Core HCM Structures for Global Organizations – First things first!

Many organizations involved in a core Human Capital Management (HCM) implementation simply do not “get” that organizational, pay and job structures are fundamental to every core HRIS implementation. These structures are fundamental to the design of any comprehensive HRIS and will facilitate efficient company reporting and analytics.  For some context, organizational structures may include divisions, departments and cost centres. Pay structures would describe potentially having a standardised pay grade system with specific pay grades. Job structures would signify having a complete set of job or position codes which are linked to job functions or job families.

Here’s an example of how this oversight severely put a major transformation project at risk.

A renowned, multinational business commenced a core HRIS implementation process on a global scale with multiple project phases. Vast amounts of capital expenditure were ploughed into this project as organizational leaders wanted to see rapid progress and key milestones achieved. The critical objective for the company was to establish one master system of record to facilitate accurate, superior reporting which will allow the business to keep growing.  The deep analytics functionality which is inherent across the cloud HCM solutions would be fundamental in “enabling business leaders” to maximise people development within the enterprise.

Within weeks into the project it was clear that the client has not consolidated organizational, job and pay structures at a global level in order to facilitate utilising these new innovative HCM technologies that had been purchased.

What happened to the project? At least five major impacts were realized:

1. The project timelines were instantly at risk as it is unrealistic to expect that businesses standardize structures to an accurate level during the implementation process.
2. The overall scope of the project needed to be extended which increased the cost for the customer.
3. Customized system rules and structure associations were designed at a country level which limited the potential for streamlined global reporting and analytics.
4. The application will not have a consistent look and feel to it. Inconstancies will most likely have a chilling effect on user adoption and potentially increase the likelihood of rework to the system in the years to come.
5. The net result for the customer is a new advanced, multi-faceted cloud application, but the organization still struggles to report in a meaningful manner at a global level.

“Prevention is Better Than a Cure”

How can organisations planning a core HR solution avoid this type of incidence?  Here are some key strategies to avoid costly project delays and drop in user adoption:

1. Ensure that company leaders are committed and willing to dedicate resources to the “one system for one company approach”.
2. This consolidation of organizational, pay and job structures needs to happen at least 3-6 months before an EC implementation.
3. Focus on Organizational structures firstly. Ensure the naming conventions across countries in terms of divisions and departments are replicated. If there is 1-1 or 1-to-many relationships between locations/departments/divisions it is critical that relationships are consistent across countries. This may require organizational restructures in certain countries.
4. The Head of HR should be responsible for securing one global job catalogue with pertinent job families/functions across the globe.  Creating a comprehensive position management structure should be given top priority.
5. Pay structures can be especially challenging to standardise across countries and systems.  The existence and support of an experienced compensation and reward leader will expedite and facilitate this process.
6. Seek to engage an experienced Organizational Change Manager.  This change management specialist will be able to communicate the benefits of a uniform approach to local and regional stakeholders.
7. Project leaders should also consider integrations to external systems in the design phase. Is there the requirement to replicate these new global structures in a payroll or time and attendance system?

Conclusion

This pre-work at a structural level will only occur if organizational leaders understand the complexities of a global core HCM project.  Deep levels of commitment from all pertinent project stakeholders are required so that the organization can leverage the remarkable new HR technologies.