THE FUTURE OF SHARED SERVICES – HRVDEBATE REPORT
11 November 2021 Virtual
Kate Innes Associate Director – People – Vertas Group Limited
Ryan Cavanagh Head of HR Shared Service & Systems – Hovis
Joanne Regan Iles Chief People Officer – Acsensos
Mandy Hawley Enterprise Sales Director – SD Worx
Manjit Sandhu Senior People Partner – RS Components
Alix Bolton Head of People Services – Northumbrian Water Group
Rob Pelter HR Director – Firstgroup
Fatou Okafor HR Director – PDP Robert Shepherd People Services & Payroll Manager – Dunelm
Clare Gallagher HR Director – Tyrens
Managing during the pandemic and through the transition has and will continue to require all focus to be on retaining competitiveness. Planning for the future and supporting people across the organisation brings into frame the potential for shared services to take some of the stress of everyday tasks and to free people up to take on the challenges ahead.
Cloud solutions, when integrated with a central HR system, are driving a new era of efficiency, augmented by Shared Services, thanks to the opportunities provided by enhancements in automation and analytics. When the foundations are right, Shared Service Centres can operate more efficiently and focus on adding strategic value to their organisation, including talent strategies, equality, diversity, inclusion and company culture.
WHAT ARE THE KEY ISSUES WHEN CONSIDERING SHARED SERVICES AND WHAT TYPICALLY ARE THE OBSTACLES THAT HAVE TO BE OVERCOME IN ORDER TO BRING THIRD-PARTIES ONBOARD IN YOUR ORGANISATIONS?
Kate Inness: Vertas is a wholly-owned company by Suffolk County Council and when I joined, they recently divested, as they were still quite intertwined with elements such as payroll. I focused on the pitfalls that we were facing at that time. To grow the business, we required control over our people systems as we wanted to TUPE in and onboard new employees to our timescales, rather than that of a third-party. My business case focused on the strategic direction of the business and to support the growth required we need to have agile in-house HR and Payroll systems. I factored in the return on investment and costs of bringing the service in-house. This was four years ago and we are constantly improving our system as we are continuously growing. We have implemented in phases and some of this was held back with the pandemic but by February next year we will have implemented the new recruitment and onboarding modules which will streamline the recruitment process, making it more efficient and engaging for the candidate and new starter. We’re still on a journey and I don’t think that ever stops.
Clare Gallagher: We’ve brought some of those processes together already. Payroll is now in one place, but the HR system is not yet cloud-based. We’re waiting for the business to implement a new project management system and a new finance system. HR will have to follow after those processes. We have two sets of employment contracts and onboarding is still a very manual process. The reality is still that it takes hours just to complete the initial contract, as well as the onboarding information. Staff induction takes time on their first day, when they should be getting to know their teams and settling into their new environments and all of that very important introductory experience, so key to onboarding. It is something that I’m really keen to improve as we adjust to the new landscape. Essentially, it is my dream that we could onboard somebody, actually before day one, so that they are ready to go with the minimum of fuss and delay. We have issues with our benefits platform, insomuch as it can sometimes take six weeks to have people’s benefits uploaded and ready. From a customer experience point of view, it really is just not good enough. There are organisations represented here today that are bigger than my own and it will be really interesting to hear your perspectives. We have approximately 600 staff and are planning on growth in the coming years, so I need to make sure that what I put in place, is going to be fit for 2000 employees plus, so that we can make the system more efficient, as well as improve the experience.
Ryan Cavanagh: We are on that journey from an HR perspective. We’re cloudbased, but not from our payroll and time perspective, that still remains as an on premise solution. Breaking it down, the key issue is return on investment, in terms of looking at the product itself and working with the vendors to see exactly what can be achieved with such a substantial CapEx investment. Then there is the ongoing licensing cost that this brings into the business. What benefit are we going to gain from introducing that type of system? It shouldn’t just be a case of, it’s nice to have shiny piece of kit or because everyone else is doing it. The real drivers for implementation are identifying the pain points and seeing how that type of solution can work to address those. Due diligence is essential.
Alix Bolton: All water companies in the UK today are formed of much smaller water companies that have been amalgamated together and that has required significant transformation. The business had been through various huge transformations in the past ten years, but when I joined in 2020, it was HR that was about to be significantly transformed, trailblazing a programme of centralisation and so there is pressure to do well, in order to role model for the rest to follow. But looking at the big picture, the really huge challenge and opportunity is that our service is a Victorian infrastructure, which is in progress for significant modernisation and, along with the physical change, HR is responsible for the behavioural and cultural elements, preparing the organisation for the future, which is in itself is a big transformation. For example, we are introducing an HR self-service into a business that has had very traditional line management and HR frameworks. Another example is, transformation projects and capital investments usually come with business optimisation targets and so when we have looked at benefits realisation, it has always been around productivity, time and cost saving.
Mandy Hawley: Officially, transformation almost always hinges on the business case, but often it is driven by the small, operational aspects below the surface, such as legacy tech, which of course has to be changed. Integration and the centralisation of systems is a complex task, made even harder when the business case is given the greenlight before the systems and people involved are ready to put it into practice. Situations like this are what makes people believe all transformations are disruptive. It really doesn’t have to be like that, because if you prepare well and ensure people are confident, ready, trained and fully equipped, you can succeed with even the more complex and intransient changes.
Ryan Cavanagh: Trying to justify investment for a new system in isolation is always an uphill task. The focus can be too tight and so you have to look more broadly at the organisation’s upstream and downstream processes, with your own interests in the bigger picture. Then implementation becomes a more cohesive and collective objective that more readily gains traction and buy in from all concerned.
Rob Pelter: This is not a unique approach for sure, but we have been more able to gain buy-in from senior stakeholders when it is more a series of discussions, rather than hitting them with a fete de complete, self-service vision. It’s about the business case, but it’s also finding and gaining interest, informing them with experts in their field and identifying individuals who are fully engaged with the planned change. Early engagement in the project is essential and so is cohesion across the business. It’s not about status in an organisation, it’s about people who walk the talk. Also, don’t make it an HRonly project and at every opportunity, accentuate the wider objectives and look externally, bringing your third-party partners and your wider organisational customers along too. It’s about bringing people in who you think will add the best value to your project and crucially, make sure you are aligned on all of the goals.
Fatou Okafor: Agreed, stakeholder buy-in at the very beginning is vital for every initiative, across the board. With shared services, looking at areas where resources are stretched builds the case and it is here that performance reviews can prove useful in identifying people under pressure and engaging them in the plans. With outside engagement, as well as the project team, you can gain vital perspectives from endusers, who tell it like it is, and can form new ways of operating and improving internal skills and people’s world of understanding of other strategic areas within the business. We have also sent out surveys to gain feedback from our employees, which has been integral, because that feedback invariably reveals the problems and frustrations in the existing system, which is powerful testimony.
Robert Shepherd: We’re early on in our shared services journey and a key driver that springs to mind at the moment is the use of SAP On-premise for most things, across the business and our version is coming to the end of its life in the next few years. We’re now at a stage where we need to decide what we want to do system-wise that will integrate with the shared services processes. We have 12,000 UK employees and have a shared service team of 2.8 Administrators, covering a lot of the shared services-related work, hence the processes need to be as efficient as possible. We are looking at systems to help us drive forward business plans and deciding what we want to take forward as the new model. We are trying to understand what other organisations are doing in the shared services area, to draw on their maturity.
Manjit Sandhu: We are currently in the discovery phase of our transformation project and it is both an important and complex phase for us, as we operate in very different ways in different territories.
Mandy Hawley: I absolutely concur, having senior stakeholders on board is crucial, as well as champions across the business. As you move into implementation, a really key motivator is celebrating successes – however small they may be – making a big deal of them and reminding everyone of the benefits achieved, gives momentum for those to come, particularly when there are setbacks.
Alix Bolton: Setbacks are an inevitable part of transformational change impacting people. For shared services, overcoming that culture and mindset of “this isn’t my job, I’ve got enough to contend with” is a significant obstacle to overcome, as it can easily derail the process.
Kate Innes: I was fortunate enough to have implemented a cloud-based HR & Payroll system in a previous life and I drew upon that experience, but did it run smoothly? No… does it ever with systems implementations? We used the classic waterfall projects – stage gates that all system providers would want you to use – and that’s all well and good. But probably the biggest lesson that I learned, is to really plan in more time than you think you will need in the functional and nonfunctional requirements stages. This is the first critical step is to create the skeleton of the system and you need this to work for now, but also be future proof. Projects can falter if they are rushed, because you have to bring everything in with the process. We chose to do a self-managed build with a consultant supporting us, but you can, of course, opt for the system provider to build the system on your behalf. Either option is great, but it does depend on how you want it to run going forwards. We wanted to have control to support our business growth and we made the selfbuild decisions as this empowered my team to really get under the skin of the system and know how it functions. This decision will ultimately depend on your business, your resource and what you want to achieve form having the system.
Ryan Cavanagh: From the preliminary stage, you have to start with clear objectives and goals and a shared understanding of what is to be achieved in the implementation. It goes back to stakeholder buy-in again, determining that business vision alignment with all parties and advocating the efficiencies and benefits that investment, time and effort could achieve. But all-too often, people automatically jump in as soon as a project is signed off, without scoping everything out and that’s a part of the project that cannot be overlooked. HR and payroll change has to be cross-functional to ensure that all the boxes are ticked.
Joanne Regan Iles: In one memorable implementation I was involved in, it was across three different countries and one country really didn’t want it to happen. Fortunately, I was working with a really good provider and I bought some consultancy days, which paid off. We had a cross-functional team in IT, finance and business planning and the consultant deep dived beneath our existing processes and policies which garnered essential intelligence for the project and gave a more compelling vision to those that felt negatively impacted. One thing I have learned is, there’s no point sugar coating the pill, you have to be assertive otherwise people will jump on any doubts.
Clare Gallagher: We went through an HR system project review with our parent company and I can concur with what delegates have said today, that limited pre-planning and what is essentially shopping when hungry, will always have implications. When a system is chosen in the hope that it is going to be right, the law or averages will have it that it is not. It’s in early stages for them but I don’t feel it’s right for the UK and it was a huge disappointment, because my HR system is clunky and might not be cloud-based, but it’s functional. We have had to make that decision to not go with the implementation yet, but like some have said today, it’s about bringing and making what you would have learned from now on and going through with it. I have a good number of stakeholders that still are not ready for it, because of the varied ways in which HR, finance, legal and so on, are structured in the UK at the moment. A shared service is a concern for them, as it may increase their costs initially and it is really about making sure that you have partners who can drive that with you. At the moment, I’m working with our UK CEO to look at an external consultant to help us along the way, rather than the view that it’s just a benefit to the HR team. I can see the vision for the whole business, but it is very difficult when you have stakeholders that are not brought into it in the first place. Having an external consultant come in really is an advantage, because they can holistically show the benefits from an external and unbiased viewpoint.
Alix Bolton: If there’s a mindset that it is “built by HR for HR”, it will never be adopted. Of course, there’s the fundamental HR elements, but it’s the more “sexy” modules, that are identifiable to individuals that are compelling. We’ve set in the vision that we will adopt the new system and adapt ourselves to best practice, because we just can’t recreate what we currently do, so the project team are really sick of hearing me say; “adopt and adapt, adopt and adapt,” but that’s where we are heading. We have spent a lot of time and resources on functional requirements from a modular and experience level, but we haven’t brought anyone in to do process and mapping. We have seconded key people from different teams during the programme – and they have become our process experts – but most importantly, they are also really open-minded. It’s also important to be open to system implementation partners, in order to show what can be achieved and how adapting can capitalise on advantages and opportunities.
Mandy Hawley: When it comes to any new implementation, what is almost certain is that the new system will be a massive improvement on the clunky old legacy one that is being replaced. But people like what they know and so you must avoid a sort of bolt on to comfortable legacy, which ends up replicating the same mistakes, only with a slightly shinier surface. There is a real need for everyone to be pragmatic and accepting that there is no gain without pain.
Rob Pelter: Any system is not a panacea and you cannot just stand back and admire your implementation handywork, but it pays not to keep adapting to the system. I’ve worked on two sets of implementations in the past and one organisation really stuck to that principle, whereas the other wanted to try to keep modifying and adapting the system from the off and it just ended up becoming too complicated. The nearer you are to the core system, the easier it is for an upgrade to fit in, when you need to do so. A lot of these systems are pretty intuitive, but it can take people time to adapt and so the most advisable approach is to adapt to the new system, not to keep on trying to adapt the new system.
Fatou Okafor: Invariably, it is about understanding why you wanted a new system to begin with. It’s so easy to “do what we’ve always done”, but understanding what the problem statements are and what you are trying to solve is essential. It pays to be open to wide opinion, in order to stay on track, but equally it’s also very easy to be diverted when you have input from lots of different people. So that clear problem statement really helps keep the product team on track.
Robert Shepherd: Coming from a process mapping background, I believe it’s important to process map existing processes, even if they are not thought to be what is wanted for the future. It’s important to keep what you do now in mind, so as to ensure that nothing is missed in any move to newly-devised processes. Without mapping existing processes, it would be very easy to miss activity that goes on outside of the system.
Alix Bolton: We have, of course, process mapped, because we needed to map gaps and that type of thing, but current processes cannot be the guiding light for design, however nostalgic people are for the past.
Mandy Hawley: Any system will be around for a long time, so it pays to speak to someone who has had that system for a couple of years and, most importantly, find out how adaptable it is. Businesses merge and acquire and they change operations and processes and of course something unpredictable like a pandemic can come along. Systems need to be able to grow and move with the business and it’s easy to be fixated with what everyone needs today, when some implementations take a year and those needs may well have changed. That is why future-proofing is such a critical part of the plan.
Manjit Sandhu: It’s important with any new technology rollout to plan and test. UAT is a critical step and it also might be a consideration to stagger the launch, considering the narrowing distance between maturity and adoption of technology in these markets.
Kate Innes: It’s best-laid plans and all that… but in reality, sometimes it’s not all plain sailing. It’s been said already, but clarity of vision is crucial, as is an understanding of the minimum go-live requirements. We phased implementation – starting with core HR and Payroll – and our minimum criteria for going live was, “can we pay people?” and “will the pay be right?” When we carried out our first parallel run, we found that actually, because we were parallel running against a third-party provided and managed system, that the data was not accurate and we also discovered obscure anomalies and indifferent payments. The result was, we couldn’t parallel run and that was a bit of a nerve-racking situation, because we could not reconcile to a comfortable ten percent variation. We gathered in the project room and ended up having to do payslip comparisons, line by line. It was a big wakeup call and a curveball moment, but it sharpened us up to what could happen when we eventually went live with nothing to fall back on. When this happens, it’s about having that calm, collected “breathe” moment and asking, how can we deal with it, move this forward and hit our minimum criteria for going live? Nothing is ever perfect when you go live, you are always going to have teething problems to deal with… it’s the nature of the beast.
Joanne Regan Iles: In my experience, don’t be afraid to delay things slightly – it’s best to wait and be sure everything is ready and in place – because the worst thing that can ever happen if you go live, is the worst thing of all… nobody gets paid! Everyone will then remember the “new system” for all the wrong reasons.
Clare Gallagher: As with any change, feedback is essential, but what I have found during these past two years is that, when people are working remotely, trying to obtain employee feedback can sometimes be quite difficult. One of the businesses I look after has very much a herd culture and largely were based in one office. So working from home was a massive change for them, because of course, it wasn’t something they were used to and IT was a challenge at first. So trying to bring them back into the office now to have that discussion is really important for us when we’re planning this stage, because they still haven’t adapted very well to remote working and their productivity has been affected. Part of this process of change for us is to actually help with that, make things more automated for them. DocuSign was a godsend for us during lockdown as an HR team, because it just wasn’t anything they were used to. If you needed to speak to somebody, you went and found them, you didn’t pick the phone up, you didn’t email them and you would never use something like Teams. It’s been a really big change for them and in some sense, it’s because of the issues they had around remote working. Now the future challenge is trying to find a hybrid balance on top of pushing through a big change for them, in terms of how they book holidays, team resource planning and so on. I’m very conscious that we do need to tread very carefully and, as a few delegates have said today, it’s important to spend more time on the groundwork, in order to win that all-important buy-in. Again, the hybrid working framework is still very much in development. We have new challenges with people coming into the office but spending their day on Teams and we have a lot of work around helping the staff find this balance, before we throw new systems at them. It’s definitely going to have an impact.
Alix Bolton: We’re building in contingency at Northumbrian Water – being realistic that it’s not an ideal world and things don’t always go smoothly – we’re keeping our project resource for longer than “go live”, so that we have some considerable overlap. Now, that obviously costs me more in CapEx – and that’s a real hard sell – but it’s so advisable. This is the biggest CapEx investment that HR has been through in many years, so the pressure was on and, as we are customer bill-driven, we can’t drive any more cost out of the business than has been assigned. One other thought, in the tender process, I actually asked our final stage supplier to present a better proposal in terms of training and knowledge transfer, because we have a huge project team and we need to embed a lot of that new system and new process knowledge. Next year is the most important one for us, because that’s going to be payroll and so we have a real emphasis on training and knowledge transfer and we’ve brought a test partner in as well as a QA partner, in addition to our main contractor. But again, it’s about being realistic that things might not go as planned.
Fatou Okafor: When we were about to relaunch our new payroll platform, we carried out a test where everyone was paid a penny – just to make sure that everyone receives it – and that way you can capture any issues – it’s a trial run which provides some reassurance, because when the basic mechanism looks sound, you can build from there with the individual configurations such as, sick pay and how maternity works.
Robert Shepherd: Recognising the importance of quality and accuracy in our new systems and processes, we’re now scoping out our current processes to make sure that we don’t miss anything. Likewise, we recently brought in a QA role that is going to be dedicated to looking at the quality control of new processes.
Mandy Hawley: From a supplier perspective, I really would encourage you to push your suppliers hard even before you select them and definitely throughout the relationship. We’ve spoken a good deal about what happens “if” things go wrong, it’s not if, it’s when and if it doesn’t go wrong during the implementation, it will some time during the relationship. Alix exampled this, as she went back to her supplier to rejig their training element. It pays to be assertive and unambiguous about what you’re expecting from a supplier. Key too is to have a really clear escalation and governance process, both internally and with your supplier and keep that in place, even when things are going well.
Kate Innes: In a growing organisation – we went from having 1,800 employees at the point of going live, to now 4,000 – so this was an example of where an element of your business change impacts on implementation. The way that we’ve measured it is actually the number of people that we physically have on our payroll and our HR teams hasn’t significantly grown in line with that increase in headcount. We have a very lean HR and payroll team and, had we not had a system that was as automated as it is, we probably would have doubled that headcount in our payroll team. I do think it depends on how you want to measure it and this may change or evolve as you phase in other aspects of the system. You can look at things like KPIs and processing KPIs – that might be something you want to set out in your project – but you need to have creative thought too and visualise what great could look like.
Joanne Regan Iles: Agreed, having what success is going to look like gets you through hard times on a project. It’s also about looking at the colleague experience – we’ve discussed surveys today in this debate – and we continually carry out surveys. You have to be mindful not to overload people, but feedback on their experience should be on the agenda at every board meeting. Also, you need the mindset that there’s never a final destination – we didn’t just go live and then stop – we carried on with the project as a WIP.
Alix Bolton: A mix of that qualitative and quantitative data is absolutely essential. We’re in the tech sector – high growth software development, specifically for online retail – and that digital customer experience guided us in our HR systems transformation, particularly the importance of marketing and feedback on user service. We considered; how many clicks does it take to find the service and the functionality and intuitiveness of selfservice.
Kate Innes: You have to make sure that your teams working in the shared services function are not slipping backwards. When we brought in the HR and payroll system into our company, the tech was an area where we would often experience pushback from colleagues, who were hesitant about updating personal details themselves. That can be a knockback to the team trying to roll the new system out and it requires pragmatism and stoicism, because it’s tough and tiring for the support team. numbers. It’s been a tough process, but we’re now slowly reaping the benefits of it. Again, it’s one of those points where the business is realising the value that HR can offer.
Alix Bolton: I concur, the dirty data has been surprising, but we’re not quite at the stage of live dashboards. As a business, we do use tools such as, Microsoft BI and we’ve a fantastic central business intelligence and analytics function in our IS team. But we’re looking forward to the system achieving heavy lifting and putting intelligence into managers’ hands. I’ve been tasked by our group HR Director to research into how we can transform to be insights driven. But to achieve that, the dashboards have to be self-serve optimised and as “live” as possible.
Manjit Sandhu: One of our key strategic priorities is to ensure data and insights are driving and contributing to any decisions we make. That will enable us to have better and richer conversations on topics like; succession, talent and global mobility.
Robert Shepherd: We have SAP at the moment – which is an excellent system – but it was never implemented in the right way, so some of the functionality was never really used initially. What we’re trying to do is learn from that mistake in this project, to make sure that we do switch on functionality and use it properly. Because we’ve not used the system to its fullest extent, we’ve never been able to really gain any meaningful people data out of it. Any analysis of people data goes on outside of SAP and with any new or updated system, MI requirement should be of paramount importance.
Mandy Hawley: Speaking of dirty data is a risk that should not be taken lightly, because it’s data quality and reliability that builds trust and drives implementation and once the insight comes forward, the trust builds. Speaking of predictive analytics it’s nothing new, of course – we rolled it out about eight years ago – which was possibly too soon for some people, because skillsets in HR weren’t ready for that type of data. It informed that, preliminary and continued training is important and although it seems costly, delivering people from weary hours amalgamating everything into one spreadsheet, to having the data at their fingertips – confident and capable of real-time reporting – is worth it. It is the answer to freeing people up from the drudgery of compiling reports in a grueling manual and binary processes.
Kate Innes: Probably the biggest thing that I have found is around resourcing the project up. What is often underestimated – largely by those outside of the function – is the complexities of operating payroll and HR shared services. The unavoidable reality is, the day job has to continue alongside the project implementation and it is so important to ensure you resource the project and the day-to-day effectively. I would recommend that temporary resource is best placed on the day job, as your permanent team must be fully invested in the project, as this is what they will be working on going forwards and to have their ownership on that is integral to the development of the system and the effectiveness it will have.
Clare Gallagher: I agree and use external help where you can, especially when you are personally embedded in the process that needs to change. I find it quite easy to step outside the box and see how things could be different because I haven’t worked for the organisation for 15-to-20 years, as some of my colleagues have. I think sometimes the external influence can be really powerful for these kinds of projects, because people do listen when they know somebody isn’t embedded in the process.
Alix Bolton: It’s a complex project and so it is important not to overcomplicate things further. In terms of the vision, it’s engage, engage, engage and, as the cliché goes “use the talents in the room”. I’m not a systems architect and so these tech skilled people are essential. Also, have the resources lined up right ahead of the CapEx proposal first and, as has been said and I concur, HR has a real reputation for overcomplicating things, so make sure it doesn’t end up being called “HR’s new system”.
Mandy Hawley: I think what is really important, is to gain as many views as you can. Challenge your thinking and challenge what everyone thinks is right and is never scrutinised. You’re probably coming from a point far behind where you would like to be, so challenge things for the future of that relationship. It really pays to learn from other people’s different experiences, but be mindful that every industry, business and HR team’s level of maturity and capability is different. Use those shared experiences to inform on finding the right implementation partner, take time to nominate the right team, challenge your thinking and question everything and, above all, be brave.
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