A Case in point...

"...the process of aligning and standardising all human resource processes – from staffing, training and development, performance management, talent management, reward and recognition, through to e-learning – will culminate in an integrated human resource systems environment early in 2009. This will give managers immediate access to a ‘single view’ of all essential employee information, and improved contractor management.”

The above-mentioned is a statement in the annual report of one of the clients that we have worked with over a period of 3 years. For me, this statement reflects the end-result of an exciting journey with this client company - it is a confirmation of the objectives that we had agreed to, to align all components or layers of their Human Capital Architecture.

It was not an easy journey. Often finding ourselves caught between their IT and the HR teams, we had to work hard to guide both teams from pointing fingers at each other for the weak position HR was finding itself in the company. This after a major HR transformation project on the back of a company-wide Business Improvement Project that saw a new HR service delivery model and channels - following the Ulrich thinking  - was put into operation. 

The company also boasted a new HR Shared Services Centre (with Finance), 4 Centres of Expertise (CoE's), and Business Partner teams or HR Operations Teams at the operating companies (the ratio was a team of 4 for every 1,000 employees).

The above-mentioned HR transformation was comprehensive as a number of strategically aligned key performance areas, each with a set of key performance indicators and specific metrics, were designed. Business was made intimately aware of, and participated in consultation sessions on the HR transformation plans. Business and HR also negotiated and discussed specific Service Level Commitments (SLC) for each of the new service delivery structures - the transactional services from the Shared Services Centre, the strategic, research, policy and consulting services from the Centres of Expertise (CoE's), as well as the strategic business partner services and consulting services from the on-site HR operations teams.

The HR teams were redeployed and appointed into their various new roles with specific performance management targets, supported by new skills training and change management assistance. 

With regard to HR information systems, the IS function (IT) has initiated a number of SAP HR modular implementations since 1999, and a number of other type of information systems were also in operation.

The first sign that all was not as well as thought to be, came in the form of a serious and persistent lack of managment information that the HR organisation needed to operate according to its new mandate and service delivery structures. The HR customer groups and HR teams themselves did not enjoy access to validated HR information that could be trusted to reflect the current reality in any of the HR process areas. Endless discussions were held with the IS (IT) function to solve this HR management information crisis, and as the Business Improvement Programme saw the centralisation of Business Analysts back to the Head Office, the local operations did not have any capactity left to derive meaningful management information from any of the HR systems avaialable.

When we introduced the HR and IS teams to the concept of Human Capital Architecture and its underlying thinking, it was immediately embraced  by both parties as a "safe" initiative that could address most issues pertaining to the lack of valid HR management information. A Human Capital Architecture Assessment across the extended business followed, the results of which confirmed the lack of close alignment and deep integration between the layers of their HC Architecture, such as between the HR policies, business rules, system rules and the SAP HCM system.

Furthermore, it was discovered that there were poorly designed HR business processes and that those processes were not integrated with the SAP HCM system. On the application layer, it was discovered that the company had had a number of disparate systems running for HR, some were custom developed to support activities such as performance appraisal, etc. Furthermore it became evident that SAP was not their single source of data for the HR organisation, that there were a lot of duplicate data, and that there were evidence of hurtful practices and behaviours around using the SAP HR system.

The results of the assessment confirmed that all the good strategic and structural work that the company invested into with regard to the transformation and re-positioning of the HR organisation, was seriously undermined by the lack of integration in their current Human Capital Architecture. The customer groups of HR were adamant that HR service delivery was a dissappointment, mainly as a result of the acute lack of the consistency and reliability of HR data and information.

Over a period of 3 financial years, we worked with the HR teams at this client company to systematically change all the issues raised by the audit and to assist the client in achieving the end result of providing the HR customer groups with an integrated view and information of integrity across the People Value Chain.

Flexibility, innovation and the elusive HR mandate

There is much thinking and debate going on in the HR profession today as to what would constitute the true mandate of HR in business.

There are a number of schools of thought on this subject and consensus on the matter seems to be increasingly elusive.

The attention given to Talent Management recently seems to suggest that it is viewed as very important to the contribution of HR to the success of business today.

The HR Business Partner concept has also received a lot of attention as the practical manifestation of the so-called business-oriented HR mandate. HR as business partner is a derivative of the transformation of the HR function that demonstrates an "introspective" response of the profession to become more attuned to the needs of the business.

Returning to context to discover some guiding principles in the matter, in the information age the global economy is still capitalist of nature, and in the capitalist tradition businesses compete with each other to ensure that they get their fair share of the market for the ultimate purpose of profit making. Castells* indicates that the cross-over to capitalism by the majority of economies is/was done consciously and became a specific objective for most economies in the world as the global economy became well, global.

For three decades after World War 2, most market economies enjoyed unprecedented economic growth, prosperity and social stability, but during the period 1970 to 1979 saw inflation out of control, oil prices rocketing, and governments taking structural economic actions and reforms that are still underway, such as deepening of the capitalistic logic of profit seeking in the capital-labour relationship; enhancement of the productivity of both labour and capital; globalisation of production, circulation (of goods and services), and markets; marshaling (active) government support for productivity gains and competitiveness of national economies.*

Partly as result, the two commanding forces of the information age are competitiveness (the capacity of an economic entity to operate efficiently and productively in relation to other similar economic entities) and productivity (a measure of efficiency - the ability to perform well or achieve results without wasted energy, resources, time or money).

Competitiveness stems from flexibility or agility (the inherent capacity of an organisation's system of means to respond to rapid change) and productivity stem from innovation (the organisational capacity to continuously harness the process whereby knowledge is created, shared and applied).

Looking at the above-mentioned analysis, one could almost say that the derivative HR mandate becomes logically clear - that is, to ensure the organisation's competitiveness and productivity. Considering their respective drivers, the HR mandate is therefore extended to design and implement programs to enhance the organisational capacity to ensure that its system of means becomes and remains flexible and agile in the first instance, and in the second instance, to design and implement programs to support the organisational capacity to harness the knowledge conversion process or to continuously innovate.

One's immediate reaction is to wonder whether this HR mandate has changed at all over the past 100 years? It is a fair question. Perhaps we have deliberately strayed from this as our only true mandate - even if it did not change over the past century, perhaps we have tried (exactly because we are more [supposedly] people-focused) to insert more "humanity" in the relationship between capital and labour. If so, we should be congratulated.

So the question (also not new) remains - can we serve the capitalist ideal (the relentless pursuit of profit and personal satisfaction) and serve humanity at the same time - as an integrated HR mandate? And how? Where does the obvious conflicting ideals converge from a HR mandate perspective?

*Manuel Castells, The Information Age: Economy, Society and Culture Vol. 1-3

About questions and contexts...

When asking myself the question of how HR is going to change (or be changed!) in the information age, a journey began that lasted the good part of 10 years. The journey is not over, in fact I think it only has started and it is turning out to be a real adventure!

The information age in itself is a very interesting topic and I was introduced to the work of Manuel Castells's in this regard by the good and forward-thinking people of the Department of Information Science / Centre for Knowledge Dynamics and Decision-Making at the Stellenbosch University.
[http://www.sun.ac.za/InfoScience].

Castells published his empirical study on the information age in three volumes, titled "The Information Age: Economy, Society and Culture". Read his bio by following this link:
[http://ascweb.usc.edu/Faculty/Communication%20and%20Journalism/CastellsM.aspx]

Castells' work gave much needed clarity and perspectives on the mega-trends of the information age. From a HR point of view, our work is to become aware and understand these mega-trends as they form the contexts in which we work and will work. For example, if we understand the fundamentals of the global economy, we will see how this will change the organisation, if we understand these new organisational contexts, we have more insight into how HR will change, and so on.

Look at the picture below that illustrates this better:

 

We can see that one dimension forms the context for the next dimension. Castells talks about the "network society", a new type of society that is emerging as a result of the information age. He talks about the "network enterprise" the new organisational form in the new global economy. As the network enterprise operates in this global economy, so enterprise strategy cannot be designed without taking into account how organisations have changed in reaction to the geometry of the global, informational economy.

As HR Practitioners we need to understand the dynamics of the network enterprise in order to understand how work and the meaning of work has changed and subsequently how HR should transform itself to support people in these new contexts.

So the work for HR Practitioners is to ask a set of new questions:

• What is the information age and how is it changing society and culture?
• How does society operate in the new global economy?
• What will be the organisational dynamics inherent to this new economy?
• How will it impact on employment practices, management and leadership?
• Given these major changes what will be the new HR mandate(s)?
• How will we change or transform the HR domain to meet this new mandate(s)?

Gerhard

The Quest for Integration

Business and technology integration receives a lot of media nowadays. In a research study published by IBM in titled "Expanding the Innovation Horizon: The Global CEO Study 2006" a number of CEO's that participated in the study view business and technology integration as integral to innovation – or as one CEO put it, "as important as water is for sea traffic."

The relationship between business/technology integration and innovation is an important one. In the information age, productivity and competitiveness are the commanding forces for any  business in the global economy, but it differs from the industrial age in that productivity stems from innovation, and competitiveness from flexibility. So, if business/technology integration is recognised by CEOs as being essential for innovation to happen within their organisations, what lies at its essence?

The rise in complexity whilst doing business on a global scale is something that cannot be avoided. When considering the following picture, it becomes clear that from a network perspective (which is the organisational format in the information age), all relationships and engagements with entities such as customers, suppliers, partners, and other stakeholders have an impact on the organisation.

Our relationships and engagements with all of the above-mentioned entities require sets of data and information, but in turn also generates a lot of data and information. One of our challenges with data and information is that it need to be integrated with all appropriate and applicable (relevant) other data and information.

Integrated information is therefore the aim of integration. Only when we take all available data and information into account, effective decision making becomes possible. To put this concept in other words, complexity can only be managed by means of integration. The IT industry is quickly catching up on the need for integrated information - they use the term "unified" to describe this need, and says that

Why are we not always successful with decision making in organisations? Look at the above-mentioned picture and it becomes clear that when we have fragmented management structures that works against integration (such as the infamous silo organisation) chances are that our decisions and their impact will also be isolated. In a recent ITWeb Brainstorm magazine article, IBM's recent global survey of CIO's shows that a large number of them distrust the information they have to use to make decisions.

As the nature or essence of customer services are integrated information, the typical symptoms of fragmentation are an increase in customer problems (internal and external customers), poor decisions, weak communications, slow reaction to problems, and a lot of conflict and internal company politics. The benefits of integration however are significant: more and consistent communication across the business, more customer centricity, better customer visibility and intelligence, less customer pains, etc.

CEOs recognise  the value of business/technology integration - in the same CEO study mentioned in the beginning of this post, CEOs of companies that have actively worked to achieve integration, cite the following business benefits (from most to least):

• Reduced costs
• Higher quality and customer satisfaction
• Increased revenue
• Increase in overall speed and flexibility
• Access to markets and customers
• Faster time to market
• Focus and specialisation
• Access to skills and products
• Shared or reduced risk and capital investment
• Move from fixed to variable costs

As HR Architects the quest for integrated information should be the ultimate aim or goal of our efforts. How "unified" are our HR organisation? How do we achieve integration across our HR organisation in all its facets and dimensions? Do we create enough views and simulations to see how data and information is flowing (or not) across our HR organisation? The quality of HR services are measured by the consistency and reliability of it - and because the nature of HR services is information, then we need to ensure that the data and information produced by the HR need to be consistently provided and should solve the HR-related problems of our customers!

A unified HR organisation has learned to, and has worked hard to integrate all those entities (systems and sub-systems) necessary for it to serve its customer groups with services of quality. The work is integration and the HR Architect must ensure that it happens!

Gerhard

Categorising the workforce

Ever heard of the “virtualization of the enterprise”? Well, it is a big development in the world of IT. Virtualization in the context of IT means that hardware infrastructure items such as servers, can be virtualized through virtual machines,etc., the aim of which is to more productively manage space and offer more sleek IT services.

There is a so called “golden triangle” in the virtualization strategy, focusing on the interplay between memory, bandwidth and processing power.

This is rather important, the IT guys said, as the modern-day data centre is fast becoming the cornerstone for almost every business process in any organisation. For the IT guys to give you all kinds of applications (apps) and services, they have to adopt new ways of doing that – hence the virtualization benefits of more data centre performance and predictability of that performance as well as the ability to allocate resources (capacity) for any given service as needed.

Listening to the experts last year, I picked up that they use certain categories of workers and profiling them as clients according to their typical IT needs and services that they require.

Using different type of worker categories to define their customer profile (service needs and requirements) made me think that we as HR practitioners could in fact adopt such categories for purpose of streamlining our own HR service delivery and be more customer-oriented as a result?


In fact, as HR Architects we should engage the IT department with a discussion on the groupings of our customer groups and settle on a shared HR customer grouping naming convention.

Examples of the categories used by the IT people are as follows (yes, in HR we use the some of the same terms, but we use a different reason or underlying criteria [legal categories] to group our employees whilst this list indicates to the service needs or customer profiles of each of the categories):

Office Workers: Usually office-bound and connected to the company’s network for long periods of time, typically the support services people such as IT, Finance, HR, Admin, etc. These people use a lot of apps from their desktop,, and when they move workstation, they prefer to keep their settings. Apps that they use range from MS Office, e-mail, ERP systems (SAP, Oracle) as well as web tools and Project Management software. It people realise that Office Workers do have specific IT services needs and that these needs differ from the other types of workers defined.

Task Workers: These are workers that sit in call centres, rendering services to clients whilst continuously entering data into specific apps. They are always connected to the company’s network and shift workstations regularly. Task workers need to have the best possible IT service performance when they access any seat or workstation to do their shift.

Contract Workers/ Guest Workers: They require network access for the duration of their work as well as access to their highly personalised set of apps and data on demand. As these workers are usually not permanently employed, they need to adhere to the group policy regulating the use of data and company intellectual property.

Mobile Workers: Mobile workers travel most of the time and do not need constant access to the company network. They do however use a variety of resource-intensive apps such as Office or Customer Relationship Management (CRM) software. Mobile workers will use all sorts of mobile devices to connect to their e-mail and specific apps. This group includes people such as Sales Representatives and Field Service staff.

Remote Workers: This group of workers works off-site at remote locations where most of the time access to the company’s network is not possible. More examples of remote workers are offshore staff, outsourced or seconded staff, teleworkers and workers that look after remote operations or offices. They need secured access and control; they have device flexibility as well as diverse apps and users.

From a HR customer service point of view, we can design similar categories of workers for purposes of:

> analyzing their HR services needs in respect of each person HR activity or business process;

> build a service profile for them that indicates to the range, frequency and quality of HR services to them;

> design specific service metrics for the various groups;

> link all category groups to Talent Management areas – for example, one client company that we have worked for, deployed staff in China but those employees are not on the local (South African) payroll, but they are linked to all the local Talent Management activities.

Remember that HR service delivery will rest heavily on the reach and performance of the information and communication technologies the company has deployed across its operations.

The HR architect therefore needs to be consulting with the Enterprise Architect and/or the IT Manager and their teams to exactly set up the reach and level of performance of the data centers - it is crucial for the quality of HR services!

Gerhard

Working for (HR) Customers?

Years ago I attended a Customer Service Programme whilst working for a food and beverage company. The title of it was “Working for Customers”. The programme was compulsory to all employees and it brought about a significant change in our perception of what we were doing and why we are doing it daily.

The programme taught us to find a customer at the end of our activities – if there wasn’t a customer, why did we spend time with it?

HR service delivery is a very important output for the HR practitioner today. If at the end of our day-to-day work, we do not see and serve a customer, we must ask ourselves what are we busy with and why? One of the ways to make sure we can answer this question is to redesign our HR activities into well-designed HR business processes.

So what is the true nature of HR services? What does it consist of?
Almost all customer services today consist of…information. And so does HR services – if you think about it in this way, HR services are things like remuneration reports, headcount numbers, advice based on specific information, results of employee surveys, etc.

So, if the true nature of HR services is information, we will want to know how we make sure our HR services is of high quality.

The customer service experts say that we need to measure quality of service (delivery) against it consistency and reliability. Consistency refers to the consistency with which we provide the particular service – this means that it should be available 24/7 or at least exceeding the customers’ expectations in this regard. Reliability of service refers to the appropriateness of the service to address the customer’s problem – therefore the measure is did the HR service provided solve the customers' specific problem or need?

It follows then that HR services are heavily dependent on the quality (the consistency and reliability) of the HR function’s information…and this is not the responsibility of the IT department!

Who are the customers of HR anyway? There are various customer group(ings) that HR must serve on a day-to-day basis, such as operations managers or line managers, all employees individually, executive management, the board of directors, labour unions, government departments (Department of Labour), other subsidiaries in the same group of companies, contractors, and so on. All of the above-mentioned entities requires consistent communication and trusted information services from the HR function!

As HR practitioners rendering services to our customers, we must be aware of and understand the processes through which (HR) information is generated and also how we can make sure that it is information of integrity – or trusted information.

Gerhard

Mapping the HR environment

The work of the HR Architect starts with the analysis and mapping of all the dynamic components present in the current HR organisation.

This work is essential to establish a clear and detailed picture of the HR organisation as it exists.

The impact by entities such as customers, partners, suppliers, people, stakeholders, advisors, geographical locations, processes, delivery model, data & information, applications and technologies on the HR organisation will become clear and from a systemic perspective, the impact of the HR organisation's relationships with these entities will be evident.

All these entities need consistent and reliable services from HR in context of their specifc relationship with the HR organisation or part thereof. These information-based services should add value to these entities and their relationships with the HR function.

Customers of HR demand professional HR transactional and/or talent management services as their needs for such services arise. They include HR Teams themselves - according to the specific HR service delivery model and channels structure - as those teams are dependent on some of their colleagues for information-based services in order for them to offer services to their customers - this is typically the place that HR Business Partners find themselves in.

Partners of HR are those entities that partner with HR and support the HR Teams to delivery services. These are support functions such as IT, Finance, Facility Management, etc. Partners could also include the Labour Unions, the Board of Directors, and Line Managers (such as, assist HR to execute Employee Wellness programmes or take responsibility for some of the recruitment processes, and so on).

Suppliers to HR are usually external entities that provide products and services to the HR function within context of a financial transaction. These could include products and services such as Salary Surveys, Publications and Subscriptions, Skills Training Providers, Recruitment Services, etc. Depending on the specific HR service delivery strategy and structure followed, some of these services are outsourced to certain service providers and could also give specific services on behalf of the HR function to its customer groups.

People in HR refer to the all those people who are on the HR function's own payroll. Depending on the size of the HR function as well as the specific HR service delivery structure, these could include all teams working as Business Partners at the operations, Center of Excellence or Expertise staff, HR Managers, HR Shared Services staff, and the HR Executive.

Stakeholders in HR include all entities that have a vested interest in the HR function. Stakeholders could include the Board of Directors and its sub-committees, Communities where the company is operating in, Labour Unions, National Government departments such as Dep. of Labour, Revenue Services, Dep. of Health and Safety, etc. Stakeholder relationships are extremely valuable and if managed carefully, are good resources to the HR function.

Advisors to HR are usually professionals such as Lawyers and/or Business Consultants in almost every aspect of Human Resources Management. Advisors typically give services to HR on an ad-hoc or per-project basis. Companies soften contract advisors for their knowledge, skills and ability and to recommend on best practices in certain specific areas.

Locations of HR are provided where the customer groups of HR are geographically located. For HR to deliver the same quality of services to all its customers, it needs to strategize and structure its service delivery model and channels to closely match the geographical footprint of its customers. This is more than often left to the operations and/or the IT function, but HR as the custodian of HR service delivery needs to take care of this dimension all the time.

HR Business Processes are the core vehicle through which it should deliver its services. It is the lifeblood and essence of HR service delivery! These processes typically range from all the HR transactional processes - organisation management (including job design and profiling), time management, payroll administration, personnel administration (including leave administration and benefits administration) to the Talent Management processes such as Recruitment (including e-Recruitment), career & succession planning, skills training and development, performance management, employee health and safety, employee relations management, employee wellness and employee assistance programmes and exit management. Well designed HR business processes are the new way of work for HR Teams and need to be actively involved in the design process. HR Business Processes deliver HR customers results across the People Value Chain.

The HR Service Delivery Model represents the specific HR service delivery strategy and structure that the HR function will use to deliver quality HR service through well-designed HR business processes to all customer groups and stakeholders. The well-known 3-tier HR Service Delivery Model consist of a Shared Services Center for all the HR Transactional services, the Centers of Excellence or Expertise that deliver "best practices" and policy support services, and the Business Partners that are usually seconded to the operations for on-site HR service delivery, specifically non-transactional services and strategic Talent Management and OD-type services.

HR Data and information refer to all data and information that contain content that is essential for HR services. It could be structured data sets; specific HR metrics designed to measure things such as compliance to policies, number of bursaries converted into full-time equivalents, levels of health and safety incidents, etc. Reporting, especially consolidated and integrated HR data and information is the key ingredient of HR services.

Hint:
Compile a list of all known parties/ entitities/ people in each of the categories that are mentioned above. Start by describing the current relationship that this component has with your HR organisation and what the impact of this relationship is in context of the HR strategy.

Next, describe the nature (i.e. headcount report) and frequency (i.e.weekly) of all the data and information required and/or provided to that specific entity and the business/ HR decisions that the said data and information support.

By doing this anlysis, we get a more clear picture of the expanded HR customer groups and their service needs - this is what HR in the information age is all about!

Gerhard

What is a HR Architect anyway?

The HR Architect is responsible for the design, implementation and testing of the HR Master Plan or Human Capital Architecture Blueprint that defines, describes and documents all elements or components of the HR organisation as well as their inter-relationships and dependencies; for the specific purpose of integrating all those architecture components or layers within context of the chosen HR strategy, service delivery model and channels.

We have designed the Human Capital Architecture Framework based on the concept of Enterprise Architecture (EA). Herewith some definitions on the concept of EA for more clarity:

·        EA is a “blueprint” that conveys how an organisation’s technology, information, and organisational resources should work together to effectively support the fulfilment of its strategic business objectives.

·        EA is a “design vision” for the organisation, articulating where the business is going, strategically, and how it is going to get there in the most optimal manner, in terms of technology enablement, information requirements, and organisationally, ensuring that all role-players—both business and IT—have a shared, common understanding.

·        EA describes where you are versus where you want to be for the various architectural components—and how they interface with each other—and the plans for the moving from the “as is” to the “to be”.

·        EA is an iterative (shared), organic and evolving process.

Enterprise Architecture is a logically consistent set of models, guidelines, principles & frameworks (including policies, procedures, standards, guidelines) that, across the various component architectures, guide the “engineering” of an organisation’s:

·        organisational operating model,

·        business process models,

·        information systems, and

·        technology applications &

·        technology infrastructure;

…that are derived from business and strategic requirements; and that facilitates agility and better enables rapid change in a company’s structure, business processes and IT applications & infrastructure.

The adoption of a unique domain Human Capital Architecture Framework model based on the larger Enterprise Architecture concept is important precisely because any HR Transformation effort must be aligned with the strategic direction and EA plan or blueprint of the larger organisation!

By mirroring an architecture approach we ensure that as HR Architects we act collaboratively with the HR, IT and EA teams in our efforts to design our HR master plan or blueprint. Going at it alone is simply not an option!

Read more on EA:

Jaap Schekkerman, the Founder and President of the Institute for Enterprise Architecture Developments (IFEAD)

http://www.enterprise-architecture.info/

Also see Jaap Schekkerman’s Linkedin profile: http://nl.linkedin.com/in/jaapschekkerman