Defence firm goes on the offense with never-ending HR cloud transformation
- Summary:
- BAE Systems is putting people at the heart of corporate strategy with HR transformation.
Projects have a beginning and an end, but we’re just learning that with a cloud-based solution, it kind of never ends.
That’s one of the many lessons learned from a five-year HR transformation program shared by Dave Nuttall, head of HR strategy and planning at global defence firm, BAE Systems.
BAE Systems carries out a hugely technical and complex array of work across the defence industry and is one of the UK’s biggest employers of engineers.
The road to HR transformation based on SAP SuccessFactors began five years ago. A combination of cost pressures, increased competition, coupled with changing customer requirements as the company moved beyond manufacturing into maintenance, put new pressures on the organization.
Alongside these market and organizational forces, internally within HR, the clock was ticking for a technology refresh, as Nuttall explains:
We had outdated HR systems, outdated technology and we were facing obsolescence issues in our payroll and core HR platform. We’d built up unnecessary and bureaucratic processes which were difficult for line managers to work with.
It was also difficult for these line managers to assess the information they needed and service costs were high compared to similar organizations. Nuttall also felt that HR wasn’t consistently meeting customer expectations across the organization, which was limiting the value the company was getting from the HR function.
Given these many different reasons for change, Nuttall points out:
It was fairly easy to write a robust business case around this. But of course it was much more difficult to implement change!
They set up an initiative, the HR Future Service program, which aimed to improve the delivery of people management. The first element of this program was to change the HR operating model.
Three-pronged model
BAE Systems had been an early adopter of HR outsourcing back at the start of the millennium and had adapted David Ulrich’s three-pronged HR model of shared services, business partners and centers of excellence. Nuttall expands:
We probably got about two or two-and-a-half of those, but of course a three-legged stool doesn’t work when you take one of the legs away. We found we had the business HR teams and the service center, but we hadn’t done enough around centers of expertise and that was the weak point in our delivery, so we set about to rectify that.
The second element of the program was to get rid of its legacy systems and the tools it had built round that which were expensive to maintain and replace them with a new cloud-based solution.
Alongside technology, Nuttall says that, the third key element of its strategy was to improve its process standardization:
We’re a fairly federated business and what had happened over time was each business had got its own variations, its own tweak on HR processes. We’d lost standardisation and we needed to get that back.
Deploying a cloud-based solution would also embed best practice in HR processes and ensure the fourth element in its program to integrate its services went smoothly.
The transformation program was split over five years. 2013 was all about planning and preparation and putting together the business case for technology investment. It also involved insourcing its service center. This was obviously a fairly major project, but important, maintains Nuttall, because:
We wanted to get under the bonnet, look at the processes and get control of the technology again for ourselves.
In year two, the focus was on designing and reworking processes and further planning before the implementation. 2015-2016 was all about deployment of SAP SuccessFactors and setting up six centers of expertise to service its 34,000+ employees across 12 businesses.
The task this year is optimization, making tweaks here and there to SAP SuccessFactors. “The final piece of the technology jigsaw” is the migration of its payroll system to Northgate, says Nuttall.
Making that all happen on such a large scale was a huge change management task. To see things through smoothly, BAE appointed 17 change managers in charge of a network of change agents. Altogether 25million pieces of data were transferred, 225 processes were standardized and over 1,600 processes changes were made. “Simple really,” jokes Nuttall.
Lessons
It’s clearly been a complex journey and many lessons have been learned along the way, including:
Change doesn’t just happen. It has to be made to happen.
Alongside careful planning and the need to “project manage it to death”, Nuttall emphasizes the importance on keeping a close eye on stakeholder expectations:
It’s was much about managing stakeholders as it was about managing the project.Everyone had a view on how to do things, so it was important to keep control and keep focused.
Self-service had been one of the key drivers behind the project, but with hindsight Nuttall believes they should have paid a bit more attention to line managers’ needs rather than what HR wanted:
There was a tendency to get a little bit too HR-centric when we designed some of the processes.
This was a broad and deep change program encompassing technology, organization, processes, data and training. Each on their own is a big area to manage, but they need to be looked at together. Otherwise, warns Nuttall:
There’s a danger you only focus on the technology and not the rest of that jigsaw.
The project covered many different business groups, so it was essential to have local teams and change agents who could explain the program to their staff in a way they would understand. In other words, communicate, communicate and engage.
It's also important to establish an approach to benefits tracking up front. Nuttall explains that that may seem quite a minor point, but points out that once you’ve let that slip for a few months, it’s difficult to get that back.
His final nugget of advice is that cloud-based projects never end. The technology is constantly changing and HR needs to be able to adapt and change with it.