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© 2013 Towers Watson. All rights reserved.

Explore the Possibilities 2013 HR Service Delivery Forum

Developing an HR Service Delivery Strategy That

Leverages HR Shared Services and Technology at

Illinois Tool Works (ITW)

© 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. towerswatson.com

Agenda for today

What is ITW?

Our strategic imperatives for the company and HR

Our HR evolution approach

How we made the case for Workday

Robust change management

Obstacles and lessons learned

Next steps

1


What is ITW?

The largest company you never heard of

ITW has been a leading, global manufacturing company for over 100

years

ITW is a highly decentralized company that has approximately 60,000

employees across 840 business units

Global patents and patent applications exceed 19,000

Decentralization is not just a structure, but also a core philosophy that

is regarded as a competitive advantage

Source: ITW Forging the Tools for Excellence — Commemorative Booklet.

BACKGROUND

2

http://www.itwbrands.com/brand_details.aspx?brandID=5


HR Mission As business partners, we develop and deliver best-in-class processes and tools to attract, develop, motivate and retain a

diverse workforce, enable ITW’s organizational readiness/capability to manage change and execute on the enterprise strategy.

Partnering and supporting businesses in

developing organizational change

readiness

Operationalizing and protecting ITW’s

unique culture and values to drive high

performance

Accelerate building a diverse leadership

pipeline: right people, right place, right

time

Differentiate rewards to drive high-

performance culture

Increase HR skills and capabilities while

positioning HR as an enabler/

accelerator of change

Leverage technology and shared

services to inform decisions, improve

visibility to talent, increase efficiency

Leaders understand implications of

change and effectively anticipate and

lead their organizations to deliver

enterprise strategy results

A measure provides visibility of culture

and values throughout organization

VP/GM and functional division roles are

filled 80% internally

VP and above are 25% women

100% diverse slates for all openings

Top performers receive above-market

median total comp mix

Division, Platform and Segment HR

roles are filled 80% internally

A measure provides visibility of

employee satisfaction of HR services

High adoption rates of ESS, MSS

Create leadership development and talent management strategies

that will

HR

Str

ate

gic

In

itia

tive

s

2017

Go

als

Solid Growth Strong Returns

Best-in-Class Operator

Portfolio Management Business Structure Simplification

Strategic Sourcing

80/20 Business Model Sustainable Differentiation

Entrepreneurial Culture

ITW’s Unique Core Capabilities

Differentiated Performance

Enterprise Strategy

Translates Enterprise Strategy

Identifies priorities and defines HR philosophy for the Enterprise

Identifies HR implications of division LRP

Drives execution

Connects Enterprise and Segment strategies

Translates/embeds HR framework and tools to drive results

Business HR

LR

P i

n

Ac

tio

n

STRATEGIC IMPERATIVES

Build organizational capabilities by

Develop skilled and enabled HR team to

HRLT

Deep functional expertise

Creates frameworks, processes, tools

HR Long-Range Plan

COE

GHRD

3


We created an initial three-year plan to change HR service delivery

2012

Preparation and Infrastructure

2013

Initial Deployment

2014

HR Service Center Maturation

Develop HR Service Delivery model

and business case for change

Conduct vendor selection for HRMS

Develop detailed deployment and

change management plans

Initiate deployment of selected HRMS

Initiate policy harmonization efforts

Select and initiate implementation of

future state HR Service Center

technology including: knowledge

management; telephony, case

management and document

management

Finalize descriptions of and

competencies for HR roles; assess

talent and identify gaps

Go live with new HR Technology Platform

Outsource leave of absence

administration

Finalize HR Service Center infrastructure

design and implement quick hits

Introduce tiered model and new HR roles

Deploy technology enhancements and

employee and manager self-service for

talent management and compensation

Enhance HR portal

Go live with Service Center

Conduct additional process redesign and

vetting sessions

Begin to deploy employee and

manager self-service tools for

workforce administration and

reporting

Provide additional content in HR

portal

Complete transition of Field HR focus

on building business acumen and

supporting talent management

Complete transition of transaction

work from COEs to HR Service

Center and/or technology

Deploy technology globally

Project Management

TIMELINE AND APPROACH

Change Management and Communication

4


We created a business case for Workday

Current technology platform (2007) does not provide required

capabilities to support our enterprise and HR strategies

Very limited visibility into global talent

Lack of reporting for leadership and HR to confidently make business

decisions

Deployment of needed functionality requires rebuilding outdated core

application and licensing additional applications

Cumbersome process to make necessary changes to organizational

structure — requirement to support “Business Simplification”

Eventually Oracle will no longer support PeopleSoft 9.0

BUSINESS CASE – SAMPLE EXCERPT

Technology investment will be required to support business simplification and strategic imperatives

5


Business case for Workday

Is Your Organization Currently Implementing or Planning to

Implement a New Primary HRMS?

New HRMS Chosen

*Other responses are primarily regional or local solutions. Those mentioned more than once include Exact HR.

Global/Multinational Organizations only

Source: Towers Watson 2012 Service Delivery Survey.

n = 346

BUSINESS CASE – SAMPLE EXCERPT

18%

8%

74% Yes, new HRMS has been chosen

Yes, currently evaluating options

No

9%

19%

3%

2%

2%

0%

0%

2%

5%

2%

0%

31%

22% SAP

Will be provided by an HRO vendor

Workday

Oracle (Legacy PeopleSoft)

Ultimate Software/Ultipro

Oracle Fusion

ADP EmployEase

Lawson

Oracle (Legacy Oracle HRMS)

ADP Globalview/Streamline

SuccessFactors Employee Central

Custom, In-house solution

Other*

6


We built a robust change plan

Defined change management guiding principles for HR evolution

Compiled objectives and success metrics for the near, mid and long

term

Identified stakeholder groups

Developed change management major activities timeline and work

plan, including existing communications vehicles to leverage (largely

Workday-focused)

Created template for mapping major changes on HR evolution roadmap

Developing a change management toolkit for field HR

Drafted a key message map to inform various stakeholder groups (largely

Workday-focused)

Developing a roadshow presentation for painting the case for change

— Field HR

— Business Leaders

— Employees

CHANGE MANAGEMENT

7

© 2013 Towers Watson. All rights reserved.

Our change plan includes branding for our project


We have encountered obstacles along the way

The “when” and “how” were unclear

The highly decentralized structure is well entrenched

Problematic past technology implementations

Slow decision-making process

Difficulty in making decisions that don’t “stick”

Self-service is viewed as disruptive to the business

Underestimating the ability of employees and managers to embrace new

technology

The culture is slow to embrace change — including both Corporate HR

Staff and Field HR

LESSONS LEARNED

9


We have learned a lot as an HR team and as a company

Keep the message simple and repeat it often — You can never overstate the message

Know your critics and meet before the meeting — Involve your critics in the vetting

process before the meeting so that you get their buy-in early

Know your stakeholders and what you are trying to achieve — Didn’t position it as a

technology play, position it as changing how we deliver services and then justify

technology as the enabler

Start with small decisions — To keep the momentum, break down your big decisions

into smaller decision points that are more palatable

Be inclusive — Remove barriers so that people aren’t siloed. Include COEs and Field

HR

You need the right team — Have the courage to make tough decisions for your team

and their performance to ensure that you have the right team members to collaborate and

support the vision both today and in the future

Get energized by the small wins — Even though you are focused on the end goal,

celebrate the small wins that help you get there, even if they are slower to come than you

would like

Appreciate the past — You can only tackle the future if you understand the past and

recognize that implications cannot be ignored

LESSONS LEARNED

10


What’s next: 2012 – 2014 HR evolution timeline

Project Phases Dec

2012

Jan

2013

Feb

2013

Mar

2013

April

2013

May

2013

June

2013

July

2013

Aug

2013

Sept

2013

Oct

2013

Nov

2013

Dec

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

Field HR Role

Evolution

Continued assessment of HR Talent

Talent Gap Analysis

Create Development Plans and/or hire

HR

Operations

Evolution

Determine HR Tech and Ops Support

Strategy

Staffing

Scope of services

Vendor responsibilities

Records Strategy

Process Redesign

Hire HR OPS Supervisor

Hire Call Center Representative

Begin Global HR OPS Planning

Scanning Historical Records Complete

Telephony System Review

Telephony Configuration

Telephony Launch

Portal,

Knowledge

Base (KB) and

Case

Management

(CM)

Vendor Contracting for KB and CM

Hire Portal Manager

Design and Configure: KB and Case Mgmt.

Design and Configure: New HR Portal

Build Technology and Content: KB and Case

Mgmt.

Build Technology and Content — HR Portal

UAT/Training/Launch KB and CM

UAT/Training/Launch Portal

Launch KB and CM

Workday HRM and Comp Planning Deployment

Mss/Ess

Change

Management

Develop Branding Strategy and Key

Message Platform

Stakeholder Change Impact and Needs

Create Change Strategy

Engage Stakeholders

Training, Communication & Involvement

Aug 2014: New Telephony System Go Live

Go Live – Workday Support for HR

July 2013: Deploy KB and CM (and Begin Training)

Workday Go Live June 2014: Employee and Manager Self-Service Go Live

Begin Global Workday Deployment Strategy

March 2013: Hire HR Operations Supervisor

Comp Plan Go live

Leave Outsourcing Support*

Employee and Manager Self-service Go Live

December 2014: Launch HR Portal

Begin supporting Wilsonart Divested Employees

Complete Scanning

*Dependent on when Leave Administration is outsourced.

NEXT STEPS

11


Questions?

12


Today’s presenters

Yvonne Hurlbutt

Director, HR Technology and Operations

847.657.5109

[email protected]

Denise LaForte

Director

[email protected]

312.201.5212

Jennifer Narbutis

Manager, HR Operations and Process

Improvement

847.657.4065 [email protected]

13

mailto:[email protected]

mailto:[email protected]

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