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Human Capital Managementby SAP HCM

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To contribute to the growth of the Lavazza Group, maximizing

development of human capital

through common processes and advanced technology

THE MISSION

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CONTEXT

Internationalization and Globalizationorganizational vision, global information, policies, tools and common HR processes, HR community

Support Business with powerful tools and fast information

direct interaction web portal

Adaptation of human capital to the evolution of the Companyknowledge and expertise, training, development and performance

Integration of business applications

Controlling, Accounting, Payroll

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Bu

sin

es

s V

alu

e

High

Administrative Role

Supports you by accomplishing administrative processes and

offering technical support

HR Specialist

Business Partner

Agent of Change

Adopts a re-active approach delivering specialist support where requested

Supports you providing efficient HR

processes

Adopts a pro-active approach working together with you in

order to achieve business results

HR Evolution: function as a Business Partner

HighOrganizational Influence

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ERP, not “best of breed”

A multi-country, multi-lingual, multi-currency, multi-company System

Native integration: all standardized processes in one system and related to each other

Same application, same way of working (for different entities, subsidiaries, team leaders, HR, ...)

Comparable and interchangeable data

The latest technological frontier

THE TOOLHCM by SAP

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THE PHASES OF THE PROJECT

The design of the model

The implementation

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1. Application of International Best Practices (Price Waterhouse & Coopers)

2. Accordant to SAP features ... wisely declined in the reality of Lavazza Group

Definition, standardization and introduction of new tools for HR processes

“Global Template” approach

Maximum integration of information (between processes, between applications, between companies)

Flexibility to adapt to organizational updates

Planning and use of performance indicators (KPIs) on people, functions, organization

THE MODEL(Principles with which "the tool“ was designed)

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Company in scope

(all over the world)

Country Company Tot TotItalia LUIGI LAVAZZA S.P.A. 1 1Italia LEA S.R.L. 1Italia COFINCAF S.P.A. 1Italia FONDAZIONE G. E P. LAVAZZA ONLUS 1Italia FINLAV 1Italia L.C.S. S.R.L. 1Italia ERCOM S.P.A. 1Francia LAVAZZA FRANCE SAS 1 1USA LAVAZZA PREMIUM COFFEE CORP 1 1Brasile LAVAZZA DO BRASIL 1 1Austria LAVAZZA KAFFEE GMBH 1 1

Svezia INTERCOFFEE STOCKHOLM AB. 1 1UK LAVAZZA COFFEE LTD. 1 1Spagna LAVAZZA SPAGNA 1 1Spagna PANAROM S.L. 1Portogallo SOGEFRAN 1 1Germania LAVAZZA DEUTSCHLAND GMBH 1 1India FRESH & HONEST CAFE' LTD. 1 1India BARISTA COFFEE COMPANY LTD. 1

TOTALE 19 11

Each issue is global: implementation has been contextual for all thesubsidiaries of the Group and Go-Lives are simultaneous.

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THE TOOLHCM Key elements

A new way to integrate PEOPLE, PROCESS and TECHNOLOGY.

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• Master Data Management• Organizational Structure Management• Job System Management• Workforce Planning• E-Recruiting• Compensation Management• Appraisal Management

• MBO• Performance• Competencies (qualifications)

• Training• Personnel Development

• Development Plans• Career Plans• Succession Plans

1) BEST HR PROCESSES

11Modules in black will be implemented in Lavazza Group

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How to manage processes: Forms and Workflow

In Lavazza every change or insertion in the system must first be approved or guided by a workflow.

After that, updates can be recorded in the system (many of these updates, will be automatic at the end of the workflow).

The word “workflow”, in this context, stands for “process”.

This particular functionality helps each actor (HR Office, Team leader or Employee) to work on processes easily and more efficiently.

Each workflow starts from a specific FORM available on the PORTAL.

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Actors1/3

Employee

They can view personal information, org-chart, appraisals, etc..

Each person in the Lavazza group • who has a personal computer personally assigned by the company; • a personal company e-mail address;• internal active people;• no trainees or outsourced temporary workers.

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Actors2/3

Team Leader They can use the employee function to browse all data and manage HR processes for employees reporting directly to them – hierarchically (eg. Objects on loans Personal and working data, etc..).

Team Leaders can also activate Forms based on specific tasks assigned to positions (if owned), for example:

Workforce planning Recruiting activationOrganizational managementJob System ManagementCompensation Appraisal MBO Appraisal Performances Appraisal Competencies.

An employee is considered a Team Leader if he/she is responsible for at least one resource within the organizational structure.

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Actors3/3

Local HRthe office (or person) responsible for the subsidiary’s HR activities. He generally reports hierarchically to the Subsidiary’s General Manager and functionally to Central HR. We have distinguished Local HR (typically Business HR) from the Local Administrative HR (who manages administrative employment aspects)

Central HRthe office responsible for Lavazza Group’s Human Resources; divided between C&SO office (Compensation and Sviluppo Organizzativo) and GSRU office (Gestione e Sviluppo Risorse Umane). Central HR DOP corresponds to the Director of Human Resources.

CEOthe Chief Executive Officer of Lavazza Group.

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THE TOOLHCM Key elements

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AZIENDA

Direzione

CommercialeDirezione Y Direzione Rete

Direzione X

Area Nord Area Centro-SUD Filiale Milano Filiale Roma

Capo Area

Nord

Capo Area

Centro-sud

Responsabile

Filiale Milano

Addetto

Sportello

Addetto

Sportello

Responsabile

Filiale Roma

Addetto

Sportello

Venditore

prodotto A

Venditore

Prodotto B

Assitant

Venditore

Prodotto A

Direttore

Commerciale

Direttore

Rete

Assistant

Filiale Aosta

Responsabile

Filiale Aosta

Unità

organizzativa

Posizione

Persona

Job

Macro Job

2) GLOBAL ORGANIZATION AND JOB SYSTEM

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SAP HCM provides an integrated view of main Organizational concepts and Job System

SAP HCM enables you to enhance Organizational Structure and JobSystem integration.

Person Position

Organizational

Unit

CompetenceJob

Macro-Job

Covered by

Includes

Describes Requires

Organizational Structure Job System

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Job System: Macro Job and Job

A Macro Job includes all jobs sharing the same behavioralcompetencies (capabilities) profile. Each job has its own job profileincluding all required technical competencies (skills):

Macro

Job

profile

Team Assistant

Capabilities Required

Level

Accuracy 3

Flexibility 3

Teamwork 4

Achievement 3

Sales Team

Assistant

Marketing

Team

Assistant

Finance Team

Assistant

Macro-JobJob

profile

Sales Team Assistant

Skill Required

Level

Budgeting 2

Accounting 2

Cost controlling 2

English 3

Business

knowledge

3

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The Job System supports integration of all HR processes

The Job System matches the structure with its contents (processes),according to the needs of Human Capital Management processes.

Job System

Org. Mgmt. and Master Data

Qualification Mgmt.

Performance Mgmt.

Personnel Development

Recruiting Compensation Training

SAP HCM

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Contents of the Capabilities dictionary - ita

1. COMUNICAZIONE

2. NEGOZIAZIONE

3. COSTRUZIONE RAPPORTI

4. LAVORO DI GRUPPO

5. TENSIONE AL RISULTATO

6. ORIENTAMENTO AL CLIENTE

7. PIANIFICAZIONE

8. ORIENTAMENTO AL BUSINESS

9. INTEGRAZIONE

10. LEADERSHIP

11. IMPATTO E INFLUENZA

12. SVILUPPO DEGLI ALTRI

13. ANALISI

14. DECISIONALITA’

15. SINTESI

16. ACCURATEZZA

17. INNOVAZIONE

18. SPIRITO DI INIZIATIVA

19. FLESSIBILITA'

20. AUTOCONTROLLO

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Contents of the Skills dictionary - ita

ll dizionario delle Skillsindividua e descrive le conoscenze tecniche classificandole nelle seguenti categorie:

Trasversali

Generiche di Business

Vendite e Marketing

Tecniche, Ingegneria e Processi Produttivi

Tecniche – R&D

Qualità

Supply Chain

Economico Gestionali

Amministrativo Contabili

Sistemi Informativi

Risorse Umane e Organizzazione

Legali

Supporto Manageriale

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THE TOOLHCM Key elements

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A top manager gets all updated

organizational information he/ she

wants without asking his/ her secretary; he/

she gets from HR function an

organizational simulation to

understand what is needed to address a

new market

A manager compares the skills of his/her people with those

required by the position and agrees

with the HR a development plan

The portal becomes a fundamental tool for

communication, networking and

decision support for both employees and

managers

Local HR can autonomously manage HR

processes and use state of the art tools, in line with his/ her

needs

How SAP HCM can support you during daily activities: some examples

3) INFORMATION

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THE TOOLHCM Key elements

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REAL-TIME ORGANIZATIONAL INFORMATION: top managers can get allthe information related to the organizational and personnel management they need,in real time. Both for the subsidiary and for the parent company, they can createsimulations for planning organizational actions and developing Human Capital;

PROFILE MATCH-UP: qualification GAP between Position and Person:the team leader will be able to compare the technical skills (skills) and behavioralcompetencies (capabilities) of his/her employees with those required by the position;they can therefore use the HR function to request the construction of an appropriatedevelopment plan to fill in any gaps that emerge;

WEB PORTAL: Employees and Team Leaders will appreciate the functionality andeffectiveness of the web portal.

The "easy to use" as a success key: practical examples

3) PORTAL: NEW INTERACTION CHANNEL

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There are two types of “System”:

• Each process must first be approved or guided by a Workflow. It starts from a specific function available on the Team Leader or Employee Portal or on the HR Portal

• Actors in the workflows are: Employees, Team Leaders, Local (business or administrative) HR, Central HR (C&SO or SGRU), DOP, CEO

Where do you come across HCM System

HCMPortal(via web)

SAPHCM

Standard(by Backend)

• At the end of the workflow we can use Transactions to update the system (many of these updates will be automatic at the end of the workflow).

• For certain process, we don’t need to use forms or workflows, we can manage “Personnel Actions” directly in the SAP System.

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Team

Leaders

Where do you come across HCM System

Local Systems

Employees

SAP Gui

New instance –

only for HCM

ECC6

Web Browser

Internet

Explorer

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50 700 1990

Where do you come across HCM System

Team

Leaders

Employees

Estimated users

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•EmployeeME•Team LeaderMY TEAM•HRHR

The “Employee” folder is assigned toall users and that folder is the firstpage that every user will see afterlogin.

The other folders (MY TEAM andHR) depends on user access rights.

For example, if a Team Leader is also an HR, he/she will have all the 3 folders active onthe portal. The folders and the agenda have different rules depending on the folderchosen.

3 different Folder

Where do you come across HCM SystemHCM PORTAL for Employees, Team Leaders and HR users

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Where do you come across HCM System:

HCM PORTAL for Employees, Team Leaders and HR users

- Security

Role is assigned based on the type of Actor (Employee, Team Leader, Local or Central HR, Local Administrative HR, Central HR (C&SO or SGRU), DOP, CEO), Depending on that Role, a user inherits a set of FUNCTIONALITIES allowed on the system (SAP transactions or portal functionalities).

Context is assigned “ad personam” to define VISIBILITY OF INFORMATION (the right to see data only about specific Company, Subarea, SubGroup, Group, Infotype, Organizational Units, etc…):

USERS are defined in SAP HCM with a specific ROLE and a specific CONTEXT.

Folder “ME” Employee manages his own dataFolder “MY TEAM” Team Leader manages his team data (sees his direct and indirect collaborators, and manages only his direct ones)Folder “HR” HR manages the data of assigned employees (his

Company, i.e. a specific subarea, a specific set of Organizational Units, ..)

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WHAT WILL HAPPEN…?A huge cultural change for the Company

On 5th September emails will be sent to Team Leaders and Employees, communicating the link, user and password needed to access the HCM Portal, see personnel data and Team data. https://SapPortal.Lavazza.com/

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GO LIVE TIME..Explanation available: WIKI MANUAL

On the portal they will find the "USER WIKI MANUAL" which explains the Project, Workflows and the System.

https://SapPortal.Lavazza.com/help

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GO LIVE TIME.. Questions already answered

In the section “F.A.Q.” (frequently asked questions) they will find answers to many questions:

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GO LIVE TIME..Explanation available: CARTOONS (1/4)

On the portal they will find CARTOONS to explain processes:

• Organizational Structure Management and Job System Management

• Workforce planning

• Appraisal Management

• Compensation Management

• Recruiting

• Development Plan Management, Training, Career and Succession Plan

https://SapPortal.Lavazza.com/help

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GO LIVE TIME..Explanation available: CARTOONS (2/4)

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GO LIVE TIME..Explanation available: CARTOONS (3/4)

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GO LIVE TIME..Explanation available: CARTOONS (4/4)

http://win.ct2.it/temp/pwc/storia1/index2.html

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Technical and IT issues

YourLocal IT

Processes and functionality issues

YourLocal HR

Lavazza Service Desk

ServiceDesk@lavazza.it

Second level Support

Worldwide Post Go Live Support

On User WIKI

Manual