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Case for the Less-Is-More HR Shared Services Model

March 2017

Today’s Presenter

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• 20+ years in HR shared services as consultant, researcher and practitioner

• Founder of HR Shared Services Network on Linkedin with approx. 11,000 members

• Publisher of extensive database of HR shared services practices at www.hrssn.net

• Consultant, author and speaker on various aspects of HR service delivery and shared services

Jim Scully

President HR Shared Services Institute

The “Hockey Stick” Curve of Technological Change

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Technological change occurs at an accelerating pace, which may be depicted by a “hockey stick” curve.

Ogburn’s Theory (1922)

• Technology is the primary driver of social change

• Technological progress go through phases:

Invention ➤ Diffusion ➤ Adjustment

Diffusion is the socialization of new inventions which leads to convergence of thought and thus new inventions

“Cultural lag” is the period during which culture struggles to adjust to new technologies

Corollary: The internet and cloud computing have a dramatic accelerating effect on the diffusion process

In The Beginning

Alfred Sloan

The Evolution of Shared Services

Pre-Digital Model

Cloud-BasedModel

Mainframe Model

Client-Server Model

1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s

Telephone (proliferation)

Long Distance Calling

Carbon Paper

Computer Networking

Client-Server Computing

Email/Internet

Cloud Computing

Mobile Apps

Social Media

Personal Computer

Packaged Software

Mainframe Computing

Magnetic Data Storage

Real-Time Mainframe (a.k.a. “green screens”)

The Big Question:

What’s Next?

Evolutionary Perspective

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WasteforLess

Gen1

LessWaste

Gen2

LessGen3

Gen 3 Paradigm Shift

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From ToScale Economies Process (flow) Economies

Fishing Teaching to Fish

Physical Virtual

Processing Skills Solving Skills

Transactions Outcomes

Waste For Less Business Case

• Labor rate-oriented

• Transaction/SLA -Focused

• SOP/KB/CRM-dependent

• Organizing Principle: Perform different types of work at the lowest cost, most skill appropriate level

• Economic imperative: Economies of scale

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Rate x Time = Cost

Less Waste Business Case

• Process oriented

• Outcome-focused (holistic)

• Knowledge/skill-dependent

• Organizing Principle: Deliver outcomes with minimal waste

• Economic imperative: economies of flow

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Rate x Time = Cost

Less Business Case

• Leverage consumer-grade cloud HRMS (e.g., Workday) and other self-service enablers

• Don’t improve the process, obliterate it

• Organizing Principle: Teach to fish

• Economic imperative: Economies of demand

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Rate x Time = Cost

Eli Goldratt on Achieving Technology ROI

Achieving the ROI promise requires answering four sequential questions:

1. What are the capabilities of the new technology?

2. What business limitations do these capabilities diminish?

3. What rules1 exist today to address these limitations?

4. What new rules should be adopted to leverage the new technological capabilities?

1Rules can be policies, defined procedures, defined roles, controls, authorizations, conventions, etc.

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The Four Questions and Gen 3 Shared Services

1) What are the capabilities of the Gen 3 shared services model?

• Broad and deep self-service capabilities

• Ability to create custom self-service transactions with configurable workflow and APIs

• Integrated transactions with configurable workflows

• Virtual “artificial intelligence” assistance

• Process robotics

• Mobile access to information and transactions

• Vast market of inexpensive SaaS applications

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The Four Questions and Gen 3 Shared Services

2) What business limitations can these capabilities diminish?

• Expert processors required to administer routine transactions

• Employees and managers often require hand holding from local HR or HRSS contact center

• Manual processes required where self-service option is not available

• HR must review transactions to ensure compliance and correctness

• Employees and managers must have access to a computer to access online information and transactions

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The Four Questions and Gen 3 Shared Services

3) What rules exist today to address these limitations?

• Multi-tiered service delivery roles

• SLAs to manage manual performance levels

• HR approval requirements

• Centrally located HRSS staff

• Alternatives to self-service provided

• Kiosks in non-office work environments

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The Four Questions and Gen 3 Shared Services

4) What new rules should be adopted to leverage the new technological capabilities?

• Self service as the service

• Comprehensive, consumer-grade portal and self-service

• Smart phone as kiosk/scanner/fax machine

• HRSS staff located wherever it makes sense

• Gen 2’s tier 2 = Gen 3’s tier 1

• Fishing instructors in HRSS

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Other Gen 3 Business Case Rules

• Account for employee time and effort

• Focus on cost per valued outcome vs. transaction

• Compare future state A vs future state B, C, etc., not future state vs. current state

• Keep investment horizon short

• Virtual centralization vs. physical centralization

• See beyond hard-dollar benefits

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Questions?

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404-861-9313

Jim.scully@hrssi.net

LinkedIn groups:

HR Shared Services Network (open)

HR Shared Services Practitioners (invitation-only)

Jim Scully

President HR Shared Services Institute