how technology can build - organizational … 21 nc. 4 overview of today’s organizational...

How Technology Can Build The Organization of the FutureOptimizing Organizational Design, Transformation and Sustainability

nakisa.com

Copyright © 2017 Nakisa Inc. 2

Table of Contents

Table of contents 2

Executive summary 3

Overview of today’s organizational management challenges 4

Trends in Merger & Acquisition strategies 5

Change is inevitable. How you respond is a choice 6

Key issues in the Organizational Transformation process 7

Organizational assessment and analytics 8

Talent management 8

Readiness assessment 9

Organizational design and modeling 10

Change management 10

Leveraging comprehensive technology for Organizational Optimization 11

About Nakisa 12


Executive SummaryThis whitepaper provides an overview of the challenges that are facing HR leaders amid the overall move toward digital transformation within their organizations. In addition, global trends in merger and acquisition (M&A) activity, country-specific localization, workforce diversity and joint-venture partnering are adding to the inherent complexity of today’s organizational structures.

Coping with this accelerating pace of change and aligning their organizations for optimal productivity and responsiveness are mission-critical factors for HR leaders and corporate executives going forward.

Just as new transformative technologies are radically changing line-of-business functional departments throughout today’s organizations, new Organizational Transformation technologies are empowering HR leadership to seamlessly evaluate, redesign and optimize enterprise-wide organizational effectiveness.

The focus of this whitepaper is to help HR professionals and corporate management understand both the organizational transformation challenges and the technology solutions available to address them.


Overview of Today’s Organizational Management ChallengesToday’s business leaders face a wide variety of difficult challenges such as increasing market complexity, pressure from global competition, and the accelerating pace of change and innovation, all against the backdrop of ever-shrinking windows of opportunity for responding to change.Overall business strategies may differ, such as focusing on organic growth, building through merger & acquisition (M&A) activity, or reorganizing existing functions for better results. In any case, strategic success depends on effectively aligning your organizational structure and effectiveness with achieving the overall business objectives.

As with any complex journey, organizational transformation success is dependent on these key factors:

1. Clearly understanding your starting point (current organizational structure)

2. Defining your destination (organizational goals)

3. Assessing the alternatives (modeling various organizational design changes)

4. Monitoring progress throughout the journey (feedback loops and change management)

5. Measuring goal achievement (productivity, communications, employee engagement, etc.)

6. Charting out next steps (building in continuous improvement)

As shown below, today’s HR organizations need to effectively address enterprise goals of 1) Protecting Investments, 2) Enabling Change, 3) Expansion & Growth, 4) Workforce Optimization and Alignment, and 5) Managing Talent and Workforce Engagement.


Trends in Merger & Acquisition StrategiesIn today’s highly competitive global markets, reliance solely on organic growth can put companies at a disadvantage, which has led to an escalation of other strategies for spurring more rapid growth such as through merger and acquisition (M&A) activity.

40%

25%

17%

14%

Limited organic growth optionsNeed to address the transformation in the marketplace/existing business modelsAvailability of credit on favorable termsLarge cash reserves commitmentsShiftting consumer demandsImproving equity marketsOpportunities in emerging markets

40%

25%

17%

14%

Limited organic growth optionsNeed to address the transformation in the marketplace/existing business modelsAvailability of credit on favorable termsLarge cash reserves commitmentsShiftting consumer demandsImproving equity marketsOpportunities in emerging markets

KPMG LLP M&A Market Pulse October 2016

Which factor do you think will most strongly drive deal activity in 2017?

While the M&A approach can provide dramatic acceleration of growth and expansion of market reach, the significant challenges of combining multiple organizations cannot be taken lightly. A recent survey by M&A Partners showed that the overall state of integration effectiveness for M&A deals was rated as less than good by 71 percent of the respondents. Shown below are specific areas where respondents indicated underperformance with their M&A integration processes.

39% 48% 52% 60%

Cost synergy objectives and overall business

results

New product development

objectives post-deal

Revenue synergy objectives

Higher performance culturepost-deal

Percentage of respondents reporting they typically underperform or DO NOT meet the following business result objectives

Source: M&A Partners | The State of M&A Integration Effectiveness™ Survey

According to a recent survey by KPMG LLP, the audit, tax and advisory firm, M&A activity in the US is expected to remain steady in 2017, after the record high deal levels of 2016. Of nearly 100 respondents to KPMG’s M&A Market Pulse survey,

83% anticipate that they will have completed at least one deal by the end of 2016 84% indicated that they will initiate at least

one transaction in 2017

Limited organic growth is the top reason driving deal activity, according to 40 percent of respondents, followed by leveraging M&A to respond to transformation in the broader marketplace, at 25 percent.

6

Change is Inevitable. How You Respond is a Choice

PEOPLE PROCESS

TECHNOLOGY STRUCTURE

BUSINESSCULTURE

Whether your company is leveraging M&A activity to accelerate growth, is primarily focused on organic growth opportunities, or is constantly reacting to externally driven market dynamics and technology innovations, one thing is certain:

Change is Inevitable. How you respond to change is a choice.

In order to proactively manage these winds of change, HR leaders need to leverage new comprehensive technologies for organizational assessment, design and transformation.

The key factors for success with organizational transformation will include:

• Agility – to quickly embrace dynamic change factors such as M&A or market opportunities

• Analytics – to understand and measure key metrics such as productivity, employee engagement, communications, spans of control, etc.

• Talent Assessment – to catalog available skills, identify gaps or duplication, and to formulate skills improvement plans

• Modeling & Design – to flexibly “test-drive” various scenarios and evaluate alternatives

• Communications – to foster engagement of stakeholders and decision-makers throughout the design and implementation phases

• Reporting – to provide big-picture view and drill-down detail on organizational functioning and results from organizational transformation activities

Throughout the organizational transformation process, it is vital to comprehensively consider the interrelationships between People, Technology, Processes, Structure and the overall Business Culture.

Studies reveal that well-managed change through proper processes and strong leadership, can help smooth the transition and prevent productivity dips during the change.

Additionally, talent retention is enhanced by a clear and well-managed change process that maximizes communication and reduces employee anxiety.

Engagement of all stakeholders throughout the process also maximizes input and buy-in, while avoiding the uncertainty and surprises that can lead to snags or resistance in the transformation process.

Ultimately, using a disciplined, coordinated and well-managed change process allows you to get to your end-point faster, while managing costs, keeping talent in alignment, and minimizing loss of productivity during the change process.


Key Issues in the Organizational Transformation ProcessThe following sections provide a brief overview of the key issues involved in any organizational transformation process. In each of these areas, the change process needs to establish a Baseline, to Analyze the current situation and options, to Design and decide on a path forward, to Execute on the selected scenarios and to Align the new organizational effectiveness through tracking and feedback.

When considering the areas discussed below, it is important to keep in mind that all the organizational change areas and the steps within each area are interrelated issues that need to be addressed from a comprehensive standpoint. For example, organizational assessment must include talent management considerations and corporate readiness for change.

Even more importantly, as the change process moves forward, the organizational transformation software platform must be able to dynamically correlate ideation, changes and outcomes throughout the design and implementation phases.

Just as CFOs and CIOs are leveraging new Digital Transformation financial and operational platforms to provide a “single-source-of-truth” for corporate decisions, HR leaders need to use comprehensive software platforms to seamlessly integrate all aspects of Organizational Transformation within a single unified end-to-end environment.


Organizational Assessment and AnalyticsThe first key step for any organizational transformation program is conducting a comprehensive assessment and needs analysis.

This involves identifying the differences between the current and the new business models, defining key changes, gap analysis of skills and resources, and defining key metrics to assess results.

This step essentially defines big picture goals, strategic objectives and potential obstacles that must be overcome.

Talent ManagementCreating a Strategic Human Capital Plan is a critical process that all companies should be continuously addressing, whether amid a major re-org such as an M&A project or simply as a best practice for maintaining optimal organizational functioning.

It is vital to understand your talent gaps and vulnerabilities before starting a transformation project so that you can identify talent acquisition plans. For M&A projects, it’s critical to identify talent resources and gaps in both organizations in order to make the best staffing decisions for the new combined organization.

The overall goals of a Strategic Human Capital Plan should be:

• Placing the right people in the right roles at the right time• Aligning talent with business strategies• Developing talent through training and job enrichment programs• Establishing proactive succession and contingency plans• Proactively instituting retention policies and key player

identification processes


Readiness AssessmentThe change Process becomes more cumbersome, costly and risky when there exists a large gap between the required and actual organizational readiness. Preparing for change is critical for getting off to a good start and for ultimate success. Companies need comprehensive tools and structured analytics to help assess their Leadership and Organizational readiness for the change process.

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19.14

23.90

18.52

22.86

13.71

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5.00

10.00

15.00

20.00

25.00

30.00

1

Traits

Resourcefulness Op�mism Adventurousness

Passion/Drive Adaptability Confidence

Tolerance for Ambiguity

Worksheet for Change Readiness

Resourcefulness Optimism Adventurousness Passion/Drive Adaptability ConfidenceTolerance for Ambiguity

1 24 25 21 24 20 23 192 27 24 20 28 18 24 153 25 24 19 20 18 20 134 27 15 11 22 14 18 125 27 25 13 23 19 20 126 28 30 15 28 14 27 87 27 26 22 22 22 23 138 19 20 16 23 16 15 89 21 22 19 14 20 20 11

10 29 19 20 26 20 24 1411 25 20 16 19 13 20 1412 28 23 18 27 20 22 1113 29 24 21 26 21 26 1614 28 25 22 21 21 25 1615 28 25 23 25 20 23 1716 30 25 22 23 22 28 1917 27 22 17 24 16 26 1618 23 22 18 27 21 23 1219 26 23 21 26 18 24 1620 30 29 29 30 21 25 1321 23 21 19 24 15 24 13


Change ManagementFinally, it is critical to provide an end-to-end change management structure that proactively surfaces any roadblocks and issues throughout the process and incorporates built-in documentation procedures to facilitate training and adoption. Built-in codification and auditability of the change process, outcomes and metrics provides the foundation for sustainability, stakeholder adoption and a baseline for considering and implementing future changes.

Existing Org transformation

process

Map out steps in process

Understand current

state

Assess business readiness

Apply change mgmt. plan

Implement Hanelly;

eliminate or reduce work

Write up new process using

Hanelly

Step-by-step process manual

Hanelly User guide

embedded

End User guide with

‘help’

Knowledge Transfer

Hands on workshops

Business scenario creation

New process and Hanelly

used to solve business scenarios

Super Users and Trainers

created

Establishing the working model and accountabilities to maximize Hanelly’susage

Organizational Design and ModelingIn the past, the development of organizational design alternatives has typically been a manually intensive and ad hoc effort that often fails to surface the optimal design approach. It addition to being inherently hit-or-miss, the manual design approach is typically slow, resource intensive and hard to measure.

In contrast, new comprehensive software approaches offer a highly-structured and intuitive methodology for brainstorming, modeling and measuring the projected outcomes for a variety of different scenarios. Because the process is integrated rather than ad hoc, decision-makers can apply real-time analytics to various design alternatives and interactively modify the parameters to tune them for optimal results.

To optimize results, the organizational transformation platform should support integrated and automated processes for the following design activities:

Scenario ideation and creation

Delegation of activities

Creation of multiple scenario options to drive decision making

Roll up of proposed scenarios and metrics review

Structured approval process with stakeholder engagement


Leveraging Comprehensive Technology for Organizational OptimizationAt a time of unprecedented economic change, global competition, technology innovation and market dynamism, businesses need to be very deliberate about their organizational strategies, tactical plans, and use of resources to drive their growth agenda.

In response to market and business consolidations, workforce adjustments, and growth of emerging markets, organizations need highly developed business processes, human capital strategies, and accountable leadership.

Hanelly from Nakisa is a proven comprehensive platform that has been designed from the ground up to unify and integrate all the key organizational optimization challenges facing Chief Human Resources Officers (CHROs) today and tomorrow.

Over more than ten years of development and enhancements based on real-world customer interaction, Hanelly has established an industry leadership position for enterprise-class organizational optimization that combines all the key functionality within a powerful, agile and intuitive environment.

As part of the newest release, Hanelly supports matrix organizational structures and dotted line reporting. This functionality allows customers to design and view organizations from an operational, functional or legal perspective, which are key views for effective organizational transformation decision making. Hanelly also enables the user to view the organization geographically using a global employee map powered by Google. With enhanced dashboarding as well as prescriptive and predictive analytics

Hanelly now offers users more powerful visibility and insights about the organization.In the era of digital transformation, Org design is the #1 challenge CHROs will face for the next few years. Companies need to react to constant market changes and reorganizations are happening on an ongoing basis. Hanelly is designed to work directly with most ERPs allowing clients to quickly adapt to changes, visualize and transform their organizations based on their evolving needs.

Mergers & AcquisitionsQuickly and easily understand your organizational structure with

intuitive drill-down, drag-and-drop, and charting capabilities. Easily share, discuss, and analyze information with your team

Modeling& VisualizationUse what-if scenarios to understand how changes would impact

your KPIsAccelerate integration and re-design, eliminate errors and ensure

the right talent is placed in the right positions

Analytics & Reporting Analytics delivered in-chart or via dashboard help track industry

best practice organizational KPIs Increase confidence of stakeholders based on real time accurate

data from a single source of truth

Merg

ers &

Acq

uisit

ions

Modeling &

Visualization

Analytics &Artificial Intelligence

12

A global leader in enterprise business solutions for Organization Transformation and Accounting & Compliance, Nakisa delivers innovative, forward-thinking and robust human resource and financial management solutions that advance your business strategies.

Nakisa serves 800+ enterprise customers and over 4 million subscribers in 24 industries. Nakisa is proud to work with some of the world’s most renowned brands.

Contact Information:NAKISA® Inc.733 CathcartMontreal, QuebecCanada, H3B 1M6Phone: +1 (514) 228-2000info@NAKISA®.com

Hanelly is a cloud based software solution that enables companies to quickly understand their current organizational structures and visualize the potential impact of their decisions through HR analytics while supporting key HR initiatives. add link to Hanelly page.

Learn more about Hanelly at nakisa.com/hanelly

how technology can build - organizational … 21 nc. 4 overview of today’s organizational...

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