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First Generation Human Resource Transformation

By: Ms. Darshita Mirani

HR Transformation
HR Transformation initially focused on making HR operations more efficient and effective through process standardization and technology. First Generation HR Transformation represented a fundamental shift in HRs role, from transactions and administration to strategy and business transformation. The transformational HR department is one that is recognised by the organization as being an important contributor to the companys future and is engaged in activities that will help move the organization forward.

Why and when transform HR?

Why transform HR?

The need to provide the business with: More efficient, customer focused delivery of services and processes A more flexible HR service capable of responding quickly to organisational changes and priorities Transparency on the cost and value of HR

When is a review appropriate?

With the appointment of a new HR director After a merger, acquisition or restructuring When HR priorities do not tie into the business strategy During a period of change when the role of HR is unclear When the HR function is under pressure to reduce costs and demonstrate added value When outsourcing or establishing a shared service is being considered Whenever you feel HR performance can be improved

HR effectiveness methodology

Key Activities

Objectives of the transformation

Shift from transactional to value added activities in HR function Improve overall business support and customer service Improve functionality and cost efficiency for transactional, non-value added activities

Cut staff numbers Reduce indirect costs Focus on value-added activities Compliance responsibility to the outsourcer Cutting staff numbers Reduce indirect costs Greater efficiency Remaining in charge of quality Less redundancy cost Same as in SCENARIO 2 Best use of local staff expertise and costs

Outsourcing of payroll & admin

Payroll & admin in Service Centre:

Payroll & admin in Service Centre: Other location

sks R i nav d A

Suppliers market Quality risks Difficult transition High redundancy/ reskilling costs

Effort to gain consistency of processes Investment in HRIS Management of costs

Same as in SCENARIO 2 Higher investment in infrastructure Higher coordination costs

Chosen model
Payroll processing

HR Administration OUTSOURCING

Customer service

What First Generation HR Transformation Set Out to Accomplish

Reducing costs through shared services centres, selfservice,and outsourcing. Streamlining technology and information management. Managing people globally. Enabling HR to shift its focus from administration to strategy.

How Did First Generation HR Transformation Actually Play Out?

Business Drivers: The First Generation vision was for HR to become so efficient at transaction processing and administration that it could shift its focus to more strategic issues. HR Transformation teams were asked to justify their capital investments by showing they could reduce the overall cost.

HR Process

To build and implement a global HR function, transformation teams had to figure out how to work across national boundaries and how to phase their work geographically. At the outset, many companies attempted to establish global standards by building a template of the services, processes, and systems in their home countries, and then pushing them out to operating units in other.

Major Accomplishments from First Generation HR Transformation

New service delivery model. Global impact Process standardisation. Self-Service Reduced Administration Centralization

Proposed HR Delivery model

HR business partners, directly responsible for the HR management in each company and integrated in the structure of the company A head-office / centre of excellence formed of a group of highly-skilled specialists, focusing on strategic change, design and development of programs A services area that takes over the transactional, non-value added activities, from the HR function

Next Generation
The next generation of HR Transformation is more tightly linked to corporate strategy and to creating business value. The Next Generation of HR Transformation will look outside the function to help companies achieve their desired results and growth in an environment where competition is global and talent is scarce.

An HR Service Delivery Model for Today and Tomorrow

Addressing Strategic Business Challenges

Workforce planning Talent Management Merger integration Global HR Programme Management Change Management Global Workforce Security Global Mobility

HR Transformation Companies
PWC KPMG Deloitte Voltas Tech Mahindra


HR Staff Strength
6.9 per 1000 employees in 07-08 4.9 per 1000 employees in 08-09 0.25 % in 07-08 0.17 % in 08-09 31 days per employee on 31st Mar08 21 days per employee on 31st Mar09

HR Cost as %age of revenue

Employee Leave Balance

Employee Productivity

HR Transformation In Public Sector

HR transformation can take many forms in the public sector. For some organizations, it means migrating to shared service centers or to centers of excellence in order to reduce duplication and to enhance service consistency. HR transformation projects are focused on creating strategic partnerships between HR staff and business managers to meet business objectives. Transformation initiatives might only require reinventing specific policies and HR programs to capitalize on efficiencies to meet business goals.