Taking a collaborative approach to problem solving

Four lessons learned to achieve a successful ERP transformation


The right transformative approach will help your organization focus on strategic people initiatives that produce business results.


In brief

  • Technology isn’t the only component to consider when undertaking an HR transformation.
  • Not having a plan to manage multiple data conversion processes can cause a significant delay in an implementation.
  • Use organizational influencers to your advantage to help change behaviors and mindsets for a successful transformation.

Enterprise resource planning (ERP) transformations can differ depending on your organization’s needs — desired outcomes typically include efficiency and cost savings, increased compliance or improved user experience. Often it is a combination of all three. These improvements foster the ability to shift focus from operational priorities to strategic priorities.

For finance, this can mean being able to better predict financial results, model transactional initiatives or changes and improve customer interactions. For human resources, it could involve attracting or developing new talent, culture change, employee wellbeing, workforce planning or leadership development.

What does ERP transformation mean for your organization?

An ERP transformation is complex and crosses many functions. In this article, we will focus specifically on an HR transformation, but the lessons learned can apply to any large-scale technology-enabled transformation. Figuring out what the transformation goals are for your organization is part of the process.

 

Typical organizations, especially those that have been on a legacy system for years, tend to spend 86% of their HR and payroll resource time and budget on blocking and tackling activities: getting employees paid correctly, covering life events without disruption to the employees, hiring and terminations, monthly/quarterly/annual cycle activities, and maintaining compliance. This leaves little time for strategic initiatives for business priorities, such as:

  • Workforce vitality
  • Organization and workforce strategies
  • Performance strategies
  • Employee experiences
  • People enablement

 

Most decision-makers plan to address these priorities when selecting and implementing a new HR/payroll solution, but they also report having little time to focus on these even once the implementation is complete. While not the sole reason, this is a contributing factor to why 67% of senior business leaders have experienced at least one underperforming transformation in the last five years.

This happens because we can fall into the trap of believing that technology is the missing component. Technology enables the transformation, but it’s only one missing piece. By putting humans at the center, shifting where work is performed, supporting that shift with a leading practices-based service delivery model, and gaining user adoption by influencer-based behavior change, you can get the most out of your new technology.

Use the below lessons learned to work toward a successful technology-enabled transformation.

1. Don’t start with the technology

The prevailing approach to any major system implementation is selecting the technology and jumping into the first stage of the project, which is planning. This involves mapping out the dependencies across the functions involved and sequencing them in a detailed timeline. However, the work related to data readiness and data complexity are almost always underestimated, especially if data is stored in multiple systems across the globe. To prevent this complexity from causing a significant delay in the implementation, ensure that you have evaluated your data quality and planned for managing multiple data conversion processes while also maintaining data compliance and data security.

Another trap is trying to get to the design as soon as possible to speed up the time to value for going live. For HR specifically, this is designing the hire-to-retire business processes, including deciding who initiates the processes, who approves them and who gets notified along the way.

The issue becomes how do you design around those business process steps if you haven’t spent time planning for your future state operating model. Remember, 86% of resource time today is spent on non-strategic hire-to-retire activities. To shift that resource time, you must fundamentally shift where and how the work is done. Creating a transformation framework takes time, planning, stakeholder alignment, business buy-in and a change in mindset and behaviors, which are all part of a shared purpose and vision. Given that cloud licensing fees typically start upon signing (unless you have negotiated a delay into your agreement), this future state operating and service delivery model design and stakeholder alignment are things that should be accomplished after you know the direction in your technology selection but before you begin the design stage of the implementation.

The ideal approach involves addressing all these readiness items in parallel with selecting a vendor in a Phase 0 engagement. By leveraging a team that has knowledge of the pending HCM solution and optimizing HR business processes and employee experience design, you can bring your ideal future solution to life. There should be collaboration on a compelling “why” behind the transformation, where leaders and workers can both find purpose. Depending on your current state, this can sometimes take several months or longer to accomplish.

2. Empowering users requires a solid service delivery model

Most organizations go into an HR technology implementation ready to empower their employees with a self-service model. There is a critical dependency here that often gets overlooked: for a reliable user experience, a knowledge base-enabled call and case management service delivery solution is a must-have. Such a solution could be organized like the following:

  • Tier 0 — Portal and knowledge base for the first line of defense for employee inquiries
  • Tier 1 — Service center representatives who use the same knowledge base as the employee to provide support
  • Tier 2 — HRIS or HR Center of Excellence (COE) representatives who investigate inquiry reasons that were not able to be resolved at Tier 1
  • Tier 3 — Corporate HR or HR COE representatives to follow up due to the sensitive nature of the case (usually an employee relations issue)

3. Experience design requires advanced preparation

Not all cloud solutions provide all the technology components necessary to complete the operating model in a way that maximizes adoption (think self-service, automation and advanced analytics layers in your technology stack). Organizations spend $300 billion a year1 on the employee experience, yet these investments in digital and analytical HR transformations are failing to deliver on the promise for many of the reasons already discussed. Studies have shown that 50%2 of employees say that the technologies they are expected to interact with are difficult to use. Couple this aspect with the fact that employees want more flexibility in when and where they work, and the need for simple, consolidated and easy-to-use solutions becomes paramount in any HR transformation.

Perhaps your corporate strategy already utilizes a team collaboration app for other business functions that can be expanded for HR use. If so, evaluating the overlapping functionality (e.g., onboarding, provisioning, notifications, communications), especially with a lens on maximizing the digital user experience, is important to complete before beginning the Human Capital Management (HCM) Cloud design because it will influence and alter that design.

These are all complex factors to consider when introducing the new technology to your users. Thinking through the end-to-end design is imperative. It is important to know what the entire technology stack is comprised of before you begin the HCM Cloud design. If you get the technology right, it can bring the transformation to life. Making the transformation real to your people by putting them at the center of design, development and testing is critical for transformation success.

4. New skills required for success

Now that you’ve optimized your future state operating and service delivery models and technology design for success, making the organization aware of the changes planned, gaining their input, educating them on what will be available, communicating what it means to them and holding them accountable is part of realizing the success.

Strategic use of influencers in your organization is the key to changing behaviors and mindsets for a successful transformation. Influencers are the most trusted people in your organization and are often sought out for their expertise, support and perspectives. Often invisible to leadership and typically further toward the frontline of your organization, influencers quietly shape your organization’s attitudes, behaviors and culture.

With your influencers identified and engaged, planning for the behavior change and mindset shift becomes tangible and manageable. A recent EY-Oxford transformative leadership survey shows that the transformation success rate nearly doubles (2.6x) when you emphasize people at the same level as technology and process. In fact, success rates improve by 135% when you actively develop new ways of working, 137% when you get people the skills they need to lead the transformation (which can now be captured in your planned technology), and 145% when you design to promote collaboration across groups.

Key takeaways

When done the right way, with the right transformation, your organization will have time to focus on strategic people initiatives. Defining what those initiatives are will be equally important, if not more important, in impact. And defining them is unique to each organization.

But putting the right operating model in place as part of the technology implementation is required to free up resources for those initiatives. Readiness plans must include defining the operating model, listening to the voice of the customer, gaining stakeholder alignment, and assessing all of the future state technologies that will be involved in the user experience. 

Summary

The key to a successful HR transformation is shifting resource availability away from an operational focus to strategic, human-centered priorities. Putting the right operating model in place, keeping a focus on all the technology layers in the operating model, and putting humans at the center of your transformation are all required to fully realize success.


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