of SAP ERP HCM Advice 2007 Aberdeen study on Best-in-Class outlined: Increased revenue per employee Improved employee performance Reduced cost of hire Improved ability to forecast annual retirement rates Improved the ability to determine projected growth per job category Avoid customizing SAP ERP HCM to do everything the same way as your old system, or because you think you need to record that information The emphasis should always be on streamlining processes, maintaining data integrity, and providing valuable information in a timely fashion to those who need it 61

62 Measuring ROI Making Your Business Case for SAP ERP HCM ROI can be measured by: Defining the overall purpose of your SAP HR initiative and then: Estimating the total costs and benefits both tangible and intangible Estimating whether a given benefit can be realized early in the initiative, mid way through the initiative, or late in the initiative Calculate obvious dollar savings achieved through: Benefits and Employee administration self-service Time saved by running customized reports from one system, etc. Take a closer look at your new HR processes Reduced number of people involved Shortened steps in a transaction 62

63 Making Everybody Involved Accountable When selecting a consulting partner: Does your partner understand what you need, or do they tell you what you need? Share ROI goals and benefits capture plan in the selection process Require consulting firms to outline how they will help you Understand your partners accelerators how will they help you succeed Consider risk sharing/gain sharing with vendors and consultants 63

64 Key Advice to Help You Succeed Keep ABAP modifications to a minimum Design an efficient Project Plan and Measurement tools Set goals related, monitor progress against those goals, and reflect the positive impact of progress in budgets over time Get the basic HR processes right. There is no point in looking for boardroom credibility if people are not getting their pay when they should 64

66 7 Key Points to Take Home Determine your total business needs to determine level of SAP ERP HCM functionality required Determine your reporting requirements first that will guide you to what SAP ERP HCM functionality you need to implement What other of your SAP modules will need SAP ERP HCM to support the most robust functionality Start with core functionality and build from there Don t forget that SAP security is often an organizational must and use SAP ERP HCM to help your delivery model Use SAP accelerators to reduce implementation time and cost You can never train or communicate to your organization to much 66

67 Resources Why implement SAP ERP HCM? SAP ERP HCM Features and functions featuresfunctions/index.epx 67

68 Your Turn! How to contact me: Kellie Fitzpatrick 68

69 Disclaimer SAP, R/3, mysap, mysap.com, xapps, xapp, SAP NetWeaver, Duet, PartnerEdge, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. 69