Capitalizing On Consolidation: Taking Shared Services To The Next Phase

With the benefits of shared services now widely realized, it's time for savvy HR departments to move onto the next phase.

Centralization and consolidation are now delivering even greater efficiencies - and in many cases savings - to those which have a clear vision and implement their program well.

From Boehringer Ingelheim to Kellogg's, companies and their employees are benefitting from centralized HR services, and allowing their HR departments to act as genuine business partners.

Reasons for HR Consolidation

Prior to the implementation of the shared services center,  Anne Paterra, senior director of HR Shared Services Operations, Kellogg Company, highlighted three key issues which the program was intended to address.

Firstly, the company was faced with unreliable data which was not consistent between borders, secondly this led to a lack of confidence in making decisions based on the data, and finally the company was faced with highly-customized technology that was often out of date, she explained in a previous interview.

Mary Borba, Boehringer Ingelheim's vice president of compensation and benefits, highlighted similar issues when the company turned to Watson Wyatt to improve its HR service delivery.

"While team members worked hard to support the company, they lacked the critical mass, training and HR tools they needed to be successful.

"We also struggled with widespread HR data errors and inconsistent responses to employee questions as a result of decentralized data entry and customer service," she explained.

For both companies, the answer was to centralize HR functions, offering employees a single stop where they could access HR information and providing a strong database of HR information on which to base decisions. Boehringer Ingelheim estimates its center will also save it in the region of $1 billion annually.

However, these changes did not occur overnight. Paterra highlighted that data integrity is particularly slow to improve and the shift to 100 percent self service initially was "short-sighted".

Centralization can also in some cases mean the loss of employees, and this presents a particular change management challenge for HR departments.

Making the Transition to Centralized HR

In Boehringer Ingelheim's Towers Watson case study, Borba offers a number of key points to take into account when undertaking a centralization project – and much of this revolves around finding the right talent to support the transition.

The project requires skilled staff from the outset, who are offered the right training and hail from a number of departments within the company.

"Invite multiple partners within the organization to join the project team to make sure you have broad representation," Borba advised.

Once the project is up and running, it is essential the correct metrics are defined to ensure improvements are being measured and any flaws are identified.

Paterra highlighted how Kellogg's employs an internal scorecard and customer report card, as well as a quarterly customer satisfaction survey to determine progress.

"We’re continually modifying our internal scorecard as we try to focus on the right metrics to capture. You don’t want to measure things if they drive the wrong behavior, so you have to be really, really careful about that," she explained.

Looking ahead, technology is set to play a greater role in the deployment of shared services and centralization of HR, with market forces backing this, particularly in the field of talent acquisition.

GlaxoSmithKline (GSK), for example, recently employed Lumesse TalentLink solutions in China to link 28 recruiters, more than ten HR business partners and ten agencies across the Greater China region.

Blake Cai, recruitment and HRIS manager, HR Shared Services, GSK Greater China, explained the companies' recruiters needed to change to keep up with the rapidly evolving business.

"What worked in the past with isolated spreadsheets will now be replaced with a single, regionally-shared talent acquisition platform that provides better information transparency and standardized workflows.

"We believe that the better data integrity, accuracy, and analytical reports that have come after the change have genuinely improved the shared-service team's working lead time, cost, and service delivery and made it a better partner with the GSK business.”

About Enwisen Resource Center

Enwisen is the leader in Software-as-a-Service solutions that help employers provide better HR Service Delivery – with fewer resources and lower costs. Enwisen's HR Service Delivery Suite includes solutions for HR Shared Services, including a personalized, searchable HR Portal/Knowledgebase and HR Case Management tool; Onboarding; and Total Rewards.  Enwisen's HR Portal/Knowledge also is used by many employers as its employee portal, or deployed in conjunction with tools such as SharePoint to create and maintain effective HR portals.

Hundreds of employers have utilized Enwisen's HR Service Delivery and HR Shared Services solutions to apply a multi-tiered approach to HR Service Delivery (for more information on this approach see the Multi-Tier whitepaper here in the Resource Center) to transform HR – realigning resources and saving hard dollars.  According to Gartner's 2008 “Multi-Tier Approach to HR Service Delivery” report, employers deploying this approach can reduce their HR Service Delivery costs by 20-50 percent.

Enwisen has produced measurable results for employers of all sizes and industries, including Unisys, Nissan North America, Hershey Entertainment & Resorts, Embry Riddle University, Fox Entertainment, ConAgra Foods and more.