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Is this a new era for HR? Shared Services?

by Amy Thistle

May 14, 2010

Many organizations are turning to shared services to reduce costs and streamline processes.  Is this something your organization has considered?  Are you onboard, but you aren’t sure how to “sell” the idea to your upper management?

These tips came directly from a presentation Gary Gerstner from Deloitte delivered at our SAP HR 2010 event.

The business case identifies the rationale that sets the direction for your company’s global service delivery

Baseline - Where are we today

  • Project plan
  • Scope confirmation
  • Data collection
  • Global workshops

Analysis - What alternatives exist?

  • Delivery model
  • Data strategy
  • Decision and selection criteria

Business case - Financial implications and risk

  • Business case models
  • Global and local business case development

Recommendation - What is the plan to move forward

  • Impact analysis
  • Deployment plan
  • Roadmap

 To make the business case come alive, several key activities must occur:

Baseline - Where are we today

  • Region buy-in/sign-off
  • Local participation
  • Common metrics definition

Analysis - What alternatives exist?

  • Best practice
  • Defined evaluation  criteria
  • Rationalize the models
  • Road shows for buy-in

Business case - Financial implications and risk

  • Tangible/ quantitative
  • Intangible/ qualitative
  • Regional “flavors” for buy-in
  • Organization impacts

Recommendation - What is the plan to move forward

  • Leadership pre-sell
  • Roadmap
  • Publish the business case

Don’t Forget Key Benefit Levers for the Business Case  

Lever

Description

Process Efficiency

Streamline processes reducing the spend involved in manual transactions

 

Process Automation

 

Automation will streamline process, reducing spend for transactions supported manually

 

Data/Reporting Consistency

 

Reduce time HR Business Partners spend on gathering accurate data from various sources; Access to better data to support the business 

 

Technology Rationalization

 

Savings from headcount needed to support duplicate HR systems; Decommissioning benefits; Reduction in interfaces

 

Productivity Gains

 

Capacity creation; more strategic focus

 

Talent Management

Reduce cost associated with loss of top talent

Functionally-specific Benefits (exhaustive list not provided here)

Examples include compensation and benefits plan rationalization; talent acquisition process; financial impacts on process cost, cost of turnover, employee theft, work opportunity tax credits (WOTC); Payroll; Employee or Labor Relations; Time & Attendance

 

FTE versus Headcount

 

Ty pically there is a greater opportunity for reducing Full Time Equivalents (FTEs) than there is for actual headcount (whole person) reductions. Reason is we rarely see clients eliminate parts of jobs or have the ability to make a .2 or .3 portion of a job go away.

 

Indirect Savings

 

These are savings that HR drives but will occur in another portion of the business.  Typically business operations has some activity overlap with HR and while HR changes will free up these resources it is the business that decides if they want to reuse this capacity or take a savings. Counting this benefit varies by client and their approach to financials and business cases.

There are of course many other business benefits, but I want to hear from you!  Do you have an HR Shared Service Center?  What benefits have you realized and how did you get buy-in?

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