Accelerating HR through SAP

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Objectives
   

Evolution of HR Function Drivers of Change Changing Dimension/Role of HR Function Need for Change and the Technology Option ERP – Need & Evolution SAP Facts & Functionality of HR Module Conclusion Q&A

   
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Personnel Management

Personnel Management - Personnel Management is an administrative record-keeping function, at the operational level. Personnel Management attempts to maintain fair terms and conditions of employment, while at the same time, efficiently managing personnel activities for individual departments etc. It is assumed that the outcomes from providing justice and achieving efficiency in the management of personnel activities will result ultimately in achieving organizational success.

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Human Resource Management

Human Resource Management - Human resource management is concerned with the development and implementation of people strategies, which are integrated with corporate strategies, and ensures that the culture, values and structure of the organization, and the quality, motivation and commitment of its members contribute fully to the achievement of its goals.

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Difference??

HRM is concerned with carrying out the SAME functional activities traditionally performed by the personnel function, such as HR planning, job analysis, recruitment and selection, employee relations, performance management, employee appraisals, compensation management, training and development etc. But, the HRM approach performs these functions in a qualitatively DISTICNT way, when compared with Personnel Management.

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Difference??

Personnel management is workforce centered, directed mainly at the organization’s employees; such as finding and training them, arranging for them to be paid, explaining management’s expectations, justifying management’s actions etc. While on the other hand, HRM is resource – centered, directed mainly at management, in terms of devolving the responsibility of HRM to line management, management development etc.
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Difference??

Personnel Management is basically an operational function, concerned primarily with carrying out the day-to day people management activities. While on the other hand, HRM is strategic in nature, that is, being concerned with directly assisting an organization to gain sustained competitive advantage.

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Difference??

HRM is more proactive than Personnel Management. Whereas personnel management is about the maintenance of personnel and administrative systems, HRM is about the forecasting of organizational needs, the continual monitoring and adjustment of personnel systems to meet current and future requirements, and the management of change.

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Human Resource Wheel

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Competence of HR Professional
Business Understanding Change Management

Personal credibility Culture Management
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HR Processes & Practices

Shift in HR function

HR has started to shed the traditional role of:  A little strategic work, a little consulting, and a lot of administrative duties  Empowering line management to perform necessary HR roles
Strategic Consultative Administrative
Old paradigm

Strategic Consultative
Value adding service & delivery

Strategic Strategic

Consultative

Admin
Emerging paradigm Increasing Relevance

Admin
Potential future state

A new reputation and value proposition for our HR requires a fundamental mind-set change in the organisation, however more critically mindset change from the HR Leaders.

HR Caught Between Conflicting Priorities
  

While Pressure is increasing for HR to take on a more strategic role in human capital management … Factors Contributing to Need for Strategic Human Capital Management

  

… costs need to be managed and need to work smarter and more efficiently Factors Contributing to Cost Pressures on HR

M&A
na Ma

Finance Regulations
e gem nt

Customer Sophistication
De l

ry ive

C e han g

Sta f

f

Market Pressures

ce

ti Ra

ning

f-s er vi

ali on

P l an

Se l

Restructuring 12 Technology

c gi te ra St

za n tio

Re

cru itm

en

t

r fo rk o W

ce

Talent Shortages

Outsourcing Customer Sophistication Price Recession

Leverage Areas for HR Contribution
Leadership (Values and Competence)

Technology (Speed, cost, quality)

Strategic Intent / Vision

Talent Management (Individual/ Organization)

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Change management

Where are Organizations today ?
Organisation X
Sales / Maintenance Operations Distribution

HR

Purchasing

Finance

Most legacy IT systems are aligned by function and by departmen t
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© SAP 2008 / Page 14

Where does this leave the organisation ?

The Typical IT Landscape: Multiple Disparate Systems Some key issues :
           

Lack of data and process integration single view of the data Lack of data integrity Multiple Vendors High Support Cost Support Availability Information delays Duplicated Efforts Current Technology Adoption Levels Upgrade Strategies Platform Strategies

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High TCO

The Complete TCO Picture some typical applications The TOTAL

cost of ownership =
Cost of external platforms

External Applications

Portals

Meter Route Reading Management Reading

Core Applications

One single end to end …. Land GIS Information integrated solution is needed HR Billing Payroll Finance to minimise the Total Cost of Ownership Asset
Maintenance Purchasing ....
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$
+
Cost of integrating applications and platforms

+

Cost of applications

is clear that these applications need to be integrated: BUT HOW

ERP aligns organizations around core business processes
Organisation X
HR Purchasin Operation g s
Sales / Distributio n

Most legacy IT systems are aligned by function and by department ERP works across these traditional barriers...

Maintenan ce

Finance

... and aligns your internal processes ... and uses common data

Order Processin g Stores and Procuremen Custome r Services Financial Reporting Etc…

ERP is a single, integrated business solution that works across your entire organisation
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2008 / Page 17

What is ERP ?
Enterprise resource planning (ERP) is the planning of how business resources (materials, employees, customers etc.) are acquired and moved from one state to another. An ERP system supports the business system that maintains in a single system the data needed for a variety of business functions such as Manufacturing, Supply Chain Management, Financials, Projects, Human Resources and Customer Relationship Management. An ERP system is based on a common database and a modular software design. The common database can allow every department of a business to store and retrieve information in real-time. The ERP modular software design should mean a business can select the modules they need, to improve business performance.
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Source : Wikipedia

Effect of Using Integrated Technology (SAP)?
TCO today INNOVATION CONSOLIDATION
 In

10% 30%

utilising integrated solutions

TCO

40%
 Cost

OPERATION

most enterprises up to 75% are personnel or services costs software and infrastructure only 25 %

60%

 Hardware,

drivers:  custom code  interfaces  number of (integrated) systems  testing  end user training

20 - 25%

35 - 40%

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SAP ERP allows the achievement of business strategies in an integrated but open and extendable architecture
Company X
Sales / Distributio n

ERP : Addressing all INTERNALLY Focused Requirements
HR Purchasing

Operations

Maintenance

Finance

Analytics

Financial Analytics

Operations Analytics Management Accounting

Workforce Analytics

Strategic Enterprise Management Financial Supply Chain Management Talent Management

Financials Human Capital Management Procurement and Logistics Execution Product Development and Manufacturing Sales and Service

Financial Accounting

Corporate Governance

Workforce Process Management Inventory and Warehouse Management Inbound and Outbound Logistics

Workforce Deployment

Procurement

Transportation Management Life-Cycle Data Management

Production Planning Sales Order Management

Manufacturing Execution Aftermarket Sales & Service

Product Development

Professional-Service Delivery

Corporate Services

Enterprise Project and Environmenta Real Estate Travel Quality Global Trade Asset Portfolio l Compliance Management Management Management Services Management Management Management

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A typical view of a World Class ERP Solution

In Conclusion
An integrated (SAP) solution delivers all of the requirements to run an effective and efficient organisation……. ….whilst reducing the ongoing operational costs….. And delivering a single, consistent, accurate view of the organisation !
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What is SAP R/3?
             

SAP = Systems, Applications and Products in Data Processing (R = real time, 3 = 3 tier) German Based Company 3rd Largest Independent Software Vendor in the World SAP: ERP Market Leader 80% Fortune 500 Companies Use SAP Over 25,000 Customers in 120+ Countries Over 32 million users Client/Server Technology Highly Customizable Based on Industry Specific Best Practices Multi-lingual: International Based on Open Standards Integrated Applications System: Modular in design
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Advanced SAP ERP Human Resources Modules

    

Personnel Administration Organization Management Time management Payroll Training and Event Management

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Summary
 

Employees are among a company’s most important assets Without qualified and motivated employees, a company cannot succeed Human Resources department responsible for:  Ensuring that the company can find, evaluate, hire, develop, evaluate, and compensate the right employees to achieve the company’s goals  Employee training and development, succession planning, and termination Managing, sharing, controlling, and evaluating the data required to manage a company’s human capital are simplified by an integrated information system Additional features of SAP HR systems address today’s changing technology and legislation
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Recommendations

SAP prospects and users should invest in gaining a better understanding of all available SAP solutions to match current business strategy to an SAP implementation strategy. Current SAP users should build a plan to move to as current a version of mySAP.com as their budgets and risk tolerance allow rather than try to run supported versions until they are no longer suitable. SAP users considering an upgrade should also include planning for consolidated instance strategies that will adequately support enterprise globalization and system recovery. To circumvent potential relationship issues, SAP users should proactively implement an enterprise wide relationship strategy with escalation policies within their own organization as well as with SAP.
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Competence of HR Professional Business Understanding Change Management

Personal Expertise in credibility use of technology Culture Management
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HR Processes & Practices

CHANGING ROLE OF HR THROUGH THE INTRODUCTION OF INTEGRATED TECHNOLOGY
HR as Business Partner New role
Business Value

10%

Strategic support

Role transformation

30%

Consultative

Process redesign Integrated systems

25% Strategic support
Consultativ e Administration

Project emphasis

55% 20%

60%

Administration

Old paradigm Reduced cost
Ndawu/Manchu Consulting

New paradigm New organisation

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Q&A