10 Business Imperatives when Deploying a Global HRMS

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10 Business Imperatives when Deploying a Global HRMS

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This white paper examines 10 critical business imperatives ...

This white paper examines 10 critical business imperatives
when deploying a Global HRMS, and the
content herein is based on lessons learned from the
vantage point of both a Global HRMS solution provider
CEO, and a long-time HR Technology practitioner
and advisor operating around the globe.

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  • 1. 10 Business Imperatives When Deploying a Global HRMS 1IntroductionOrganizations around the world continue to search Not withstanding the compelling reasons to ‘gofor new ways to leverage human assets for com- global’ with an HRMS, it should also be noted thatpetitive advantage. For both strategic and opera- there are potential risks and even failure pointstional reasons, businesses with global workforces when deploying a Global HRMS. As an example,are increasingly viewing a Global HRMS (Human a Global HRMS not rooted in the organization’sResource Management System) as a foundational over-arching business strategy, and not emanatingelement of their operating model, perhaps even from a well understood talent management frame-their DNA. After all, why not rally around an orga- work, will likely under-perform or fail.nizational asset that plays a major role in achiev-ing such a wide array of business benefits? If, however, careful consideration is given to region- al, cultural and compliance differences in HR andA reliable and robust HRMS enables the stan- Talent Management practices, change manage-dardization of HR processes and best practices, ment (before, during and after the implementation),facilitates internal mobility (which drives employee issues of data privacy, global system ownershipengagement and retention), provides managers (i.e., not viewed as one region-centric), data andwith a global view of their workforce, and allows reporting standards, etc., the probability of successmore sophisticated workforce planning. The latter dramatically increases. Moreover, if the chosenis achieved by highlighting opportunities for labor HRMS supplier/partner is attuned to and preparedcost arbitrage and evaluating broader resourcing for the same challenges on behalf of their customer,options. a successful outcome is clearly within reach. This white paper examines 10 critical business im- peratives when deploying a Global HRMS, and the content herein is based on lessons learned from the vantage point of both a Global HRMS solution pro- vider CEO, and a long-time HR Technology practi- tioner and advisor operating around the globe.
  • 2. 2 10 Business Imperatives When Deploying a Global HRMS More Ground-Level Benefits of a Global HRMS As organizations such as Aggreko LLC and Hill In- • Utilize fewer payroll processing platforms ternational have discovered, there are many busi- around the globe, given the single global HR ness benefits to be derived from the roll-out of a database Global HRMS. Some of the more significant, far- reaching ones are mentioned above; e.g., process • Centralized management and control of global standardization, improved visibility into workforce compensation practices, awards and costs costs and opportunities, and promoting internal mobility. Other, more ground-level benefits to the • Locate the most qualified employee at the business include: optimal cost base, regardless of location • Quickly assess costs when planning a new HR • Complete and accurate global headcount or Talent Management initiative regardless of reporting, or “one view of the truth” the employees or countries involved • Provide other integrated management reporting • Increase confidence in HR / employee data, at the global, functional level and therefore eliminate “rogue” databases or • Global system of record for feeding all relevant spreadsheets maintained by line managers corporate systems, and for potentially transition • Enhance auditing capability for internal / ing to a Shared Services model to reduce costs exter al compliance; e.g., Sarbanes-Oxley n • Readily identify, plan and budget for employee training, succession planning and expatriate as signments • Promote the sharing of HR / Talent Manage ment ideas, innovations and best practices across regions • Enable time-saving workflows that bypass inter national process and communication issues related to managing workforce transactions
  • 3. 10 Business Imperatives When Deploying a Global HRMS 310 Business ImperativesWhen Deploying a Global HRMSI. Fully understand the business case … II. Identify the type of global organization …A Global HRMS business case typically begins While the differences between a highly decentral-with an examination of how an organization is ized and partially decentralized global organiza-dispersed, and specifically whether there are an tion are somewhat subtle, gradations of differenceadequate number of employees in multiple coun- in terms of how a global organization operates andtries or regions to justify the cost of deployment. how decisions are made can have a large bearingThat said, if the organization anticipates having on the optimal Global HRMS deployment strategy.considerable movement of jobs and/or employees These factors also influence how the system shouldbetween regions, and compiling company-wide be configured, and even whether one global data-management information typically involves manual base and software instance is optimal. As the trans-effort to consolidate data across regions (perhaps national type of global organization becomes morefrom disparate HR systems), then a Global HRMS prevalent, built around having regional shared ser-deployment can produce enough efficiencies and vice centers, we will likely still see data and pro-cost savings to at least neutralize the cost of going cess standardization / harmonization efforts, butglobal.. Obviously, other key elements of the busi- involving a more narrow range of country-specificness case revolve around whether a Global HR sys- differences.tem is critical for pursuing the organization’s talentmanagement agenda -- which might involve such III. Respect cultural differences …objectives as upgrading skill sets, linking pay with While different HR compliance reporting require-performance, doing a better job of attracting and ments around the world are fairly tangible andretaining key talent, etc. can readily be managed by competent HR opera- tions teams, cultural differences are not as easily discerned or accounted for. Research sponsored by IHRIM between August and October 2010 rein- forced this point. Survey participants from over 50 countries were asked to rank their top five challenges in going global with HR. As in IHRIM’s prior studies on go- ing global in HR, the top challenge was dealing with cultural differences. Forty five percent of re- spondents cited this as their top challenge, followed by time zone differences (41%), lack of global lead- ership, global resources, and global technology and systems (the latter all at 34% each).
  • 4. 4 10 Business Imperatives When Deploying a Global HRMS Organizations often make the mistake of becoming One last point about managing cross-cultural busi- too corporate-centric when implementing a Global ness initiatives such as Global HRMS roll-outs: HRIS vs. striving to achieve the right balance of Since all cultures have intense pride, organizations corporate and local cultures. Many of the best implementing HRMS platforms are well advised to HR practices which will serve as global standards (a) not be viewed as disproportionately imposing might actually originate within regions, as smaller the standards of one region or country -- based on entities can be more agile in defining what the busi- any set of justifications; and (b) make good use of ness needs and implementing necessary programs, “cultural conduits or agents” within each region processes, metrics, etc. that can provide guidance as to what will or will not fit within that cultural context. The next ‘imperative’ will highlight HR data man- agement and local compliance differences that re- IV. Account for local HR compliance differences flect cultural nuances, but we will note here that Since these are too numerous to mention, we will cultural insensitivities related to the data collected include a dozen here as an illustrative sampling: from employees can have a chilling effect on the adoption of a Global HR system. For example, • Germany - certain religious organizations may since Sweden and other countries have govern- be approved to levy taxes on their members ment-administered state benefits, companies in that the state then collects. HR needs to track those regions have no need to track information on religion for payroll purposes. an employee’s dependents; and it would probably be insulting to ask for it. Another example relates • Argentina - companies must have 2% to 5% of to the fact that promotability is much more sensitive their workforce with disabilities. and confidential information in a talent profile than compensation data in various parts of the world. • Australia - superannuation requires employers to pay 9% of employees’ salaries into a retirement fund. • Brazil - companies must have 2/3 of their em ployees as Brazilian-born natives. • Canada - companies must adhere to PIPEDA (Personal Information Protection & Electronic Documents Act).
  • 5. 10 Business Imperatives When Deploying a Global HRMS 5• China - companies are legally required to pay The HRMS technology implications of these local employees a 13th month bonus. compliance differences, some related to cultural nu- ances across regions, include:• France - companies are required to invest a minimum of 1% of payroll in training. France • the ability to “hide” data fields that are not rel- also doesn’t want system users to see religious evant or appropriate from a cultural sensitivity or affiliation. compliance standpoint; e.g., exempt/non-exempt codes outside the U.S.• Hong Kong - spouse identity cards must be tracked for tax reporting and payroll • the availability of an end-user configurable (or pre-configured) set of business rules, calculation• India – the Employment Exchanges Act requires routines and workflows for all regions with employ- specific notification periods on job vacancies. ees, and• Japan - 1.8% of staff must be physically or intel • A flexible data model which accommodates lectually disabled; those with grave disabilities country-specific tracking and reporting require- are counted as two disabled workers. ments• Mexico - employees can have up to eight V. Take change management seriously … different government IDs. A promising trend related to HR Technology roll- outs is the increasing emphasis being placed on• United Arab Emirates - women cannot be em change management as a critical determinant of ployed on any job that is hazardous, project success. Given the additional levels of com- arduous or physically detrimental. plexity and risk, and the longer timeframes within which complexity and risk have to be managed,HR legal compliance and culture often intersect, as Global HR systems initiatives require even moreis the case where some regions have laws which attention to change management – before, duringfavor employees (e.g., Latin America’s concept of and after the implementation cycle. The core el-“acquired rights” where employee compensation ements of any effective change management alsocannot be reduced or benefits taken away without apply in the case of a Global HRMS project; e.g.,employee consent) … while other regions’ labor extensive and targeted communications, standardregulations tend to favor employers (e.g., U.S. em- and custom training, marketing the benefits of theployees can experience a reduction in benefits or various changes, proactive risk identification andcompensation without consent). management, having a change management plan with specific milestones, etc.
  • 6. 6 10 Business Imperatives When Deploying a Global HRMS There is always resistance to change, and the resis- VI. Define local language requirements … tance is typically directly correlated with the magni- With the possibility of having employees in 60 or tude of the change. For this reason, and given the more countries, a Global HRMS must be setup to investment required to pursue any strategic global handle dozens of languages, as well as multiple di- initiative that impacts all employees, some forward- alects for some of those languages such as French, thinking organizations are now “protecting their in- Spanish and Portuguese. Other language require- vestment” by allocating as much as 25-30% of their ments also have to be accounted for including es- Global HRMS budget to change management. This tablishing the base global language for cross-coun- includes utilizing more resources with established try communications and process collaboration, the expertise in this area than was their experience in number of languages needed to support the work past years. of each Line Manager – particularly global, func- tional managers, and the extent to which all drop- Finally with respect to change management activi- downs, help text, reports, etc need to be displayed ties influencing an HR technology implementation in local or multiple languages. strategy, a realistic assessment of an organization’s ability to absorb change (i.e., how much, how fast) The fastest growing business centers of the world should be factored into whether a phased or “big are also those whose languages have distinct char- bang” implementation strategy should be utilized acters and characteristics. The Cyrillic alphabet across regions, as well as whether major process used in Eastern European languages, the Chinese re-engineering should accompany -- or follow == characters of Mandarin and the Arabic alphabet the system implementation. all represent potential challenges for Global HRMS platforms that are not appropriately equipped. VII. Decide if mobility of employees is a major factor … As previously mentioned, one of the key benefits of a Global HRMS deployment is the abil- ity to plan and budget around expatriate assign- ments. Clearly the number of employees moving from their home country for six months or more or -- on a smaller mobility scale -- taking on assignments that otherwise involve spending some time (pre- dictable or not) across multiple countries, can play a major role in determining “system and process readiness.” Currency conversions, host country al-
  • 7. 10 Business Imperatives When Deploying a Global HRMS 7lowances and more complicated tax withholding IX. Don’t under-estimate the process to arrive atand reporting are a few of the obvious consider- data standards … One rule of thumb that shouldations. Supporting more esoteric mobility require- be squarely on the radar of every manager ac-ments like showing different versions of a profile or countable for a Global HRMS roll-out is that deter-resume based on different country practices (e.g., mining what needs to be standardized on a globaldisplay employee age in most of Europe, but not in basis almost always takes more time and effort thanthe U.S.) are also part of scoping mobility-related planned. Americans – for example -- often use theirissues. Finally, repatriating employees back to their last name first on official forms, while Asians usehome country needs to also be approached with their names in reverse order but typically also usethe same process and technology rigor as expatri- a preferred nickname, Latin Americans may haveate assignments, or the organization runs the risk of four or five names or a hyphenated last name, andlosing employees who they just materially many Dutch names include a prefix. Another ex-invested in. ample relates to the ramifications of using a job title like “Managing Director” since it can actuallyVIII. Fully understand cross-border data privacy determine whether certain host-country employmentconsiderations … In terms of employee data cross- laws are applicable to the employee. In the U.S.,ing borders, the EU for example only allows em- a job title would not drive the application of certainployee data to be transferred to countries outside employment law.the EU if that country provides an adequate level ofprotection for the data. Options for guaranteeingdata protection include but are not limited to draft-ing individual contracts between the European busi-ness units and the U.S. Headquarters, certifying tothe Safe Harbor Arrangement and ensuring theorganization is providing adequate privacy protec-tion as defined by the Directive, and establishingbinding corporate rules (BCR) or internal codes ofconduct. The organization must ensure that the em-ployee data is limited to specific (business-justified)purposes, retained only as long as necessary, accu-rate and up-to-date, protected by adequate securitymeasures and that the employee must be notified ofand have access to the data.
  • 8. 8 10 Business Imperatives When Deploying a Global HRMS Final Comment The rule of thumb referenced is simply a function of Not to be lost in the discussion of business impera- the fact that multiple parties across the globe must tives surrounding a Global HRMS deployment is the agree on common terms and definitions where pos- fact that may organizations claim to have a global sible (to achieve various efficiencies), but utilize HR system, but it is the result of cobbling together regional terms when not practical – only display- country-specific HR systems and data repositories ing the terms that are appropriate for the region with their own associated configurability toolsets or country. The subject of data standards also ex- and data structures --- mostly for the purpose of tends beyond definitions, and includes data owner- global consolidated reporting. The benefits out- ship rules as well; e.g., in the case of an expatriate lined above such as enabling employee mobility or employee doing work in multiple cost centers, and capturing global efficiencies and cost advan- defining who owns the update rights to different tages will likely not be fully realized in this scenario, pieces of employee data – based on a wide range as one critical element is absent --- a common and of business considerations – is a critical task in the unified HRMS platform that brings it all together. Global HRMS initiative. X. Professional project management is make- or-break … It is universally held that professional project management makes a huge difference in complex corporate initiatives. Core elements such as executive sponsorship and involvement, man- aging to a statement of work and/or scope state- ment, maintaining a detailed project plan, using a change control process (this is vital!), having a multi-tiered status reporting framework -- and of course -- proactive risk Identification and mitigation are all absolutely essential when implementing a Global HRMS. Short-changing any one of these el- ements will make an already challenging endeavor that much more risky and challenging.
  • 9. 10 Business Imperatives When Deploying a Global HRMS 9 About the Author Shafiq Lokhandwala is a global HR industry leader and CEO of NuView Systems, Inc. Shafiq defines the NuView “vision” and his passion for solving HR issues is clearly evident to anyone who meets him. About the Author Steven Goldberg was Global Head, HR Technol- ogy and Talent Management processes for four major investment banks in the 80’s and 90’s be- fore becoming PeopleSoft’s overall head of Product Strategy for the HR Product Line. In that capacity, Steve drove product plans and priorities, and also served as global HCM spokesperson. Invited to the Human Capital Institute’s “2009 Executive Round- table of 10 Respected HR Thought Leaders”, Steve is often published in HR Executive and Workforce Management magazines, and cited in many media outlets around the world. Since 2004, he has been advising HR solution pro- viders in the U.S., Europe, Australia and India, with engagements ranging from Board Advisor appoint- ments and guiding companies in product launches and M&A activities, to providing thought leader- ship services. He holds an MBA in HR.
  • 10. 10 10 Business Imperatives When Deploying a Global HRMS About NuView Systems NuView Systems is a global provider of HR and U.S. Payroll software tools that enable business strategy through advanced technology, across the enterprise, on a worldwide basis. NuView clients use our flexible technology to achieve their HR stra- tegic vision. These organizations enjoy improved organizational effectiveness and global recognition for the strategic delivery of global HR and domestic payroll services to their employees. NuView’s web native product suite has won numer- ous awards, including - Top Ten HR Products of the Year by Human Resource Executive magazine, and a Human Resource Technology Excellence Award. NuView is ranked on the Inc. 5000 list of fastest- growing companies, as well as the Global Soft- ware 500.