building future hr operating model
TRANSCRIPT
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Journey To The Future HR Operating Model
Design the target HR operating model
Evaluate current HR capabilities
and identify gaps between
current and target states
Execute the roadmap to resolve
gaps and establish criteria for
measuring successful execution
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Why Should You Change Your HR Operating
Model?
To achieve HR agility
To improve operational efficiency
To make HR customer-centric and value-driven
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Future HR Model: McKinsey Agile Scenario
Automation and analytics reduces CoE size: fewer global expert roles, but with deeper focus
Business partners focus on talent value and become Talent Value Leaders
Pool of multiskilled professionals capable to perform most HR actions
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Five Approaches to Drive Next-Gen Operating Model (by McKinsey)
https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20
Digital/Our%20Insights/Introducing%20the%20next-
generation%20operating%20model/Introducing-the-next-gen-operating-model.ashx
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Future HR Model: 5 Imperatives (Gartner)
Create a dynamic pool of problem solvers
(about 40% of the staff)1
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3
4
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Provide agile support with next-gen CoEs (10%)
Replace HRBP Role with Strategic Talent Leaders (10%)
Replace Shared Services with GBS (15%)
• Create an HR COO role for strategic oversight
• Build an HR Technology Team to own technical infrastructure
• Add people relations manager to provide necessary functional
support
Source: Gartner „HR Operating Model of the Future“ 2019 report
Build a robust HR operations and Service Delivery Team
• Their job is to define, test and build talent solutions
• May come from traditional COEs, HRBPs or other LoBs
• Flatter network of interconnected teams
• Provide deep expertise in HR subject areas
• Employ more contractors and external experts
• Goal is to solve critical challenges
• Remove HRBP from all transactional activities
• They should own talent management strategy for their Bus
• Replace junior level HRBPs with people relations managers
• GBS function is much more customer-centric, not only
transaction-driven
• May perform long-term projects
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Insights from Deloitte „High Impact HR Operating Model“ Research (1/2)
Adaptability
High-performing HR organizations are designing
their operating and management models for
adaptability in response to never-ending disruption
Segmentation and Flexibility
High-performing HR organizations are creating the
future of work and enhancing worker performance
while customizing the worker experience through
workforce segmentation and flexible HR offerings
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Insights from Deloitte „High Impact HR Operating Model“ Research (2/2)
Platform-Oriented Technology Strategy
High-performing HR functions implement a
platform-oriented technology strategy to redesign
work and to stimulate high-value human
interactions
Agility across Functions
To meet the demands of the future of work, and to
fully leverage the benefit of the changing workforce
composition, HR must take a broad network-based
and workforce ecosystem perspective to its offerings
to assemble and activate teams of workers from
across the workforce spectrum (full-time, part-time,
contract, gig, and other workers, along with AI
integration).
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„Next Gen HR Operating Model“ (PwC)
https://www.pwc.de/de/human-resources/pwc-shaping-the-next-generation-of-hr.pdf
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People Value Chain Model (EY)
https://www.ey.com/en_gl/workforce/future-hr
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HR Architecture Approach (KPMG)
https://assets.kpmg/content/dam/kpmg/pdf/2012/07/designing-next-generation-hr.pdf
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Designing Operating Model with Different Canvas (Wardley Maps)
Value Chain – series of interdependent activities required to meet user needs
Evolution – maturity of each activity, ranging from unique to commodity
Wardley Map – map of structure of business capabilities needed to serve the customer
72%of HR leaders are operating or currently
implementing the three-part (Ulrich) model
Source: Gartner 2019 Report “The HR Operating Model of the Future”
54%of HR leaders are unsure about
alternatives to the three-part model
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Common HR Operating Model Challenges
HR functions lack digital
tools and skills to remain
competitive
HRBPs suffer from too
much transactional work,
lack strategic tasks
COEs lack flexibility
and resources to
properly respond to
business requests
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Example of Assessment of Existing HR Operating Model (PwC)
https://www.pwc.de/de/human-resources/pwc-shaping-the-next-generation-of-hr.pdf
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HR Operating Model Change: An Example
Strategic HR
HR Consulting and Partnering
HR Operations and Services
Strategic HR
HR Consulting and Partnering
HR Operations and Services
More leadership support
More HR projects
More transparency of HR
value to business
More user engagement
More people insights
Less process steps support
Less service brokering
Less go-to person
10%
30%
60%
20%
60%
20%Automation Simplification
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Governance Matters More Than Structure
https://humancapitalresearch.deloitte.com/article/five-top-findings-for-bringing-exponential-change-to-the-hr-operating-model-9854/
“There is a tendency in HR to
overemphasize structure when
considering the HR operating model,
thereby limiting the ability to anticipate
and address business needs”
Rather than a heavy focus on
structure, HR should look more closely
at governance. Governance is defined
as “a system by which an organization
makes and implements decisions in
pursuit of its objectives.”. A focus on
governance incorporates customers,
processes, and objectives required for
an operating model but shifts the focus
from structure to interactions and ways
of working
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Possible Change: Evolution of COEs
https://www.gartner.com/document/code/712489?ref=authbody&refval=3979979
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SuccessFactors Enablers for Future HR Operating Model
Stakeholders SAP SuccessFactors Enablers Outcomes
Self-services
Mobile access
Dashboards and reports
Automated and integrated workflows
Employees and
Managers
Greater level of autonomy
Faster time to complete processes
Improved user experience
Better decision making
Holistic employee data structure
Automated workflows
Ad-hoc reporting
HRBPs
Less time lost on data checks and error corrections
Transactional work moved to operations
More time for strategic HR projects
Standardisation of processes
Holistic employee data structure
Ad-hoc reporting
Automated workflows
COE experts
Time savings on manual reporting
Transactional work moved to operations
More resources for strategic HR projects
Services and Operations
Specialists
Self-services
Authorizations and workflows
Dashboards and reports
Integrated eco-system
Less time on manaul transactions
Less requests due to self-services
More time for value-added services
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End-To-End Processes for All Stakeholders Enabled by SuccessFactors
(„Manage Workforce“ Process Example)
Candidate/New Hire/Employee/Contingent
Next Level Manager/HC Approver
HR Business Partner
(Sourcing) Recruiter
Manage Positions
(Create/Update
Position)
Manage
Probation
Recruit &
Onboard via
Attract & Acquire
Process Bundle
or external
processes
Manage
Hire/Rehire/
Administer
Internal Hire/Add
Contingent
Worker
Update
Personal
Data
Update
Employment
Data (Data
Change/
Promotion/
Demotion/
Lateral Move)
Manage
Temporary
Employment
Administer Off
Cycle Salary
Adjustment
Manage
Termination
(Voluntary/
Involuntary/
Retirement/
Death)
Manage
Leave of
Absence
Manage Global
Assignment
(Start/
Monitor/End)
Global Mobility Specialist
Host Line Manager
Manage
Organizational
Data
Hiring/Line/Home Manager
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SAP SuccessFactors Leading Practice as Enablers
A service providing a
ready-to-use solution
for SAP
SuccessFactors
Based on leading
practices and
processes from SAP
reflecting real-life
implementation
experience
Offers end-to-end
HR processes, a
proven implementation
approach, clear
guidance, and
predictable outcomes
Reduces cost, avoids
typical implementation
risks, achieves a high-
quality implementation
and an unmatched
time-to-value for our
customers
SAP® Model
Company
In the next part of the document we will provide the list of Leading Practices based on real-life HR
implementations experience (part of SAP Model Company offering) and evaluate the relevance of
the practice for different components of HR operating models.
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Consider the Impact of Change When Deploying HRIS system
“Digital Transformation Is Not About Technology…
…if people lack the right mindset to change and the current organizational practices are flawed,
digital transformation will simply magnify those flaws”Harvard Business Review, 2019
• Working in the cloud requires an agile mindset, is the business prepared to take ownership?
• Consider the “to be” span of control; new processes and data will become available to your employees and managers
• Be clear about your new HR and IT operating models; changes must be clearly communicated with your organization
• Leverage the Leading Practices; adopting standard processes will lead to multiple business benefits, but individual
groups will need to change their ways of working
• Stakeholders need to have clear expectations and understanding of, and at the same time need to support the change
to their current ways of working
• With more people using the system, a clear definition of roles and responsibilities is essential; managers will have
increased ownership over talent processes, and the harmonization of processes may impact existing roles and activities
• Don’t underestimate data gathering; adopting a pre-built solution will inevitably lead to a change in what data you collect
today
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Harvard Model for Human Resource Management
Stakeholder Interests
• Stakeholders
• Management
• Employees
• Government
• Community
Situational Factors
• Workforce characteristics
• Business strategy
• Labour market
• Law & societal values
• Techology
HRM Policy Choices
• Human Resourceflows
• Reward systems
• Work systems
• Employee Influence
HRM Outcomes
• Commitment
• Congruence
• Competence
• Cost-effectiveness
Long termConsequences
• Org. effectiveness
• Individual wellbeing
• Societal wellbeing
Harvard Framework for HRM (Beer et al. 1984)
We should define target indicators and
measure success
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Examples of Metrics To Be Used in New Operating Model
Metric Type Metric
Time Savings
Time spent by HR administrators on personnel administration and org. management
Time spent by managers on personnel administration and org. management
Time to complete employee HR requests
User Adoption
Number of employees using self-services
Number of managers using self-services
Number of employees using mobile app
% of user adoption for new solutions
User ExperienceEmployee NPS
Employee Engagement Score
HR Efficiency
HR FTEs per 1000 employees
Total HR cost per employee
Number of local process deviations / number of harmonized processes / process steps reduced
Number of ad-hoc requests per year
Number of paper forms
% of HR data that is accurate
Number of data errors
Andrey Kulikov
HR Value Advisor at SAP SuccessFactors
Twitter: https://twitter.com/varkalos
LinkedIn: https://www.linkedin.com/in/andrewkulikov/