There’s a reason why Ralph Lauren is included on FORTUNE magazine’s 2012 list of the top 50 most admired companies in the world. As a business that invests a lot of effort and capital in supporting its people, the organization truly considers its employees to be its most important resource. Because of the caring corporate environment at Ralph Lauren, the company’s employees are happy, loyal, more productive, and in turn, make the business profitable. A major reason the company is able to retain its employees and bring in cost savings is because it provides the tools and technology that ensure a happy workforce, such as dashboards, self-service capabilities, and mobile solutions.
The business went live with a dual implementation of SAP ERP Financials and SAP ERP Human Capital Management (SAP ERP HCM) in 2011. So far, of the available human resources (HR) functionality, Ralph Lauren is using personnel administration and organizational management in the US and Canada; and rolling out time management for employees to track and approve vacation schedules. The next phase of the SAP implementation focuses on the rest of the SAP ERP suite, including logistics, manufacturing, and sales.
Robert Sesink Clee, Senior Director of Human Resources Information Systems (HRIS) for Ralph Lauren, was brought into the company in 2011 to take ownership of the SAP ERP HCM system and build a strategic direction for the product’s use over the next few years. insiderPROFILES sat down with Sesink Clee to discuss the state of HR today, best practices for those in the field, and some ways that Ralph Lauren is potentially looking to expand its global footprint on the SAP ERP HCM platform.
Q: How long have you worked in the HR space and with SAP technology?
My history with SAP starts back in the mid-90s when SAP in the US was pretty much in its infancy. I worked as an independent consultant building SAP practices for HCM, servicing mostly mid-market clients. Throughout that time, I developed a good breadth of knowledge of SAP ERP HCM functionality. Working with mid-sized companies that often don’t have big budgets, you have to implement everything from soup to nuts, and this experience gave me a broad grounding of the product.
The SAP ERP HCM implementation at Ralph Lauren was already deployed by the time I joined. My charter was to take the reins of the system, look at it strategically to see how we could leverage what was already implemented, and then ultimately expand it to support future endeavors.
Q: Over time, how has the technology available to support HR evolved?
HR departments are trying to become less transactional and focus more on what I like to call the “care and feeding” of their own employees. HR generalists (HRGs) don’t want to spend all their time focusing on transactional efforts. Technology can support or streamline those necessary transactional efforts that have become a drudgery or pain. If those efforts become easier, we can implement more employee self-service functionality so that HRGs can fully focus on supporting employees.
SAP’s HR functionality, specifically, has grown in quantum leaps just in the last year or two, in large part thanks to the SuccessFactors acquisition. SAP ERP HCM has always been a great system for maintaining HR master data, payroll, and benefits, but user acceptance and adoption was fairly difficult, and popular consensus was that the solution was cumbersome to use.
SAP has made a lot of excellent enhancements to the software. For example, compensation management grew to be a very robust system as it transitioned from basic compensation management to the new and improved enterprise compensation planning. And the functionality for travel management evolved nicely. But then SuccessFactors came along with its sexy front end, and suddenly, the graphical user interface for SAP ERP HCM changed. SAP has phenomenal developers, and I think it might be the case that they were motivated by the look of the SuccessFactors applications to work on a new presentation layer for the core HR product. Comparing the look and feel of the product at this time last year with how it looks today, it’s the biggest shift I’ve seen in ages.
Q: What top challenges are HR departments struggling with right now?
Security and privacy are huge. Ralph Lauren is a very security conscious organization, especially when it comes to sensitive HR information. We don’t want our employees’ private information to be affected negatively or compromised in any way. We respect them too much to do that. But security goes beyond employee privacy. Companies must also ensure that they comply with regulatory requirements on a global basis, and this process is getting increasingly complicated.
A happy employee is an employee who will remain with the company for a long time. Replacing dissatisfied employees is expensive. When someone leaves the company, it can take upward of three months’ salary just to replace that employee and get a new person in the door.
One security-specific business challenge for HR, especially with global companies, is the management of data privacy across borders. This is where cloud-based applications come in. Because now, companies like SuccessFactors have navigated all those complexities very effectively and intelligently. Their experts in that realm help us adhere to global privacy regulations, which makes HRGs’ lives a lot easier and more productive.
Another regulatory challenge is the employment eligibility verification form, or I9, in the US. Employers must submit this form to the US government for all employees to verify their identities and establish their legal status as eligible to work in the US. As electronic verification of work eligibility becomes more and more prevalent, and possibly mandated in the US, organizations may find themselves scrambling to meet the requirements imposed on them.
The last and I think most crucial challenge is making sure that HRGs are better equipped to satisfy the wants and demands of the employee base. A happy employee is an employee who will remain with the company for a long time. Replacing dissatisfied employees is expensive. When someone leaves the company, it can take upward of three months’ salary just to replace that employee and get a new person in the door. And then you have to train the new person. If you can provide your HRGs with the tools they need to streamline transactional effort and to focus on ensuring a happy and retainable employee base, the cost savings, while difficult to quantify, are very significant.
Q: How does technology help ensure a happy and retainable employee base?
It all goes back to how well you maintain your employee data. The more you know about your employees, the better position you’re in to ensure that they are properly looked after. First of all, to help make employees productive, you need to ensure their compensation is on par with the compensation of your competitors. But money isn’t everything. You also need to make sure they are in an environment that they enjoy returning to every day. To achieve this, you need to be in tune with your employees and know who they are. If you know enough about them, you can better identify the high performers or people with high potential, for example. Then it’s a matter of providing them with a career path and keeping them motivated.
A lot of that information will become more important in order to retain good talent. But trying to translate employee data into actionable information is tough because it’s soft data. How does technology help you do that? It can provide analytics about your workforce through business intelligence (BI) dashboards and the like, using SAP BusinessObjects solutions, for example. But all the essential data presented in the dashboards is based on the master data available in the transactional system. You load the transactional data into the business warehouse first, and then through analytics tools, you can drill down and slice and dice the information a myriad of different ways to start noticing trends.
Looking at trends in order to build forecasts is important. You can take a year’s worth of business and employee data using BI tools and make projections, such as forecasting that within nine months to a year the business will have a huge growth or loss in population, just based on the headcount movements that occurred. Technology that lets you perform analysis and report on your raw HR data allows you to be more proactive. For example, you can analyze historical employee data to locate areas of the business with high attrition rates or where huge hiring efforts are pervasive. If you can see these trends, you can identify areas where employee productivity is down and then take action quickly. And it’s even more advantageous to be able to see those trends in a graphical representation. A picture really does say more than a thousand words.
Q: What is the state of HR reporting at Ralph Lauren today?
Our IT colleagues actually don’t touch the reporting for HR. We have a team of folks who focus on supporting the HR community and providing reporting capabilities to our users. These people don’t just provide reports, they provide reporting capabilities. So they teach our HRGs and the coordinators to use the reporting capabilities that SAP provides.
We have already completed a BI implementation that provides us with accurate headcount reporting to identify trends like: What are our company-wide retention and hiring rates for various demographic groups? Are we doing well from a diversity perspective? All of that information is now readily available and is proving extremely valuable. But we always need to be thinking about providing better analytics. We need to get to a position where we can provide consolidated reporting on and across our entire HR population.
Businesses can drastically improve their HR organizations by implementing a consolidated system to support them. If you have a bunch of disparate systems that dispense reports, which you then have to combine and consolidate into a consistent reporting format, you can’t get a good global picture. Therefore, your HR executives are receiving little pieces of information that are not integrated.
Senior HR executives are very busy people, and they want the ability to look at dashboards on their iPads instead of digging around for information from various different sources. They should be able to quickly and easily pull up metrics to determine why employees in a specific part of the organization are leaving or why one department is so much better at retaining employees than others.
Companies that can figure out how to accomplish this goal will breed HR leaders. At Ralph Lauren, we take pride in our ability to identify high-potential individuals who will contribute to the business’s profitability and in the company’s ability to sustain itself in a tough economy.
Q: Any advice for others just starting out on an SAP ERP HCM implementation?
When implementing any system, especially a system like SAP ERP HCM, it’s an incredibly important first step to evaluate an implementation partner. The problem is, especially if you’re a new adopter of the technology, you don’t know what you don’t know. You can ask all the questions you like of the vendors selling you their capabilities, but you should take their sales pitches with a grain of salt. I would counsel any company embarking on an expensive implementation of this nature to retain an independent trusted advisor who knows the product being implemented. This advisor can help keep the implementer honest and avoid a number of errors in the implementation itself. It’s imperative to have someone who has a vested interest in the company’s success, and who, because of his or her knowledge of the product, will push back where appropriate and validate the logic behind the implementer’s decisions or recommendations to go a certain way during the course of the project.
The other option is to hire a full-time employee who can be the person to take ownership of the product. The costs associated with bringing someone on board — either full time or temporarily as an independent advisor — are substantial, but they result in huge cost savings down the line. As pressure to meet deadlines and budgets mount, so does the tendency to take short cuts or de-scope essential functionality. A lot of this pressure can be alleviated by having an in-house expert who can streamline the implementation process.
If the project involves only an SAP ERP HCM deployment, I would recommend going with a small firm that knows the product inside and out. If you are doing a full big-bang SAP ERP implementation, you might consider going with a larger firm that can provide you with a breadth of functional expertise. And if that’s the case, you should still go get that trusted advisor who will ultimately own that system.
Q: What does the future look like for HR at Ralph Lauren?
Once we have laid down the transactional foundation to support functionality like time management, we can start looking at enhancing the real value-add capabilities we are doing in parallel, like building more robust and user-friendly dashboards. It will be nice to see all the reports that we have displayed as pie charts and bar graphs on an iPad. And we already have some small wins taking it to that level.
We are also looking at what applications might make sense to move to the cloud. We have some cloud-based technology in place, such as SuccessFactors for our learning management system. We are in the process of putting in cloud-based succession planning and are also considering performance management. Finally, we need to ultimately decide how to handle our employee master data globally in a manner compliant with global privacy laws, whether that’s keeping it on-premise or moving toward the SuccessFactors employee central solution.
At the end of the day, we need to focus on employee HR interactions and keeping people happy first and foremost. We need to provide our HRGs with actionable data and better reporting. And once we’ve nailed that down, then we can start looking at mobility and other fun features.