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Case Study

 

Nu Skin Fights Aging Systems with New HR Software

by Dave Hannon | insiderPROFILES

January 2, 2012

Nu Skin, a developer and distributor of health and beauty products, has employees in 28 different countries around the world. Previously, no centralized HR system existed to collect employee data or provide standardized HR reporting. Now, Nu Skin utilizes SAP ERP Human Capital Management -- and its journey to go-live is one that is truly unique.
 

The secret to success for personal care products and anti-aging company Nu Skin Enterprises is simple: It’s all about the people. This sentiment is expressed perfectly in a quote from Nu Skin’s Co-Founder and Senior Vice President Sandie Tillotson on the company’s corporate website: “Our people are part of an amazing force for good where they are building businesses, creating better lives for themselves and their families, and recognizing their unlimited talents and abilities.”

From Nu Skin’s beginnings in 1984, the business model has been one of putting people first — “people” being its 830,000 independent distributors and an employee force that continues to help drive the company’s growth throughout the world. By maintaining an immoveable commitment to its people, Nu Skin has succeeded in quickly maturing into an enterprise with annual revenues of over a billion dollars.

The company’s dedication to its people is evidenced by its decision to invest in enterprise software to advance its global human resources (HR) capabilities. Throughout every step of this technology implementation, the business thought about the “people” aspects of the project before the IT aspects: What kind of people should be on its project team? What are the business and cultural requirements of its HR users? What consultants should it bring on for the project?

Nu Skin’s project team carried forth a people-first attitude that laid the groundwork for a successful implementation and satisfied business users.

A Growing Need for an HR Facelift

For much of its history, Nu Skin, a developer and distributor of health and beauty products, has expanded its business globally into markets such as China, Korea, and across Europe. The company, which currently has employees in 28 different countries around the world, previously did not have a centralized HR system to collect employee data or provide standardized HR reporting to other parts of the business.

In the late 1990s, Nu Skin had standardized on SAP software to centralize other business functions such as finance and sales and distribution, but still continued to manage its employees manually at the local level. And the non-SAP HR systems in place were localized and didn’t provide visibility from a global perspective.

“Some regions had their own systems, but for us to get employee information here at the corporate level, we had to contact the region and get the data from them manually, which was a time-consuming process,” says Tausha Oveson, HRIS Analyst at Nu Skin. “We wanted a more consistent and automated process so we would know our employees and better understand who does what across the enterprise.”

When the company decided to implement a centralized HR system as part of a broader corporate initiative, a cross-functional team with representatives from both the HR and IT departments performed a thorough two-year market analysis to find and implement the right system. The analysis eventually led to the decision to implement SAP ERP Human Capital Management (SAP ERP HCM), starting with the functionality for personnel administration (PA) and organizational management (OM).

 
“We wanted a more consistent and automated process so we would know our employees and better understand who does what across the enterprise.”
Tausha Oveson, HRIS Analyst, Nu Skin
 

Building the Project Team

The key to any successful ERP project is building the right project team and understanding what the end users need. For Nu Skin’s SAP ERP HCM implementation to go smoothly, the team required in-depth knowledge of both the business processes involved as well as the various regions’ IT requirements.

“In the past, we handled any HR IT projects within the HR organization,” explains Oveson. “But to implement this particular HR functionality, we required certain technological skills, so we chose to partner with our IT organization. This was our first major project with IT, and this collaboration has worked out incredibly well.”

The members of the combined IT and HR project team were selected to complement each other with their areas of HR expertise and experience. The team members included: Georgia Ogles, Senior SAP Business Analyst; Martha Paget, Technical Business Analyst; Mark Roper, Senior SAP Business Analyst; Regan McCarthy, Programmer Analyst III; Tausha Oveson, HRIS Analyst and Team Lead; and a Basis team of senior systems engineers. Supporting the team was the project sponsor, David Daines, Vice President of Human Resources, and IT Business Integration leaders Amy Camara and Jay Barney. 

“Because this was an HR project, we wanted the system to run from an HR perspective,” says Daines. “Of course, we wanted people on the team who were good at configuring and maintaining systems, but we needed IT people who were intimately familiar with HR operations, processes, and issues.”

Bringing Consultants On Site

To further strengthen the project team and help identify and gather the requirements from the various offices, Nu Skin decided to bring in consulting help. As Daines explains, the team was looking for a consultancy with extensive experience with SAP ERP HCM — and one large enough to handle a global SAP implementation project, but not so large that Nu Skin wouldn’t be an important client to them.

It was important for Nu Skin to interview consultants individually to ensure they were selecting the right addition to the team both in terms of skills and personality. “Bringing on a consultant who doesn’t have the proper skill set or isn’t the right cultural fit for the company could drastically affect the project,” Daines says.

Another important requirement for selecting a consulting partner was the ability to perform on-site training. Oveson says Nu Skin’s geographically diverse user base would make it virtually impossible to have all users take courses locally, so Nu Skin wanted a consulting firm that could provide training on site during the implementation.

After an extensive interview process, Nu Skin selected Symphony Consulting as its implementation partner. “When we learned that Symphony provided on-site training, that’s what won me over,” says Oveson. “They recommended bringing a trainer on site with us. And that was exactly what we needed.” For more information about how integral Symphony Consulting was to the success of Nu Skin's SAP ERP HCM implementation, refer to the sidebar on the right.

David Daines

“SAP ERP HCM is a collaborative project between HR and IT. And while IT strategy plays an important part, HR needs to define what goes on, why it is being done, and how.”
David Daines, Vice President of Human Resources, Nu Skin
     

The Personal Touch

With external consultants rounding out the project team’s expertise, it was time to move on to requirements gathering and verification. And that meant hitting the road and visiting the different Nu Skin sites to discuss their individual requirements with the project team.

“We traveled out to each market individually to inquire about each site’s data and reporting,” says Oveson. “We asked them what data they currently collected, what systems they used to collect it, what reports they used, and what they would like to see in the future.”

According to Oveson, these face-to-face meetings were a key component of the project’s success. These meetings opened the project team’s eyes as to how different the requirements and corporate culture can be across the various regions.

For example, some countries require employees to disclose information for governmental reporting purposes — such as religion or political affiliation — which is data that many HR representatives might not think to include in a centralized information system. Also, employee family leave can differ across the world, which is a requirement that affects HR system design. “Some countries’ governments grant employees three weeks off in addition to the vacation time their employer provides,” says Oveson.

The in-person meetings also brought a somewhat-unexpected benefit to the project. The end users across the globe each had a much stronger sense of ownership and buy-in to the project because it was clear that the corporate HR team valued their input. “Employees got to feel involved instead of having the project thrust upon them — and that was a key to the implementation’s success,” says Oveson.

Daines agrees. “The face-to-face meetings let our internal clients know we were dedicated to making the software work for them,” he says. “We showed them that we would work around them — as opposed to them working around us.”

Reaping the Benefits

The project team divided up the implementation duties based on the skill sets of the HR staff, IT personnel, and external consultants. The phased implementation approach for each global region resulted in a smooth implementation, training, and go-live.

In 2011, Nu Skin went live with the SAP ERP HCM global functionality. The most immediate benefits have come in reporting HR data. In the past, if the finance department required a report on the number of full-time employees in a given market, Nu Skin’s HR department had to request the information from the local business, which could take weeks.

For example, HR periodically needs to report which employees have left the company or transferred to another department. “We used to have to manually create that report by gathering that data from the various regions and then manually send it out to the different departments,” Daines says. “Now, that report is automated and goes out whenever we set it to go out with the most updated information.”

 Not only does the automation make the HR department’s job much easier, but it also streamlines the auditing process as well. When auditors request employee data, it is both easier to gather and more accurate than it has ever been in the past. Reducing the amount of time required to maintain updated spreadsheets has allowed HR employees in the regional offices to focus on more strategic activities as well.

One of Nu Skin’s businesses previously managed its employee data entirely with spreadsheets. “With more of its processes automated since that office’s SAP ERP HCM rollout, the region has had an explosion of suggestions for process improvements made possible through the SAP implementation,” says Oveson.

Looking Ahead

With SAP ERP HCM already producing benefits, the HR organization at Nu Skin plans to expand the software’s use beyond OM and PA functionality and go live with time and payroll functionality in the US beginning the first quarter of 2012. The business plans to roll out functionality for a global time Employee Self-Service (ESS) and Manager Self-Service (MSS) solution in its first quarter. That functionality will offer employees easier access to and more control over their own information.

The functionality for payroll is also on the short list of considerations in the near-term. Nu Skin has a payroll system in place, but moving to an SAP system would allow for tighter integration with HR systems to streamline performance evaluations and enable compensation analysis.

And as the new projects roll out, they will be approached with the same strategy as the first ones, says Daines — with a focus on the people first. “SAP ERP HCM is a collaborative project between HR and IT,” he says. “And while IT strategy plays an important part, HR needs to define what goes on, why it is being done, and how.”

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