managing change in international sap hcm projects

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Agenda

•  The Forgo.en Half of Change •  Understanding Where Other Countries are Different in SAP HCM

•  Changes HiCng the Corporate FuncFon in SAP HCM

•  Understanding the Roles of Mindset and Culture

•  GeCng Everybody on Board

•  EvaluaFng the Effort and Risk of the Change Program

•  PuCng it all together: Your Roadmap to Change

•  Wrap-‐up

www.iprocon.co.uk Transforming Organisa6ons [email protected]

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The conqueror’s approach to global rollout

•  Common aCtude: –  Headquarters want this – We expect resistance, because that’s what always happens –  But we have support from the board and we’ll squash any resistance


Changing things by force is supposed to be quick

•  However, it oXen doesn’t work –  Provoking even tougher and longer resistance –  CreaFng parFsans to make you stumble during the project

•  It does permanent damage to morale and cooperaFon aXer the project


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The missionary’s approach to global rollout

•  Mindset: we bring the blessings of civilized HR to the world •  Problems:

–  Likely to provoke resistance –  Certainly local employees won’t take any ownership –  Missing out on learning opportuniFes


It’s not only the others, who need to change

•  It is obvious that there is change for integrated countries •  However, it is rarely appreciated, how much change is required

from central IT or HR, affecFng –  Systems –  Processes & behaviours –  ACtudes & mindsets –  OXen right down to values and basic assumpFons


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Coopera6ve model for change

•  While some clear guidance from top management is required, your change model needs a strong cooperaFve element, because –  Your depend on local knowledge for project success –  You need local management and HR to bring the workforce on board

–  SAP HCM is oXen a part of a large integraFon project (post acquisiFon) and therefore not supposed to rock the boat

–  You don’t want to end up micromanaging local HR processes from the corporate centre

•  To get to a cooperaFve model it helps to –  Appreciate that both sides need to change –  Be open to learn –  Involve local managers and experts early on


Agenda







•  Wrap-‐up


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Background: the global template

•  SAP HCM configuraFon is split into –  Global & mandatory –  Global & voluntary –  Local

global template


Global template: how it really looks like

•  You need to go into detail, building the foundaFon for –  SAP HCM customizing –  AuthorizaFons –  Interfaces –  Training


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How global can the system really be?

•  Corporate IT and HR usually underesFmate the need for localizaFon, because they assume –  Complexity in all countries sits in the same processes –  Legal requirements are restricted to payroll and benefits –  Legal requirements and language are the only significant drivers for localizaFon

–  Processes on the mother country are best pracFce throughout •  Local HR and IT try to sFck to their ways, assuming –  Corporate funcFons don’t understand local needs anyway –  It’s all about cuCng their jobs –  Corporate funcFons are not prepared to compromise –  The way SAP HCM does things is alien to them and looks overly complicated


Some surprises for corporate HR and IT

•  There are many country specifics beyond payroll & benefits – Master data info types, even when not used for payroll –  Statutory reporFng & staFsFcs –  EEO compliance, parFcularly in recruiFng – Not everywhere do people love retroacFve accounFng as much as in Germany

– Data privacy •  Best pracFce doesn’t work the same in each country – ACtudes & culture have an impact

•  E.g.: Self Service is oXen a problem –  Business is done differently in a different environment

•  E.g.: with much lower wages automaFng processes doesn’t always make sense


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Simple example: infotype 0002


Consolida6ng numbers for repor6ng is easy?

•  AssumpFon in corporate reporFng – We acknowledge that subsidiaries use different wage types, employee subgroups, etc.

–  So based on the current reporFng in the mother country •  We build matching tables to match other countries wage types etc. with those we are reporFng today

•  Maybe even add a few new ones •  Feed the numbers from all countries into BI where the matching rules integrate them into our reporFng

•  It’s not that easy – Many local wage types etc. cannot be matched with an exisFng one

–  You end up comparing apples with pears


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Simply matching the old structure doesn’t work

Bucket 2

French WT1100

French WT1101

Czech WT 3000

Czech WT2223

Bucket 1

French WT1000

German WT5652

German WT5726

Czech WT2222

Old (German) French Czech

5652 1000 2222

5726 1000 2222

??? 1101 3000

??? 1100 ???

??? ??? 2223


Agenda



•  Understanding the Roles of Mindset and Culture •  GeCng Everybody on Board •  EvaluaFng the Effort and Risk of the Change Program

•  PuCng it all together: Your Roadmap to Change •  Wrap-‐up


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Where you need to change in HQ country

HR-‐Process

IT-‐Process

Technology

ACtudes &

mindsets


HR process changes at HQ

•  Redesign HR reporFng to be really global –  Global reporFng should not be an extension of the former HR reporFng in the HQ country

–  Understand local data •  Provide date for global processes in –  Recruitment –  Succession planning –  OrganizaFonal management

•  Use corporate language as defined – May differ from language in HQ country –  Consider which info needs to be available in local languages

•  The usefulness of English as corporate language is usually overesFmated, parFcularly by Europeans


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IT process changes

•  Consider Fme zones & payroll schedule –  There may be no “night” any more for batch jobs and system restarts

– Weekends for maintenance shorten or vanish –  No comfortable 4 weeks period between payrolls for upgrades

•  Be inclusive in communicaFon –  Provide all globally relevant informaFon in English –  Some info needs to be available in local languages as well

•  Hotline: 24/7 and mulF-‐lingual –  Think about local centers of experFse and “follow the sun”

•  Redesign your tesFng and QA processes – When installing support packages or upgrades you can no longer focus on one MOLGA (country modifier) only


Technology changes

•  AuthorizaFons –  It’s not only about protecFng HQ’s data from subsidiaries –  Consider local data privacy regulaFon

•  Check your programming guidelines to include rules about – Making programs mulF-‐lingual –  Being generic about using MOLGA, country key, currency, etc., when selecFng data from the database

–  Considering Fme zones •  Use SY-‐DATLO, SY-‐TIMLO instead of SY-‐DATUM, SY-‐UZEIT

•  Infrastructure –  Ensure appropriate response Fmes for all locaFons –  Consider local PCs: are they equipped to deal with SAP GIU and portal requirements?


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Agenda







•  Wrap-‐up


Who’s beSer?

•  There’s a strong tendency for the team from HQ to feel superior –  Because they are HQ –  Because they deal with an emerging or developing country –  Reinforced in a post-‐acquisiFon situaFon, because they “won”

•  Processes worked very well so far –  Before other countries where integrated in the same SAP HCM

system, HQ processes may have been perfect –  They should work well for them, too –  Reinforced, when HQ is by far the largest country – although then

HQ processes are even less likely to fit new requirements •  Team from subsidiary may have similar argument •  Different is oXen seen as “inferior” rather than “fit for

purpose”


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Cultural layers according to Schein

•  Address the right level: –  If things have been done in a certain way successfully for a very long Fme, it may become a basic assumpFon (not usually quesFoned)

–  Change efforts oXen target artefacts only – the easily visible behavior.

–  Basic assumpFons are not easily changed and may even need to be worked around

Values

Norms

Artefacts

Basic AssumpFons


Required aTtude and mindset in HQ team

•  HQ team needs to appreciate that –  Their current processes are unlikely to be fit for a globally integrated SAP HCM environment

–  Some things may become more complicated, but understand that this serves strategic objecFves beyond HQ

–  They may lose some freedom as well

•  They need to be open for –  Best pracFce they can learn from subsidiaries – Ways of doing things that fit a parFcular naFonal culture –  Ideally: moving some tasks away from the HQ country, if circumstances in another country fit the purpose be.er •  Distributed centers of experFse following the vision of a transnaFonal rather than internaFonal organisaFon


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Na6onal culture: example in Hofstede’s schema

Dimension

(Mean) Uncertainty Avoidance

(64)

Power Distance

(51)

Individualism

(51) Masculinity / Femininity

(51)

Germany Medium (65) Low (35) Moderately high (67)

Moderately Masculine (66)

UK Low (35) Low (35) High (89) Moderately Masculine (66)

Spain High (86) Moderately High (57)

Medium (51) Moderately Feminine (42)


Rela6onship with 6me: example Past Present Future

Mexico

UK

Germany


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There’s no “good” or “bad” na6onal culture

•  (Hermann Hesse, German Novelist, 1877-‐1962)

“Every age, every culture, every custom and tradiFon has its own character, its own weakness and its own strength…”


Agenda







•  Wrap-‐up


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GeTng the HQ team on board

•  Don’t assume they are rollout-‐ready now –  Many organizaFons have rolled out to 20+ countries but are sFll not

geCng the full value, because HQ hasn’t changed •  Show need for change with simple examples (process,

technology) •  Don’t condemn the “old ways”

–  Show, what’s sFll useful •  Make it fun and a posiFve challenge

–  Exploring internaFonal differences is extremely interesFng –  Those not moFvated by this, are unlikely to be right for the team

•  Allow Fme for the learning curve –  Do some pre-‐project training –  Start with “easy” countries


The global rollout team

Language skills

InternaFonal experience

Open minded

SAP Know How

Perform under pressure

Like travelling


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Get local buy in

•  Clearly and early communicate –  ObjecFves and tasks –  Required changes (including the negaFve ones) –  Changes HQ makes for the benefit of subsidiaries

•  Plan for success –  Design the project so that the subsidiary gets clear quick-‐wins

•  Local reporFng •  AutomaFon or plausibility checks in data maintenance •  Replacement of small soluFons in Excel etc. with SAP HCM

•  Understand local culture and requirements –  Fight the tendency to differenFate less, if things are far away

•  Ireland <> UK •  Quebec <> Ontario


Stakeholder management •  Understand those, who affected by the project:

–  Which power do they have? –  What do they want -‐ are there hidden agendas?

•  Typical power structures differ between countries (e.g. unions)

Stakeh

olde

r Interest

High

Med

ium

Low

Stakeholder Power Low Medium High

Local CIO & HRD

Local experts


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Making the project work on a day-‐to-‐day basis

•  Promote formal and informal communicaFon between local and corporate teams –  Arrange face to face meeFngs as early as possible

–  Do a jour fixe as web conference throughout the project

–  Involve them into a fun event (like a football tournament) –  Provide chat room & wiki for online communicaFon –  Define communicaFon Fme slots suiFng HQ as well as local

•  Language: –  Avoid using HQ language, if not English – Make sure you have translators available with some background in HR and IT and don’t change them

–  Try to have sb. with local language skills on the global team


Agenda







•  Wrap-‐up


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The change kaleidoscope

Time

Scope

Preser-‐va6on

Diversity

Capability &

Capacity

Readiness

Power

•  Simple framework to assess the complexity of change

•  Creates awareness for project planning and change issues

•  Implicates design choices for managing change •  For detailed informaFon see “exploring strategic change” on “resources” slide


Design choices: examples

•  Time –  Time pressure may require more top-‐down and less cooperaFve change. Important: demonstrate need for this approach. •  Use the “Burning Plavorm” concept

•  CapabiliFes –  If strong SAP HCM capabiliFes are already available locally, less guidance from HQ is required •  Set objecFves in clear framework and don’t micromanage within this space

•  Readiness –  If HQ is not at all open minded about local requirements, differences, and strengths, more Fme is required to •  Educate HQ team •  Maybe replace individuals


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Agenda







•  Wrap-‐up


Change roadmap for global rollout

Define corporate objecFves &

scope

Assess change requirement on corporate level

Build rollout readiness in HQ

Get buy in from subsidiaries

Define global template

Make operaFonal changes required

in HQ

Assess change requirement in each country

Manage change in each country

Observe lessons learned


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Does this apply, if we already had some rollouts

•  Few corporate HR and IT teams have really developed the best capabiliFes and culture to benefit from a global HR system

•  A few indicators that there may be room for improvement –  You need to quote “top management support” quite oXen to make

local subsidiaries comply with your guidelines –  Global reporFng is suspiciously similar to reporFng in HQ country –  HQ team doesn’t seem to learn from local teams –  HQ team is cynical about local capabiliFes and other way round –  HQ must pay for rollouts, as subsidiaries don’t see benefit –  There’s no clear line of sight between cost and benefits

•  If such indicators apply, you should take a break and go through steps 1 – 6 of the roadmap before your next rollout


Agenda







•  Wrap-‐up


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Resources

•  Geert Hofstede: –  Culture’s Consequences: Interna2onal Differences in Work-‐Related

Values •  Edgar Schein:

–  Organisa2onal Psychology, 3rd ediFon •  Fons Trompenaars and Charles Hampden-‐Turner

–  Riding the Waves of Culture: Understanding Cultural Diversity in Business

•  Julia Balogun et al –  Exploring Strategic Change

•  Vivion Cox on www.iproconhcm.co.uk/papers-‐research.htm –  The Challenge of changing Organisa2onal Culture

•  Newsle.er on change, organizaFonal culture, strategic HCM: –  www.iproconhcm.co.uk/nl


Key Points

•  SAP HCM rollout is nearly impossible without local buy in •  Both sides need to be prepared to change –  In processes and systems –  In aCtudes and mindsets

•  HQ usually underesFmates the complexity of localizaFon •  Cultural awareness is paramount •  Each single rollout needs proper change management – focus on facilitaFng communicaFon!

•  The change kaleidoscope gives you an idea about the complexity of the change effort

•  To minimize cost and risk of a global rollout, get the corporate team ready first
