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!
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