Alcatel-Lucent goes cloud, cuts HR costs 30% in 2 years

Phil Wainewright Profile picture for user pwainewright November 9, 2015
Alcatel-Lucent cuts HR costs 30 percent with a transformative cloud HR system that uses self-service to make line managers the contact point for HR services

Laurent Geoffroy, VP of HR, Alcatel-Lucent
Laurent Geoffroy, Alcatel-Lucent

In 2013, the HR team at network equipment giant Alcatel-Lucent was handed a tough challenge: to decrease costs by 30 percent within a two year timeframe. Their response was to take the opportunity to transform the way HR is delivered across the company, as Laurent Geoffroy, VP HR & head of HR transformation explained recently at the HR Tech Congess in Paris.

We decided to come from this cost reduction strategy to a modernization story. We decided to transform HR.

The transformation revolved around taking previously centralized HR processes and using technology to deliver these services through line managers, via employee and manager self-service. Managers would have authority to make decisions and the ability to manage workflow from anywhere in the world. The cloud-based technology, replacing 60 different existing HR systems, would also ensure global consistency across a workforce of fifty thousand in a hundred countries. Geoffroy said:

The idea we had is that the line managers of the company are the first HR in the company.

[We wanted] a direct touch between every employee and their manager for service delivery.

Adapting to digital

The motivation was to be able to offer employees an HR experience that was more like the digital services they encounter in other aspects of their lives, he explained.

[Everyone] is using this digital, self-service technology in their daily life, outside of the office. The trouble for the enterprise is to catch up with this digital world that the people have outside the work.

The enterprise has to adapt very quickly, because it's a competitive advantage. I cannot go and chase for talent if I'm unable to propose to them a way to manage their daily, working live in the way that suits their needs and the way they are also managing their own home life.

For me it was quite obvious, for a company in addition in high tech like Alcatel-Lucent, that we have to fulfil this digital gap as quick as possible. For me, it is not a revolution, it's almost obvious to move the needle towards this digital world for HR.

Two years later, the core HRIS, SAP SuccessFactors Employee Central, has been deployed in 62 countries, including key territories such as France, Germany, Canada and the US. Three quarters of Alcatel-Lucent's global staff are using it, and the key objectives of cost reduction and HR transformation have been achieved.

One objective was to reduce the cost of our HR function worldwide by 30 percent — not at the end of the two years, but within the two years. That is achieved.

The second thing we achieved is that the adoption by the manager and the employee is really good — thanks to the technology, because it's already intuitive, it's easy to understand.

Even myself, I was able to change my business title, day one of Employee Central. The workflow went to my boss, it was approved. No HR intervention there, because it was through the process and my boss had all the authority to change my business title. If I were in the Netherlands, to change the business title, I need to change the contract, so the workflow would have been slightly different, to include a legal review. All that works, day one.

Outsourcing HR functions

One of the toughest parts of the transformation was a decision not only to redefine the role of HR within each process but also to outsource every aspect that could be done remotely. That too was properly managed, Geoffroy told me.

It was a really tough thing for the HR community, because we outsourced around fifty percent of our headcount. So it's tough, because it's your colleagues, right and left, went off to the vendor. To date it has been properly managed, with the respect of those people, it has been achieved in due time.

So where we are very proud is that the overall pieces of the program of the roadmap, including the social restructuring, all that has been properly managed, all across the two years. That doesn't mean I didn't change my plan practically, but we stick very truly during two years to our principles. It's not so easy in a multinational when you have this kind of project.

The decision to outsource — like the decision to go cloud — was necessary to ensure the HR capabilities keep pace with what the business needs, he explained.

I didn't do outsourcing just for the cost labor arbitration. I do outsourcing because I consider that some partners, this is their core business. They are able in the future to invest in that domain, which I will not be able to invest in a system in that way within Alcatel-Lucent.

It's like in the overall high-tech industry. I'm doing R&D with some university partners or with some labs, which are not necessarily Alcatel-Lucent. But we benefit from their work, they benefit from us, and we create an eco-environment. It's the same for me in HR.

Why I went cloud is exactly for the same reasons. It's because I don't want to redevelop an on-premise system each time a law is changing somewhere in the world. It's not my business. I'm not in the technology HR business. My colleagues from SAP are in that business. With the cloud, I have the quarterly release, so I don't mind any more. I choose a long-term partner and they provide to me all the relevant technology innovation.

Change management

Change management has been a crucial element in the success of the project. Geoffroy was mindful of the pitfalls when asking employees and managers to adopt a self-service model.

The only difficulty is to properly present that to them, because if not, they [say] 'What are you are doing in HR? You ask me to do the job that you are paid for.'

But if we are able to positively present, just what I've explained, that it's simply catching up with their daily, private life and that they can manage their HR activities when they want, wherever they want — it is always the same approach and they can manage that on their computer and the like — it's easy to convince them to go and to manage that step. It's some pyschological barriers, but it's relatively easy to move the needle there.

It helped that the work started early in France, where Alcatel-Lucent has its headquarters.

As soon as your CEO, COO, CFO, CHRO are giving the example and people see around the world — because it's like a marketing virus — that they are using Employee Central because they have the ability to change their bank account by themselves and they don't need anymore to bother HR people for these simple things — the buzz, it's very positive.

My take

This is a huge transformation project and a remarkable achievement to have successfully delivered it within two years. That timescale demonstrates not only the adaptability and speed of the cloud model, but also a tremendous effort by Geoffroy's team and their vendor colleagues to negotiate all of the various organizational and cultural hurdles at such a rapid pace.

Image credits: Business man stepping on clouds towards sun outline © red150770 -

Disclosure: SAP is a diginomica premier partner and arranged this interview during HR Tech Congress in Paris.

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