Taru Wibowo

Principal Consultant

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www.inersiacc.com

 

HCM - Human Capital Management is new paradigm of Human Resources Management. This new definition brings comprehensive consequences to the company, since this latest understanding of people as one of company resources is sifted onto completely different financial view. In the traditional concept, company put the people factor is just similar with other production resources as machine, material, etc; which financially is represented as costs. Hence the new concept, brings this people factor as capital to the business. When company recognize it as a capital, they will expect return. So, we will find "investing in people" as new terminology in this new dimension of HR.

What is HCM Roadmap

Human Capital Management requires integrated human resource management system to control and monitor the performance of their employment lifecycle (attracting, developing and retaining talents). Transformation is the answer, a well managed transformation for sure. Comprehensive transformation program will be critical factor of this journey. Roadmap is one of the important tool to that program to assure the vision of the company and to achieve the state of new human capital management phrase.

Systemic and systematic approach will be required to have proper HR transformation program. Many organization failed to implement their program due to improper planning and poor program execution. Common management tools like PDCA (Plan/Do/Check/Action) can be used on each of the stage in the project within the program. Roadmap is highlevel modeling of this this transformation program. The sequence of the projects will be arranged based on this model. To be able to build a well defined roadmap, company need to gather all information of existing condition of HR operations, get pictures of current and upcoming HR concepts as well as the technology trends, and set the company vision as basic references for all initiatives. With at least those three dimension, company should be able to start preparing the roadmap as the basis of the whole transformation program.

Below are high level procedures to set the roadmap of HCM transformation program:

1.  Perform HR due diligent to picture the vision, current practice of human resource management, existing technology, business processes, the employee perception of human capital management

2.  Understand new challenges in HCM, new business vision and strategy, condition of new structure of labor market, and other latest issues in HR, and combined them to set a new vision of the transformation initiatives

3.  Structure and draw "to be" business processes, technology, define critical success factor to each of efforts to ease the transformation program management and to control running cost and benefits

4.  Classified those new HR business process into set of logical information evolution, that consider the integration and relation of each of them. At this point, company will be able to set the sequencing of each of them.

5.  Cascading strategy of implementation into phases to get the realistic timeframe of achieving all HR transformation program

HCM Roadmap based on SAP HCM Solution

Implementation Staging of HCM program is a common strategy to give more reliable and less-error HCM system. Systematic sequencing of deployment strategy will be very critical for all transformation project.

SAP Human Capital Management is one of the best HCM application available in the market today. SAP provides solutions for almost all aspect in HR business processes. The integration, reliability and maturity of this product, gives confident to the company to run their HCM transformation initiatives. Using SAP solutions, company will then able to set their trasnformation program easily, by utilizing SAP HCM roadmap as references for all procedures explained above. Based on years of experiences in delivering SAP HCM solutions to customers, the best approach of achieving HCM transformation program is by sequencing the projects into 3 logical phases and 1 independent project as follow:

Phase 1. Employee Administration

In this stage, company focus on restructuring HR master data. This phase is comprises of basic business processes in human resources such as employee master data, organizational management, payroll, time management and else. Below are key function on each of business processes.

Employee administration

> Automate all basic processes related to personnel and employee information management.

> Use a centralized database that enables employees and management to access up-to-date, consistent information that supports HR- and business-related decisions.

Organizational management

> Manage and disseminate organizational structure and policy information.

Global employee management

> Support all processes involved in international employee relocation, from the planning and preparation of global assignments to personnel administration and payroll for global employees.

Benefits management

> Support diverse plan definitions.

> Tailor benefit offers to individual employees.

Time and attendance

> Facilitate effective time-management strategies.
> Provide convenient tracking, monitoring, record keeping, and evaluation of time data.

Payroll and legal reporting

> Handle complex payroll processes.
> Support current legal regulations in 49 countries worldwide, ensuring compliance with regulatory requirements for reporting purposes.
> Address considerations such as national currency, multiple languages, collective agreements, and reporting.

Phase 2. Employee Deployment

The solutions of this stage are usefull for some specific industry such as hospital, manufacturing, retail and else that concern on planning and monitoring of labor. the aim of this phase is to deploy the resources by estimating availability, capability and employee’s condition. Below are key processes in this phase:

Project resource planning

> Support project resource planning.
> Assign employees to appropriate jobs, projects, and teams using a workforce-scheduling application designed for professional service organizations.

Resource and program management

> Unify project management, time tracking, financial data, and employee skills information using a portfolio management paradigm.
> Support resource management, project portfolio management, project execution, and skills management.
> Facilitate workforce deployment across other SAP solutions.
> Create project teams based on skills and availability, monitor project progress, track time, and analyze results

Retail scheduling

> Schedule retail staff based on customer volume, shift schedules, and skills.

Phase 3. Employee Development

Developing employees is the strategic approach of maintaining the talents always in their high performance. The development itself is not always refer to training, many ways to update employees capabiliteis such as assigning to new jobs, setting targets and else. Assesment and scaling each of achievement can be used as indicator to monitor talents. This stage comprises of:

Competency management

> Identify and optimize the skills and competencies needed to successfully align your workforce with your business strategy
> Build a competency catalog leveraged by all talent management processes
> Define key competencies along your job architecture and cultivate talent pools accordingly.

Recruitment enabled by SAP E-Recruiting

> Accelerate and streamline the recruiting process and build up and source from a qualified, global pool of internal and external talent
> Perform comprehensive reporting and tracking of applicants and candidates
> Cut recruiting and sourcing costs and improve employee retention
> Use a collaboration platform to link to job boards, recruiting-service providers, and internal systems.

Employee performance management

> Align team and individual goals with corporate goals and strategies.
> Standardize employee reviews and appraisals.
> Tie compensation to performance.
> Support a performance-oriented compensation process.

Talent Assessment and Review

> Facilitate effective talent-review meetings and support your management team in calibrating the performance and potential of your talent
> Effectively review and calibrate your highest-potential employees and groom them to step into key roles.

Employee development

> Create short- and long-term development plans for employees and track and monitor their progress.
> Perform profile match-ups against positions to determine skill and knowledge which in turn can be tied directly to training plans to address the individual development need

Enterprise learning management enabled by SAP Enterprise Learning

> Provide training participants with a comprehensive experience that integrates Web-based, virtual, and classroom training
> Structure, deliver, and track knowledge transfer, and tailor learning content to individual learning styles and needs
> Plan, track, and measure training impacts and align learning strategies with your corporate objectives.

Succession management

> Make better and faster decisions about talent pipeline and successor rankings using theSAP Talent Visualization application by Nakisa.
> Identify and track high-potential employees and implement development plans to ensure that they are prepared to assume future leadership roles.
> Identify specific key positions and target specific employees as potential successors.

Compensation management

> Implement innovative reward strategies, such as performance- and competency-based pay, variable pay plans, and long-term incentives reward programs.
> Analyze and compare compensation packages using internal and external salary data to ensure competitiveness in the marketplace.

Talent management analytics

> Analyze employee skills and qualifications
> Evaluate the efficiency of recruiting processes
> Measure the effectiveness of learning programs
> Assess how well succession programs prepare employees to assume key positions
> Monitor the progress of aligning employee goals with corporate goals
> Analyze the cost-effectiveness of employee compensation programs

Independent Phase. System Deployment Strategy

One of the objectives of conducting HR transformation program is to reduce administration works of HR staff. By doing so, they will have more time to handle more strategic tasks. Deploying and distributing some of administration works to the line managers and the employees is the answer. This can be achieved simply by distributing the HCM system access to them, so they can grap their own data, managing it and keep it updated when required. Employee Self Service (ESS) and Manager Self Service (MSS) are products from SAP that allow company to perform this idea. The implementation of this tools is not depend on those 3 phases.

Using those 3 phases, company will get a set of clear plan for their transformation program. Those ideal approaches need to be alligned with the vision that they have. The ultimate goal of this article is to persuade company to have a realistic and company oriented program, that can be executed and monitored well by considering company's capability and limitation.

 

Conclusion

HCM roadmap is very important object to HCM transformation program. Company has to define it comprehensively to avoid major error during program execution. By having it well, company also able to reduce cost by avoiding unwanted expenses due to poor of planning. Many HCM system packages are available now in the market to help companies to intiate and share the best practice of preparing, planning, executing and evaluating the program. The collaboration of the best practice on those business package with experienced consulting firm will ensure the company to get the most of IT.