Sap Hcm With Roi Ppt

Best Practices for Achieving Higher Return on Investment (ROI) g ( )

for Your SAP ERP HCM Implementation

In This Session We’ll Learn …• How to present a Business Case for SAP HCM• How your SAP HR investment can make a difference y• How your organization can prepare to implement HCM • Where you can look to measure sustainable ROI after

go-live

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What We’ll Cover …• Defining the Purpose of Your SAP HCM Initiative• The Business Case for Implementing SAP HCMp g• The SAP HCM ROI Value Proposition: Making Human

Assets the Competitive Advantage• ROI Challenges and Risk Mitigation• Wrap-up

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What Is ROI, Anyway?y yReturn on Investment (ROI) is usually thought of as the ratio of money gained or lost on an investment relative to the amo nt of mone in ested calc lated asthe amount of money invested, calculated as:

(Gain for Investment – Cost of Investment)Cost of InvestmentROI =

Real ROI, however, involves , ,much more than can be captured in this simple calculus

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calculus

Weighing the Costs: Financial and Non-Financial BenefitsBenefits

• Decision makers — both business process owners and IT professionals — naturally tend to look primarily at the p y p yfinancial costs and benefits when considering the employment of a new system

• This means that they may be overlooking those benefits that do notThis means that they may be overlooking those benefits that do not translate into immediate or obvious financial benefits

• But today’s decision makers must also consider these apparently“non-financial” benefits of IT investments when evaluating their potential ROIROI

• In fact, these benefits may provide just the added-value the company needs to thrive in an increasingly competitive environment

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Giving Hard and Soft Benefits Their Actual Weightg g• Grasping the real ROI that comes from implementing

SAP HCM means recognizing and weighing the respective hard (financial) and soft (non-financial) benefits– Hard (financial) benefits are those which are immediatelyHard (financial) benefits are those which are immediately

quantifiable in financial terms– Soft (non-financial) benefits, while no less tangible than financial

benefits are qualitative in nature and so more difficult tobenefits, are qualitative in nature and, so, more difficult to measure

Financial Gains and Benefits• Financial benefits include positive impacts on the

organization’s budget and finances, such as:– Reduction in cost due to elimination of payroll outsourcing

providers– Fewer development and test staff needed for application p pp

customization and integration– Lower annual maintenance and support fees for application

software– Lower administration and support costs for applications and

databases– Reduction or elimination of support fees for mission-criticalReduction or elimination of support fees for mission critical

consulting and professional services

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Financial Calculations• Payback period: The time it will take for the benefits to

pay back the cost of the project • Net Present Value (NPV): The value of future benefits

restated in terms of today’s monetary value I t l R t f R t (IRR) Th b fit• Internal Rate of Return (IRR): Those same benefits restated as an interest rate, indicating how efficient the investment in the project is

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Three Kinds of Soft Benefits: A Balancing Actg• Three basic categories of

soft (non-financial) StrategicBenefits

benefits play a vital role in the true

TechnicalBenefits

BenefitsOperational

Benefitsthe truerealization of ROI

Technical Benefits• Integration with all the other capabilities of SAP Business

Suite• One entry point for employees and managers to access

key information and execute business processesD t• Data accuracy

• Less system downtime (compared to legacy systems)• Integrated PortalIntegrated Portal• SAP HCM is a state of the art HR system

Strategic Benefitsg• Increased SOX compliance thanks to higher data

consistency and transparency• Improved employee morale• Lower turnover• Attrition and retention of best human assets in the

marketplace• Most competitive compensation packages compared toMost competitive compensation packages compared to

competitors

Operational Benefits• Streamlined personnel-administration processes for new

hires, promotions, leaves of absence, and terminations• Reduced effort for Time and Expense entry• Check printing efficiencies• Increased payment consistency• Better access to information• Integrated workflows• Integrated workflows



Laying a Foundation for SAP HCM ROIy g• Form a clear vision of what you want to accomplish

– What are your pain areas?– What are your project goals?What are your project goals?– Take 6-18 months to implement– Deliver payback within 12-24 months after the project start

• Deployments and user adoption take time to accomplish p y p p• Business change needs to occur around the technology

platform• Analyze the impact of the implementation

– What soft benefits were gained?– How did the project costs break down?– Use questionnaires for critical HR business processes — both before and

after HCM implementationafter HCM implementation

Identify the Major Pain Points That Are Costly and I ffi i tInefficient

• IT pain points– Outdated HR system architecture– Heavily customized system requiring upgrade– Limited ability to add functionality

• Business pain points• Business pain points– The need for business innovation while reducing IT costs– The need to improve workforce productivity– The need to ensure compliance controls and proper governance– The need for greater visibility, predictability, and control

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What Are the Pain Points Specific to HR?• Do we manually gather data from different business

areas and use Microsoft Office products for reporting?• Are we able to perform global headcount reporting?• Do we know how many positions and open vacancies

h ?we have?• Do we know what internal talent we have?• Are we in compliance with OSHA for Training?Are we in compliance with OSHA for Training?• Do we have a common employee review process and

the tools to support it?

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What Are the Pain Points Specific to HR? (cont.)( )• How much time do we spend each year processing open

enrollment? • Is there a way to facilitate expense processing?• Do we know if we pay our associates competitively?

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Critical Tasks for Preparing Your Business Caseg• Analyze and prioritize areas that can be improved via SAP

HCM– Manual ProcessesManual Processes– Governance and Compliance– Analytics

• Review your corporate objectives and how SAP HCM can help align the HR Department with that overall strategy

• Study HR best practices and case studies• Align your global business processes• Define the baseline scope for the project

– Countries– Modules

P t l f ti– Portal functions

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Cost Reduction Analysis: An ExampleyProcess Before SAP HCM Description Process with SAP HCM

Headcount Reporting Manual Spreadsheet Reconciliations Global Headcount report

x hours per month Time saved per month???

Time Entry for Factory PersonnelManual Spreadsheet and Paper-based

Approval CATS via Portal with Approval WF

x minutes per week Time saved per week?

Employee Productivity increased by x%?Employee Productivity increased by x%?

New Hire Processing Several Systems PA New Hire Event with WF Automation

x hours per week Time saved per week?

Salary Budgeting and Increases Excel Spreadsheets Compensation Planning

x hours per year Time saved per year?

Cash Flow improved by $$$?

Governance and Compliance Paper Forms, Access DB Various SAP HCM functions

x hours per month Time saved per month?x hours per month Time saved per month?

Compliance improved by x%?

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Business-Case Outcome• Presentation to upper management of all the business

benefits that justify the time, resource, and financial commitment necessary for implementing SAP HCM

• A good business case for SAP HCM should be:A joint effort by HR and IT– A joint effort by HR and IT

– A demonstration of the value that a state of the art HCM system brings to the organizationTh f d ti f ll HR t f ti t t– The foundation for an overall HR-transformation strategy

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HCM Makes HR Your Business Partner, with theFocus OnFocus On …

• Attracting and acquiring talent• Educating and developing talent• Identifying and growing future leaders

Ali i d ti ti t l t• Aligning and motivating talent• Paying for performance

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Foundations of SAP HCM• Core components are

essential pieces of the puzzle

SELF-SERVICEpuzzle

• Encompass day-to-day HR transactions and functions

COMPONENTS

EMPLOYEE LIFECYCLE MANAGEMENT

Training and Events/LSORecruitmentPerformance Management

• Essential that key components are scalable and business

i t l b llTravel Management

I ti d C i i M tEnvironment, Health, and Safety Governance

CORPORATE SERVICES

Training and Events/LSORecruitmentCompensation Management

requirements are globallydefined

Incentive and Commission Management

EMPLOYEE TRANSACTION MANANGEMENT CORE COMPONENTS

Global Payroll Benefits HR Administration — Master DataOrganizational ManagementTime and Attendance

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Organizational ManagementTime and Attendance

Employee Transaction Managementy g

SELF-SERVICE

COMPONENTS


Training and Events/LSORecruitmentC ti M t

Performance Management

Travel ManagementEnvironment, Health, and Safety Governance

CORPORATE SERVICES

Compensation Management



Global Payroll Benefits HR Administration — Master DataGlobal Payroll Benefits HR Administration Master DataOrganizational ManagementTime and Attendance

Employee Transaction Management (cont.)y g ( )• Employee Transaction Management lowers the costs of

compliance and employee administration– Employee administration

Employee Employee LifecycleLifecycle

– Employee administration• Supports all basic

processes related to personnel management

Time and PayrollTime and PayrollCapturingCapturing

E lE l

p g– Employees and

management always have instant access to up-to-date and complete information EmployeeEmployee

DevelopmentDevelopmentinformation

– Organizational management• Supports key processes

for managing the g gorganizational structure

Employee Transaction Management (cont.)y g ( )• Benefits management

– Supports diverse plan definitions and automatically tailors benefit offers to individual employees

• Time and attendance management– Provides convenient tracking monitoring record keeping andProvides convenient tracking, monitoring, record keeping, and

evaluation of time data

• PayrollH dl l ll d t l l– Handles complex payroll processes and supports legal regulations for more than 50 countries worldwide

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Corporate Services

SELF-SERVICE

COMPONENTS





CORPORATE SERVICES





Corporate Services (cont.)( )• Travel and Expense Management

– Streamlines the booking of travel, the processing of expense reports, and settlement process

– Ability to implement travel policies and control travel budgets globally, ensuring compliance

• Incentive and Commission Management– Implement variable pay schemes

Ability to align incentives and commissions with business– Ability to align incentives and commissions with business objectives

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Corporate Services (cont.)( )• Environment, Health, and Safety

– Ability to manage risk and comply with government regulations– Solution integrates a variety of environment, health, and safety

functions

• GovernanceGovernance– Unifies corporate strategy, control initiatives, opportunity

discovery, and loss mitigation across the enterprise Allows processes and strategies to be evaluated within the– Allows processes and strategies to be evaluated within the company and extended to partners, suppliers, and customers

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Employee Lifecycle Managementy y g

SELF-SERVICE

COMPONENTS





CORPORATE SERVICES





Employee Lifecycle Managementy y g• Recruiting and talent management

– Attrition of the most qualified human assets in the marketplace• Attracting and acquiring talent

Solution

Attracting and acquiring talent• Enterprise learning management

– The Learning Solution enables the effective administration of business and learning processes and supports both e-learning and classroom trainingclassroom training

• Educating and developing talent• Performance management

– Alignment of workforce with organizational objectives– Alignment of workforce with organizational objectives– Management-by-objective documents can be linked directly to

performance reviews, appraisals, and compensation administration • Identifying and growing future leaders• Aligning and motivating talent

Employee Lifecycle Management (cont.)y y g ( )• Compensation management

– Allows the implementation of innovative reward strategies, such as performance- and competency-based pay, variable pay plans, and long-term incentives reward programs

• Retention of talented employeesp y• Paying for performance

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Self-Service Components

SELF-SERVICE

COMPONENTS





CORPORATE SERVICES





Self-Service• Manager Self-Service (MSS)

– Managers obtain the information and applications they need to perform budget and staffing tasks quickly and efficiently

• Employee Self-Service (ESS)– Employees are provided with easy access to the information andEmployees are provided with easy access to the information and

applications related to their employment

• The application enables employees to create, i d dif l d t dview, and modify personal data and manage

routine HR tasks —anytime, anywhere

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Real-Time People Analyticsy• SAP delivers unmatched HCM reporting

– Standard reports– Queries

• SAP QueryAd H Q• Ad Hoc Query

– Business Warehouse/Business Intelligence

• Over 200 predefined HCM queriesp q• Over 300 HCM key figures• 100 templates for standard calculation• 29 HCM-specific information cubes

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HCM Is Integrated with Other ModulesgPayroll Results AccountingAccounting

HCMHCMEmployee Master DataOrganizational Management

Controlling Master Data

Payroll

HR Master Data

Time and Attendance

Time and AttendanceLogisticsLogistics CATSCATS SalesSalesLogisticsLogistics CATSCATS SalesSales

SAP HCM Integrationg

Source: SAP



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ROI Challenge #1: Implementation Costs g• Scope Control

– Focus on “biggest bang for your bucks”– Adopt a phased rollout approach

• Customization ControlAdopt common processes– Adopt common processes

– Design a global template– Keep ABAP specifications to a minimum

• Software, servers, and licenses – Do not buy licenses for functionality that as a business you

cannot roll out in the foreseeable future

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ROI Challenge #1: Implementation Costs (cont.)g ( )• Expertise of your Integrator

– Within HCM and within your industry– Interview the consultants– Review the proposed project methodology and approach– Ask for referencesAsk for references

• Project Management Controls– Project plan with milestones Client

Issue– Weekly PMO meetings– Weekly status reports– 24-hour decision-making policy

Issue

g p y

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ROI Challenge #2: Poor User Acceptanceg• The Role of Change Management

– Everyone affected by the implementation should recognize how SAP HCM will improve their operations

• More gain than pain • Training• Training

– Train the Project Team prior to project start – Insist on ongoing knowledge transfer so that you can handle the

t t lisystem post-go-live– Have your super users train the end users

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ROI Challenge #3: Cost of Ownership and M i tMaintenance

• Cost of Ownership can be reduced by:L i b ildi d k i i h t l t– Leveraging, building, and keeping your in-house talent

– Establishing centers of excellence to share knowledge– Adopting standardization– Simplifying your system landscape– Implementing rigorous change controls

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Do Your Homework Prior to Project Start!j• Identify most suitable Project Team members

– Analytical skills– Technical skills– Project management skills– Go getter attitudeGo getter attitude

• Training– A trained Project Team can be more productive from day one!– Make a sandbox environment available

• Infrastructure– Plan for your hardware requirements and sizing!Plan for your hardware requirements and sizing!

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Preparing Your Implementation Strategyg gy• Design an SAP HCM implementation strategy, tailoring its

building blocks to your organization’s unique needs • Use your business case as a guide to design its scope• Use your business case as a guide to design its scope,

distinguishing between …– Critical functionality– Nice-to-have functionalityNice to have functionality

• Carry out a risk assessment to identify your readiness for SAP HCM– Do we have the right resources?g– Are we motivated enough for this effort?– Do we have executive sponsorship and endorsement?– Is this project consistent with our organization’s goals? – Will this initiative improve our competitiveness?

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Implementing Best Practices During the Projectg g j• Insist on ongoing knowledge transfer• Stay within scopey p• Use KPIs• Design your support organization

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SAP HCM Return on Investment (ROI)( )• Where to look for ROI after go-live:

– A shift within HR from highly administrative tasks to more strategic ones

– Improved decision making through the delivery of accurate, real-time employee metrics

– Lower costs and risks of noncompliance issues– A reduction in turnover due to fair, accurate, and known

performance management practicesp g p– The elimination of non-performers– Self-Service components transforming paper-based manual

processes into highly automated processesprocesses into highly automated processes

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Self-Service Components

SELF-SERVICE

COMPONENTS





CORPORATE SERVICES







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Resources• SAP White Paper, mySAP ERP Human Capital Management

– Human Capital Management — A Measurement Breakthrough on the Horizon

• www.sap.com/solutions/business-suite/erp/pdf/BWP _WP_Human_Capital_Management.PDF

• Top 10 Reasons to choose SAP ERP Human Capital MManagement – http://www.sap.com/community/pub/showdetail.epx?itemID=8727

• Requires free registration SAP C St d• SAP Case Study– mySAP ERP HCM: ROI Analysis — SAB Limited

• www.sap.com/solutions/business-suite/erp/pdf/CCS SAB Limited pdf

Whereto

FIND itsuite/erp/pdf/CCS_SAB_Limited.pdf

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7 Key Points to Take Homey• Define the purpose of your SAP HCM initiative• Estimate the total costs and benefits to be gained — both

h d (fi i l) d ft ( fi i l)hard (financial) and soft (non-financial)• Evaluate the time savings due to newly engineered processes

and automation tools• Study SAP HCM best practices and case studies• Adopt common processes and avoid customizing SAP HCM

to accommodate company practices • Choose your consulting firm carefully — always asking for

references• Monitor ROI post-go-livep g

Contact Us

Kristin SchusterBusiness Development Manager

(704) 556-2288info@symphony-consulting.comwww.symphony-consulting.comwww.symphony consulting.com

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Sap Hcm With Roi Ppt