Centrica turns up the heat on HR

Profile picture for user jmilne By Janine Milne November 9, 2015
Summary:
Centrica’s HR team wants to shift focus from the transactional to the strategic.

centrica
Charlie Donaldson

What we’ve got installed at the moment is best described as a hotch potch of best-of-breed.

But that is all about to change, according to Charlie Donaldson, group head of HR operations at Centrica. The energy and services powerhouse is in the midst of implementing Workday’s cloud-based HCM, due to go live, ‘big bang’ style, in July 2016.

The HR strategy to date has been to implement best-of-breed solutions, but that has left Centrica with the problem of bolting together myriad different systems and given them a maintenance migraine. The shift now is to what Donaldson refers to as a “best-of-suite” solution.

But why Workday, particularly given that Centrica’s core ERP system in the UK is SAP?  One of the key reasons is Workday’s mobile credentials, explains Donaldson:

It felt very much like an integrated service with mobile very much in mind.

Out of its 43,000 employees (30,000 of whom are in the UK) some 15,000 to 18,000 are mobile workers. These include the legion of service engineers visiting customers every day, the mobile teams on the North Sea oil rigs, employees working in non-office sites in power stations or at fracking sites.

This means these workers “find it hard to engage with us as an organization,” observes Donaldson. It is a hassle to do simple tasks, such as get their expenses approved.

Donaldson believes Workday’s mobile-first approach is a “key enabler” for these roaming workers. Centrica will also let them access Workday using their own devices, for the first time.

Global spread

This shift to Workday is part of global transformation, begun three years ago, to transform Centrica from being a UK organization with a handful of foreign subsidiaries to a truly international company, working as one unit.

When HR began looking at the wider international environment, in 2013, it found many different systems and processes, including 12 different on-boarding processes alone in North America. It was a complex environment.

Replacing these systems with one centralized Workday solutions will make things much simpler. As Donaldson puts it:

We felt very strongly this gave us an opportunity to roll out a globally consistent solution and globally consistent interface and processes…and that’s a huge departure for us.

Donaldson notes that the move is also about more than providing consistency, but about:

Transforming the way employees engage with the HR function and how we engage with our own data.

Many employees turn to the HR team to carry out simple administration tasks for them. Donaldson not only wants them to be able to manage their personal data themselves – doing simple stuff such as updating their address, for example – but to also start using Workday and its analytics capabilities. Then they will be able to wield up-to-the-minute HR data to help them make better decisions.

The UK is generally more automated than other Centrica locations and employees are already used to self-service. But, outside the UK, HR processes are far more manual. Even though there is also self-service in North America, for example, it’s a “pretty clunky tool” notes Donaldson, and only a minority of employees actually use the system.

So, the challenges for introducing Workday differ according to location. In the US, the challenge will be building trust among employees that this new system is very different and will actually make their lives easier.

In the UK, the challenge will be persuading employees to swap from their comfort zone using the existing self-service tool and adopt a new system that will enable them to do far more than simple transactional tasks and begin to do their own analytics and reporting.

The aim is for pretty much everything to go live across all six countries in July, barring payroll, which will run separately, and benefits. The company will also evaluate Workday’s recently announced learning tool to see if that can be incorporated at a later date.

Analysing analytics

Although adopting a big-bang approach, Donaldson says they are still thinking through how to roll out analytics and whether employees will need a little time to get used to the new system first:

We’re being very cautious about putting analytics out there all at once, as it could be overwhelming.

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Despite this caution about unleashing the full power of analytics, Donaldson is excited about the contextual information analytics will provide managers. He believes it will help them see the wider implications of any individual action they take, such as the impact of giving an employee a pay rise on the rest of the team and beyond.

Looking further ahead, he hopes managers will be able to use analytics to be able to spot employees who might be a greater flight risk. Donaldson expands:

We need to change; we need to be saying at strategic level: ‘do I have the people in need to make my business successful? Do I have the right level of people at the right level? Can I improve my bottom line costs and performance in a particular area?’

Donaldson’s hope is that managers will now be able to add the people piece of the jigsaw to financial, sales and marketing data to improve their decision-making:

For me that transforms the relationship between HR and business. Too often, the business look to HR for things like: ‘can you recruit this person? Can you give me a report on average pay in the team?’ - it’s too often a transactional relationship.

Flexibility and speed are two of the key benefits Donaldson is anticipating. It’s a long, complicated and costly business to change processes currently. With Workday on board, he expects far faster response times.

Donaldson also expects the six-monthly updates to the Workday system will be a “massive potential benefit”, as it will enable Centrica to constantly have the latest technology available.

This is an opportunity to “reset the clock” and replace its complex array of systems with one global resource, which will be managed under its existing outsourcing relationship with Aon Hewitt, also its implementation partner for the Workday project.

The project has received strong support from the management team who could clearly see the strategic value of the changes. There are also significant savings to be had by ridding the HR function of multiple complex and different processes in favor of one unified system and one source of code.

It also fits in with Centrica’s vision of improving the customer experience. The focus is on making things easier for customers through technology such as smart apps to read data from meters in real time. The Workday implementation plays into this idea by making lives easier for its internal customers, improving the employee experience through better use of technology.

From a personal perspective, Donaldson is looking forward to having “real clarity” about who does what in the organization and to enabling a different relationship between business leaders and the HR function. Above all, it’s all about getting HR out of that “transactional space”, believes Donaldson:

Part of managing is managing the data of the people you lead and managing processes required for you team. I don’t see it as the role HR to insert themselves into every process.

My take

Centrica’s approach is interesting because the company is taking a big-bang approach rather than a phased implementation.

It’s also interesting because it is a great example of the way HR software is moving away from being something that merely automates and improves internal HR processes.

Instead, Centrica aims to use the Workday suite is to help all managers in the company work more effectively by giving them the real-time people data. The HCM will be a business tool for all, not just HR.

 

Disclosure - at time of writing, SAP and Workday are premier partners of diginomica