Leadership Map for Leadership Map for Leadership Map for Leadership Map for High performing High performing High performing High performing CompaniesCompaniesCompaniesCompanies

Sudhakar Rao

Director, SAP India

SAP ERP HCM – Thoroughly Proven

SAP – World Market Leader in Enterprise Software

� 31 years business experience

� 25 industry solutions

� Worldwide ecosystem

SAP HCMSAP HCM

� #1 Market Leader

� 20 year commitment to HCM

� Over 20,000 HR customers worldwide

� Over 500+ India HR custoemrs

� Over 54 Million Employees supported with SAP HR

� Over 11 million ESS users

© SAP 2007

Today - Organization challenges

� Global economy (Monkey on the back – CHINA)

� Economic Downturn, Cash Flow

� Increasing focus on innovation and growth

� Quality combined with mass production

� Faster ROI demands (high quality assets)

� Drive performance and improve efficiency

� Higher costs of attraction and retention

� A unique set of business challenges requires a new

way of managing the workforce and its talent

Human Capital Challenges for the future

1. Succession Planning

2. Recruiting and Selecting Talented Employees (HIPO/HIPE – Top 2-3%)

3. Engaging and Retaining Talented Employees

4. Providing Leaders with Skills to be Successful

5. Rising benefits Costs

6. Creating/Maintaining a Performance-based Culture

Based on SHRM 2007 study of global HR executives, priorities are listed below:

*Source: McKinsey “Making Talent a Strategic Priority”, Jan’2008

HighLow

Are You Ready to Move-the-Needle?

0.8%ABX XYZEmployee1 Cost %

of Revenue19.1%

12.2%

1.52 ABCXYZOpr. Income per

Employee (Rs. Cr)0.09

0.50

Production per 153.79

What-if analysis aligned with growth strategy(Simulation of current and future strategy)

Company

• This conversation leads to focus on core competency improvement areas.

• People Strategy

16.3%BAD ABCProd. per Emp.

Growth Y-o-Y, FY – 08-7.3%

13.5%

4,191.88 XYZProduction per

Employee (tons)

153.79

ABX 100.93

Significant Opportunity for Further Value Addition Exists

Strategic/ Decision Support “Innovate”

Drive Effectiveness

Function Potential for Value Creation Through IT/Best Practices

Enablement

� HR Strategy and Leadership

- M&A Execution- Talent Management- Consolidated IT Platform- Global Shared Services/ Workflows

“Innovate”

Expertise Based Activities

“Grow Business”

Transactional Activities

“Maintain Status-Quo”

Drive Efficiency

� Compensation/ Benefits Planning

� Performance Management

� Workforce Planning

� Recruitment and Staffing

� Training and Development

� Compensation/ Benefits Administration

� Personnel Data Management

� Payroll Administration

� Time and Attendance Recording

� Self-services and Work-flows

High Potential of Value Creation through IT Sufficient Potential of Value Creation through IT High IT Maturity – Value Creation Potential in Selected Areas

How SAP is supporting?

Automate

Manpower Planning

Create Skills Inventory

Improve

Training/ Development

Note 1 - Source: Based on SAP interviews with Tata Steel HR function owners and key process leads

Automate

Transactions

Better Reporting/

Analytics

Integrated HR IT

Landscape

Consistent

Performance

Management

Example: Create Skills Inventory

Map skills inventory for each position and employee

Assign training programs and development plan using Talent Review.

Monitor progress

Insight into global workforce = ability to tap into employee potential = leadership

continuity and alignment with key business objectives

Visibility of key talent demand and supply needs

Global internal talent pool

Define and assign job-rotations within /

outside domains using training

module. Identify mentors in system

Example: End-to-End Talent Management

Succession Planning Employee DevelopmentEmployee Performance

Management

CLO, LoB Mgr & EmployeesLine of Business ManagerLine of Business Manager

Head of HR

Connect Employee Performance Management, Succession Planning and Employee Management to maximize workforce potential.

LOB

LOB

HR

HR or Training

Book Training

Training Administrator

Employees

Line Manager

HR Specialist/HR Business Partner

Conduct Appraisal Feedback Discussion

Enter Self-

Assessment

Maintain Talent Profiles

Identify Potential

Successors

Create Talent Review Meeting

Identify Key Position

Conduct Talent Review

Meeting

Identify Potential

Successors

Participate in

classroom &

e-learning

training

Appraise

Performance

& Assess EE’s

Potential

Review Objectives

and Achievements

Conduct Appraisal Feedback Discussion

Recommend Trainings

Approve Booking Activities

Monitor learning progress

Calibrate Appraisals

Start Central Appraisal Process

Define Training Opportunities

for Top

Performers

Integrate External Training

Create, Manage & Publish

Training Catalog and Development

Planning

Implications of Higher Investment in Strategic HR

Strategy/

Leadership

16% 10%

- 29%HR Cost as % Sales

Operating Income/

Employee + 74%

Cross Industry Analysis

Transactional

Business Support

Talent Management/

Expertise Based

Support

36%

48%

30%

60%

Average Company Top Performer

Source: ASUG/ SAP benchmarking

How Do Companies with Leading HR Practices Differentiate Themselves?

Leading companies assess training effectiveness in line with overall corporate goals and link compensation planning to performance management

Best Practice: Automated training effectiveness assessment by correlating corporate KPIs to training

results

24

44

Tra

inin

g H

ours

per

Em

plo

yee

Peer Group World Class

83%+

Evaluation of training needs during

performance appraisal helps increase training

effectiveness by 4 times

Automated compensation

adjustments based on performance ratings lead to 35% lower employee cost overhead and 85%

lower churn rate

Note 1 - Source: Based on statistical analysis of best practice adoption levels and KPI performance for over than 250 participants in the SAP ASUG (America SAP User Group) Human Capital Management benchmarking initiative. Participants range across diverse industry verticals with varying employee numbers

Best Practice: Automated compensation plan impact analysis and reporting

34%

15%

Em

plo

yee C

ost

(% o

f O

p. E

x)

Peer Group World Class

56%-

Legend:Avg. Company

World-class/ Leading Company

Peer Group World Class

How Do Companies with Leading HR Practices Differentiate Themselves?

Best Practice: Web-based tool to record time & attendance with automated reporting

61

29

Avg

. A

dm

in. C

osts

for

T&

E R

ecord

ing p

er

Em

plo

yee (

US

$)

Peer Group World Class

53%-

Higher employee engagement levels leads to more productivity (revenue earned per employee)

0.32

0.61

Reve

nue p

er

Em

plo

yee

(US

$ m

illio

n)

Low Engagement

High Engagement

91%-

Note 1 - Source: Based on statistical analysis of best practice adoption levels and KPI performance for over than 250 participants in the SAP ASUG (America SAP User Group) Human Capital Management benchmarking initiative. Participants range across diverse industry verticals with varying employee numbers

Legend:Avg. Company

World-class/ Leading Company

Best Practice: Balance Score-card based employee goal alignment with org. strategy

14%

9%

Turn

-ove

r R

ate

(%

)

Peer Group World Class

36%-Organizations that

support personalized and effective learning

experience a 65%reduction in turnover rate

Engagement Engagement

Shared Services Drives Value

1%

8%

15%

23%

5%

14%

32%

0.5%

Net Cost Savings % Effectiveness Improvement %

STA

GE

S O

F M

AT

UR

ITY

No Shared Service Emerging Established Leaders

Fragmented

Varying Processes

Centralized

Mostly Standard Processes

Varying Service Levels

Automated Transactions

Consistent Service Levels

Efficiency Metrics

Source: ASUG/SAP 2006 Shared Services Study

TY

PIC

AL

PR

OF

ILE

Highly Automated

Highly Integrated

System Consolidation

Comprehensive Metrics

Governance

SAP is Investing in Driving Next-Generation HCM Capabilities

Focus Area Business Value

1111

2222

Business ReasonModeling and simulation

of workforce needs

The right people in the right roles when needed

Closed loop execution on people strategy

Ensuring future leaders are identified, developed, and

ready

Workforce Planning and

Analytics

Talent Management

3333

4444

Efficient delivery of HR services

Optimizing workforce utilization

Workforce efficiency and productivity

Increased quality of HR Services at lower TCO

Service Delivery

Scheduling and Deployment

5555 Enabling structured and unstructured knowledge sharing

A more connected and educated workforce

Collaboration & Learning

Thank you!

© SAP Summit 08 / Page 15