hcm sample report

HCM Benchmarking Results

SAP Value EngineeringDecember 16, 2010

ABC Company

SAP CONFIDENTIAL - - For subject Company Internal Use Only - This page is from the Benchmarking Analysis prepared for the subject Company and subject to the terms,conditions and assumptions contained in the Benchmarking Analysis. Information contained herein is not a guarantee of future results, performance or cost savings.

Statement of Confidentiality and Exceptions

The information and analysis contained herein are the confidential and proprietary materials ofSAP AG. No part of this publication may be reproduced or transmitted in any form or for anypurpose without the express written permission of SAP AG. The information contained hereinmay be changed without prior notice.

The furnishing of this document shall not be construed as an offer or as constituting a bindingagreement on the part of SAP AG and/or its affiliated companies (“SAP”) to enter into anyrelationship. SAP provides this document as guidance only to illustrate estimated comparisonsbetween the subject Company and other companies with respect to certain key performanceindicators and drivers.

These materials may be based upon information provided by the subject Company, informationprovided by other companies and assumptions that are subject to change. These materialspresent illustrations of potential performance and cost savings, and do not guaranty futureresults, performance or cost savings. The materials are provided solely for internal review anduse by the subject Company. SAP makes no representation or warranties of any kind withrespect to these materials, and SAP shall not be liable for errors or omissions with respect tothese materials.


1. Executive Summary2. Detailed Benchmarking Results3. Case Studies4. Appendix

Agenda


ASUG/ SAP Benchmarking: Designed to GetActionable Results

Launched end of 2004 as a forum to exchange metrics and bestpractices

Program covers 26 processes, with 5000+ participants who leveragethe program to:

Build a business case for change

Compare performance to leading companies, industry peers, andbetween regions/ divisions

Assess value realization, year-over year

Prove success

Human Capital Management program launched end of 2005

Over 500 participants to date


11%

41%

20%

25%

4%

<1,000 >=1,000, <5,000 >=5,000, <10,000 >=10,000,<50,000

>=50,000

Participating Company Profile: Industry andEmployees – Overall Database

By Employees

By Industry Sector Utilities

13,339

Number of Companies in the HCM Overall Database: 553

Company Response:

Company Response:

By Revenue Company Response: 13,627.0 M

35%41%

10%14%

<1B >=1B,<5B >=5B,<10B >=10B

Peer Groups Selected NPrimary Peer Group (P1) Utilities in NA & EMEA 38

Secondary Peer Group (P2) Companies with employees between 10K & 50Kin NA & EMEA

951%

2%

2%

3%

4%

4%

4%

5%

5%

5%

7%

7%

7%

8%

8%

9%

17%

Telecom

Automotive

Aerospace & Defense

Life Sciences

Public Sector

Healthcare

EC&O

Service Providers

Chemicals

IM&C

Oil & Gas

Financial Services

Utilities

Retail

Consumer Products

High Tech

Others

Note: Several miscellaneous industries have been grouped under “Others”


KPI Benchmark Performance Potential Benefit (in millions3)

Employee Turnover (in %)4

Employee Engagement(1 = low, 10 = high) Higher Employee Productivity

Employees per HR FTE

HR Costs per Employee

6.8 4.8

Benchmarking Results and Value Potential:Benefits Range1 of

Bottom 25% Average Top 25%




Performance of Primary KPIs2 and Potential Benefits (in millions of selected currency)

Benefit of Closing Gap to Top 25%

Benefit of Closing Gap to Average

1) Only staffing related benefits (line 1 & 3 of above chart) are counted in the overall benefits range, total HR costs per employee (line 4 of above chart) were excluded to avoiddouble counting. Benefits totals may not add up exactly from subtotals displayed on this page as they are calculated based on exact, not rounded numbers

2) Note: Only most critical HCM KPIs are listed, performance against additional secondary KPIs can be found in the detailed benchmarking assessment3) All currency in this report is in U.S. Dollar4) For Turnover, potential benefit was calculated by closing the gap to average and to one fifth of first quartile. It was calculated by using replacement cost estimate which are

typically estimated to range between 50% and 200% of an employee’s salary; 50% were assumed for above calculation; average cost per HR FTE is used as an estimate foraverage salary per employee

3.0

6.96.0 7.06.7

5.0

62 9071

3,194 1,2071,760

65

1,252

0.0 - 8.0

1.0 - 3.3

0.0 - 0.6

1.0M - 11.3M

0.0

1.0

0.0

0.6

3.3

8.0


Develop ahighperformingorganization

Alignworkforcewith businessneeds

Streamline,automate andintegrate HRprocesses

Organize forscale andleverage

Recommended Improvement Strategies

EmployeeEngagement

HR Costs perEmployee

EmployeeTurnover

Employees per HRFTE

0.0 0.6

1.0 3.3

Recommended Improvement Strategies and Current Capabilities

0.0 8.0

Align incentives with performance objectives with corporate goals

Drive performance management framework into organization

Implement training programs that develop the workforce in line organizationalobjectives

Create enterprise wide visibility into workforce availability and gaps

Establish accurate closed loop workforce planning process

Strengthen recruiting and talent relationship management processes

Standardize processes across all BU's/ globally

Reduce manual entries with simplification and automation

Integrate processes within HCM as well as outside

Reduce HR transactional work by driving self service to maximum adoption

Leverage Shared Services for routine HR transactions and compliance functions(e.g. payroll)Leverage analytics to identify performance improvement opportunities

Benefit of Closing Gap to Top 25%(in million currency)

Benefit of Closing Gap to Average Top 25% performance for supporting best practices and KPIsBetween average and top 25% performance for supporting best practices and KPIsStrategies to focus: below average performance for supporting best practices, KPIs


Supporting Best Practices

Best Practices To Help Close the Gap

Level 1 Strategy Process Abbreviated Best Practices

Develop a highperformingorganization

Compensation Planning

Variety of job pricing activities are supported

Impact of compensation plan changes on business model analyzed

Ability to enable classification of new positions for compensation purpose

HR Strategy andLeadership Balanced Scorecard framework integrated in departmental and individual performance appraisals

Training andDevelopment Automated reports available to assess training effectiveness

Align workforcewith businessneeds

Recruiting Automated analysis and reporting capabilities to measure source effectiveness

Streamline,automate andintegrate HRprocesses

CompensationAdministration

Direct link between job description preparation and job evaluations are available online

Job descriptions and job evaluations are available online


HR Strategy andLeadership Automated reports and analytics available for process and operational efficiency improvement


SAP Solutions to Enable High-Impact Value Strategies

Recruit Onboard Measure Performance Succession Learning

Build the WorkforceBuild the Workforce

Create a High Performance Culture

Drive Efficient OperationsDrive Efficient Operations

Automate Global HR and PayrollAutomate Global HR and Payroll

Targeted areas for high-impact improvement

Optimize

Develop ahighperformingorganization

Alignworkforcewithbusinessneeds

Streamline,automateand integrateHRprocesses


Supporting SAP Solutions



Agenda


Type Metric CompanyPeer Group P1

(n =Peer Group P2

(n =

Average Top 25% Average Top 25%

Effectiveness

Employee Engagement(1-low, 10-high) 6.9 6.7 7.0 7.2 8.0

Employee Turnover (in %) 5.0 4.8 3.0 10.7 5.0

Employees Trained (in %) 53.0 76.2 100.0 73.8 100.0

Payment Errors (in %) 0.01 1.00 0.01 1.30 0.13

Time Spent by Managers on Employee Administration(in %) 10.0 10.9 5.0 11.7 5.0

Efficiency

Employees per HR FTE 65 71 90 117 173

HR Cost per Employee 1,252 1,760 1,207 1,809 610

HR Staff Allocated to Transactional Activities (in %) 40.1 45.1 35.2 40.4 29.9

Time to Hire (in days) 57 60 40 49 25

Performance Indicator Summary

38) 95)

First QuartileBetween Average and First QuartileBelow Average OutlierRanking:

Note: Color commentary based on the Peer Group P1 benchmarks unless mentioned otherwise


45.1%39.6% 40.1%

48.0% 53.9% 49.6%

6.9% 5.7% 10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Average Average Company

Transactional Expertise Based Strategy

HR Staffing Mix (% of HR FTEs by type)

KPI: Staffing Levels and Staffing Profile

7190

117

173

65

Average Top 25% Average Top 25% Company

Employee per HR FTE

HR FTEs per 1,000 Employees - Expertise/ StrategicFunctions

5.94.1 4.8

2.3

7.3


4.9

3.1 3.01.6

4.9


HR FTEs per 1,000 Employees - TransactionalFunctions

Peer Group P1 Peer Group P2

Peer Group P1 Peer Group P2 Company


594429

640

240

555


62.9% 63.0%73.1%

14.1%22.7%

16.3%11.8%

6.8% 0.0%11.2% 7.5% 10.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Average Average Company

Personnel Cost External Spend Technology Cost Other Costs

HCM Cost Breakdown (% of total HR costs)

KPI: HR Costs

HR Cost per Employee - Expertise/ StrategicFunctions

443

280378

110

382


HR Cost per Employee

HR Cost per Employee - Transactional Functions

1,760

1,207

1,809

610

1,252


Peer Group P1 Peer Group P2

Peer Group P1 Peer Group P2 Company



KPI: Number of HR FTEs per 1,000 Employees

Area Sub ProcessesCompany’s HRFTEs per 1,000

Employees

Peer Group P1 HR FTEs per1,000 Employees

Peer Group P2 HR FTEs per1,000 Employees


Strategy HR Strategy and Leadership 1.3 1.0 0.3 0.4 0.2

Expertise

Compensation and Benefits Planning 0.4 0.3 0.2 0.2 0.1

Recruitment and Staffing 1.8 1.6 1.1 1.2 0.5

Training and Development 1.6 1.1 0.5 0.9 0.4

Employee and Labor Relations 2.2 1.4 0.6 0.9 0.3

Transactional

Compensation Administration 0.7 0.8 0.5 0.4 0.2

Benefits Administration 1.4 1.5 0.7 0.5 0.2

Pension or Superannuation PlanAdministration 0.7 0.4 0.2 0.2 0.1

Personnel Data Management 0.6 1.0 0.6 0.8 0.3

Payroll Management 0.7 0.9 0.5 0.8 0.5

Time and Attendance 0.8 0.6 0.2 0.4 0.1

Note: Numbers may appear to be same as they have been rounded off; however coloring is based on actual numbers without rounding off



KPI: HR Cost per Employee

Area Sub ProcessesCompany’s HR

Cost perEmployee

Peer Group P1 HR Cost perEmployee

Peer Group P2 HR Cost perEmployee


Strategy HR Strategy and Leadership 98 83 28 77 16

Expertise

Compensation and Benefits Planning 71 47 27 64 23

Recruitment and Staffing 123 146 85 149 76

Training and Development 124 132 35 128 59

Employee and Labor Relations 140 193 112 119 37

Transactional

Compensation Administration 47 73 43 36 11

Benefits Administration 114 103 51 79 24

Pension or Superannuation PlanAdministration 75 46 26 26 9

Personnel Data Management 36 112 73 75 19

Payroll Management 60 85 9 86 28

Time and Attendance 50 52 30 31 7

Note: Numbers may appear to be same as they have been rounded off; however coloring is based on actual numbers without rounding off


HCM: Improved Best Practices AdoptionDrives Value

4.84.5

4.3

5.0

4.5

5.0

4.0 4.0

5.0

3.0 3.0

1.5

1.0

2.0

2.52.8

1.3

2.5 2.73.0

2.8

3.3

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

5.5

6

HR Strategy andLeadership

Compensationand Benefits

Planning

Recruitment &Staffing

Training &Development

Employee andLabor Relations

CompensationAdministration

BenefitsAdministration

Pension orSuperannuation

PlanAdministration

Personnel DataManagement

PayrollManagement

Time &Attendance

Average Coverage Top 25% Coverage Company Importance Company Coverage

Company Best Practice Importance Compared to Coverage Contrasted Against Peer Responses (Peer Group P1)1 = No Coverage5 = Full Coverage


Best Practice Listing CompanyInternal Gap

1

HR system allows for a Balanced Scorecardframework which is integrated into department andindividual performance appraisal documents andwhich supports benchmarking and continuousimprovement

4

2

HR system has automated reporting and analysiscapabilities to identify which processes need toimprove operational efficiencies, data accuracy andtimeliness, and costs

4

3

HR system allows to analyze workforce data; design,implement and monitor corporate strategies tooptimize the workforce; and continuously evaluatehow various courses of action might affect businessoutcomes

2

4

HR system enables HR professionals to develop costeffective resource strategies, by supporting accurateplanning process, allowing monitoring of actualperformance relative to plan and allowing simulationof multiple planning scenarios with analysis of thefinancial impact of headcount changes

3

0

1

2

3

4

5

6

1 2 3 4Average Coverage Top 25% Coverage

Company Importance Company Coverage

Strategy and Leadership

Best Practice Ranking – Peer Group P1 1 = No Coverage5 = Full Coverage

First QuartileBetween Average and First QuartileBelow AverageCoverage Ranking:

Coverage Ranking:

Best Practices for HR Strategy and Leadership: Impact on Employee Engagement and Employee TurnoverBest Practice Adoption/ Employee Engagement (1 = Low, 10 = High)HR system allows for a Balanced Scorecard framework which is integrated into department andindividual performance appraisal documents and which supports benchmarking and continuousimprovement

7.56.9+9%

Low High

Best Practice Adoption/ Employee Turnover (in %)HR system enables HR professionals to develop cost effective resource strategies, by supportingaccurate planning process, allowing monitoring of actual performance relative to plan and allowingsimulation of multiple planning scenarios with analysis of the financial impact of headcount changes

10.4%15.9%-34%

Low High



Compensation and Benefits Planning

0

1

2

3

4

5

6

1 2 3 4 5 6 7Average Coverage Top 25% Coverage



1

Compensation system supports a variety of job-pricingactivities, including performing salary surveys, importing joband salary data from salary survey providers, salarybenchmarking, assessing market data, and definingmarket-based standards

4

2Compensation planning system has automated analysisand reporting capabilities to model the impact ofcompensation plan changes on the overall business model

4

3Compensation planning system supports standardized jobevaluation criteria to enable rapid classification of newpositions for compensation purposes

4

4

Compensation planning system integrates information fromsales-processing and financial systems with customerrelationship management (CRM), channel partner, andsales automation systems, to identify and reward salesperformance that is strategically important to the business

-

5 Benefits planning system is integrated with HR/payrollsystem 3

6Benefits planning system leverages general planinformation across plans; no re-keying of plan informationnecessity

3

7

Benefits planning system has automated analysis andreporting capabilities to model the impact of benefits planchanges on the overall business model, and to benchmarkthe company's overall healthcare cost

3

Coverage Ranking:


Best Practices for Compensation and Benefits Planning: Impact on Process Efficiencies

Best Practice Adoption/ Compensation and Benefits Planning Cost Per Employee ($ ‘000)

Compensation planning system supports standardized job evaluation criteria to enable rapidclassification of new positions for compensation purposes 45.975.1

-39%Low High


Recruitment and Staffing

0

1

2

3

4

5

6




1External and internal applicants are able to placethemselves in a talent pipeline according to their owninterests or goals

2

2

Hiring managers have comprehensive recruiting self-service, including the ability to create and submit jobrequirement profiles for approval; use approval workflowsfor requirements profiles; view candidate short lists andprofile and application data; and respond toquestionnaires about candidates

1

3

Recruiting systems automates applicant/ candidateadministration, with interview invitation, rejection lettersand standard offer letters generated automatically basedon standard templates, and interview assessmentscompleted and tracked online

2

4Recruiting system has automated analysis and reportingcapabilities to analyze the talent pool and to measuresource effectiveness

4


Coverage Ranking:

Coverage Ranking: First QuartileBetween Average and First QuartileBelow Average

Best Practices for Recruitment and Staffing: Impact on Time to Hire and Process EfficiencyBest Practice Adoption (Retail Companies)/ Time to Hire (Days)External and internal applicants are able to place themselves in a talent pipeline according to their owninterests or goals 26.133.3

-21%Low High

Best Practice Adoption (Oil & Gas Companies)/ Time to Hire (Days)

External and internal applicants are able to place themselves in a talent pipeline according to their owninterests or goals 33.841.0

-18%Low High

Best Practice Adoption (High Tech Companies)/ Recruitment and Staffing HR FTEs per 1,000EmployeesHiring managers have comprehensive recruiting self-service, including the ability to create and submit jobrequirement profiles for approval; use approval workflows for requirements profiles; view candidate short listsand profile and application data; and respond to questionnaires about candidates

2.83.5-19%

Low High


Training and Development

0

1

2

3

4

5

6

1 2 3 4

Average Coverage Top 25% Coverage



1Simple content authoring processes are in place;learning system allows separate views for subjectmatter experts and instructional designers

0

2

Learning system has automated reports available toassess training effectiveness by correlating corporateKPIs with training results (e.g., sales increases withsuccessful sales training completion, technicaltraining with machine down time/ workers comp)

4

3

Regular evaluation of employee development andtraining needs performed as part of performanceappraisal process; system automatically pushescourse offerings to employees based on their jobrequirements or performance gaps; automatic updateof employee

3

4

Learning system allows for streamlined processing offollow up activities, such as confirmation of learner'sparticipation, test results, competency & proficiencyresults and provides validation with digital signaturesfor approval

3


Coverage Ranking:


Best Practices for Training and Development: Impact on Employee Engagement

Best Practice Adoption/ Employee Engagement (1 = Low, 10 = High)Learning system has automated reports available to assess training effectiveness by correlatingcorporate KPIs with training results (e.g., sales increases with successful sales training completion,technical training with machine down time/ workers comp)

7.67.0+9%

Low High

Best Practice Adoption/ Employee Engagement (1 = Low, 10 = High)Regular evaluation of employee development and training needs performed as part of performanceappraisal process; system automatically pushes course offerings to employees based on their jobrequirements or performance gaps; automatic update of employee

7.36.8+8%

Low High


Employee and Labor Relations

0

1

2

3

4

5

6




1

HR system supports organization structure, enablesHR professionals to simulate, analyze, andexperiment with proposed organizational changes,and allows mass changes across positions ororganizations

2

2

The Employee Service Center system provides formonitoring of key performance metrics such asaverage process execution cycle times, percentage ofspecialists in execution time, errors by process andmonitoring of self-service usage

2

3HR system allows to monitor and track grievancesand arbitrations 0

4

Line managers have online access to bargainingupdates and policies/ procedures; and receive aprompt if significant changes arise which may impacttheir day to day business

3


Coverage Ranking:


Best Practices for Employee and Labor Relations: Impact on Cost Per Employee and Process Efficiencies

Best Practice Adoption/ Employee and Labor Relations Cost Per Employee ($ ‘000)

The Employee Service Center system provides for monitoring of key performance metrics such asaverage process execution cycle times, percentage of specialists in execution time, errors by processand monitoring of self-service usage

69.4103.4-33%

Low High

Best Practice Adoption/ Employee and Labor Relations HR FTEs per 1,000 Employees

HR system allows to monitor and track grievances and arbitrations 1.51.9-20%

Low High


Compensation Administration

0

1

2

3

4

5

6

1 2 3Average Coverage Top 25% Coverage



1Direct link between job-description preparation andjob-evaluation process 4

2 Standardized job descriptions and job evaluations areavailable online 4

3

Compensation system provides comprehensivesupport for displaying and editing employeecompensation-related data, activating planned andapproved compensation adjustments, andtransmitting the information to payroll

3


Coverage Ranking:


Best Practices for Compensation Administration: Impact on Process Efficiencies

Best Practice Adoption/ Compensation Administration HR FTEs per 1,000 Employees

Standardized job descriptions and job evaluations are available online 0.60.8-22%

Low High


Benefits Administration

0

1

2

3

4

5

6

1 2 3 4




1

Benefits system enables employees to enroll online,and allows them to modify details of the benefits planand to update information regarding dependents andbeneficiaries, including tests for eligibility

3

2 Single point-of-contact established for all benefitsrelated questions 0

3Benefits system enables employees to check currentenrollment in benefits plans, and print confirmationstatements and forms online

0

4Benefits system allows employees to model differentbenefits elections and their effect on net pay 3


Coverage Ranking:


Best Practices for Benefits Administration: Impact on Process Efficiencies

Best Practice Adoption/ Benefits Administration HR FTEs per 1,000 Employees

Single point-of-contact established for all benefits related questions 0.800.84-5%

Low High


Pension or Superannuation PlanAdministration

0

1

2

3

4

5

6

1 2 3




1 All plan participants, including retirees and formeremployees, have online access to the plan 2

2 Single point-of-contact established for all pension andsavings plan related questions 1

3Data exchange with third-party administrators fullyautomated, with access to key data via shareddatabases

0


Coverage Ranking:


Best Practices for Pension or Superannuation Plan Administration: Impact on Process Efficiencies

Best Practice Adoption/ Pension Plan Administration HR FTEs per 1,000 Employees

All plan participants, including retirees and former employees, have online access to the plan 0.40.6-21%

Low High

Best Practice Adoption/ Pension Plan Administration HR FTEs per 1,000 Employees

Single point-of-contact established for all pension and savings plan related questions 0.40.5-24%

Low High



Personnel Data Management

0

1

2

3

4

5

6

1 2 3 4 5 6




1

One integrated data repository used for all employeeinformation (demographic, dependent, beneficiary,payroll) which is shared between Human Resourcesand Payroll

1

2

HR system is integrated with ERP and other key nonHR system to allow for end to end processes (e.g.,asset management system, financial systems, CRMsystem)

2

3 Online employee self-services are provided in aconsistent and easily navigated manner 2

4 Data validated for accuracy and completeness at thetime of data entry 3

5

Majority of HR services, such as creation ofrequisitions, new hire entry, change of salary request,request for separation can be initiated by managersonline and entered in a simple format

3

6

Self-services for managers are organized, with keyperformance metrics pushed out, alerts for issuesnotification, work triggers, reminders and notificationof unexpected events

3

Coverage Ranking:


Best Practices for Personnel Data Management: Impact on Cost Per Employee and Process EfficienciesBest Practice Adoption/ Cost Per Employee ($ ‘000)Majority of HR services, such as creation of requisitions, new hire entry, change of salary request,request for separation can be initiated by managers online and entered in a simple format 1,0551,490

-29%Low High

Best Practice Adoption/ HR FTEs Per 1,000 Employees

Self-services for managers are organized, with key performance metrics pushed out, alerts forissues notification, work triggers, reminders and notification of unexpected events 12.813.9

-7%Low High


Payroll Management

0

1

2

3

4

5

6

1 2 3 4




1 Online access to direct deposit advices and pay slip 1

2Payroll system supports legal regulations for a largenumber of countries ensuring compliance withregulatory requirements for reporting purposes

0

3 Payroll system supports multiple currencies, multiplelanguages, collective agreements, and reporting 0

4 Single point-of-contact established for all payrollrelated questions 0



Coverage Ranking:

Best Practices for Payroll Management: Impact on Process Efficiencies

Best Practice Adoption/ Payroll Administration HR FTEs Per 1,000 Employees

Payroll system supports multiple currencies, multiple languages, collective agreements, andreporting 1.01.4

-24%

Low High

Best Practice Adoption/ Payroll Administration HR FTEs Per 1,000 Employees

Single point-of-contact established for all payroll related questions 1.11.3-9%

Low High


Time and Attendance

0

1

2

3

4

5

6

1 2 3 4




1 Web enabled time administrator tool in place 0

2 Time worked routed automatically to projectaccounting/ resource planning systems -1

3Time and attendance system has automated analysisand reporting capabilities to analyze KPIs such as losttime, productivity, cost of absence, overtime or illness

0

4 On-line and off-line time entry is available 0


Coverage Ranking:


Best Practices for Time and Attendance: Impact on Cost Per Employee and Process Efficiencies

Best Practice Adoption/ Time and Attendance Cost Per Employee ($ ‘000)

Web enabled time administrator tool in place 38.773.1-47%

Low High

Best Practice Adoption/ Time and Attendance HR FTEs Per 1,000 Employees

Time worked routed automatically to project accounting/ resource planning systems 0.51.1-50%

Low High



Agenda


HCM – Successful Customers


Applera Corporation Implements SAP ERP HCM

“Now we can deal with issues on an exception basis,which allows us to focus on more important tasks suchas recruiting and retaining good people.”

Paul ArataVice President, HR and Site Services, Applera Corporation

Company Applera CorporationLocation Norwalk, ConnecticutIndustry Life sciencesRevenue US$1.9 billion (2006 gross)

Employees 5,400

Web Site www.applera.com; www.celera.comwww.appliedbiosystems.com

SAP® Solution andServices

SAP® ERP Human Capital Managementsolution

Implementation Partner Andersen Consulting

Challenges and OpportunitiesInconsistent processes between divisions and regionsIneffective, paper-based human capital management (HCM)processesOutdated IT and inadequate reporting capabilitiesLimited manager access to employee informationInconsistencies due to multiple interfacesInability to integrate HCM processes with financeLack of visibility into employee training and development

Implementation HighlightsStrong support from executive leadership and managementConsistent implementation with phased deployments by regionInitiation of change management prior to introducing the newsystemGradual adoption of new processes to ease user transitionComprehensive training for users and IT staffLong-term HR strategy

Why SAPScalable functionality; support for corporate growthAbility to meet global and multilingual needsSeamless integration with existing SAP® softwareSAP’s proven track recordApplera’s previously successful relationship with SAP and itsconfidence in the vendor’s HCM solution

BenefitsIncrease in strategic portion of HR project budget (from under25% to 70% of budget)Clear and consistent reporting due to tight integration betweenfinance and HRBetter use of workforce dataSupport for growth – without needing additional HR full-timeequivalentsHigh level of employee satisfaction due to enhanced HR servicesAccurate tracking of project costs

http://www.applera.com;/

http://www.celera.com/

http://www.appliedbiosystems.com/


Energen Corporation Implements SAP® R/3

“SAP software has made Alagasco more efficient,productive, and cost-efficient. Without it, changing anybusiness process would have been extremely difficult.”

Brunson WhiteVice President and CIO, Energen Corporation

Company Energen CorporationLocation Birmingham, AlabamaIndustry Utilities, oil and gasRevenue US$1,394 million

Employees 1,500

Web Site www.energen.com


SAP® R/3® (HR functionalitynow available in SAP ERP HCM)

Implementation Partner Clarkston Consulting

Challenges and OpportunitiesPoor integration with routine business processesSignificant effort in payroll processingSystem unavailable during payroll runsNo access to historical data and organizational hierarchyManual open enrollment and employee development processesLimited reporting capabilities

Implementation HighlightsCommitted executive management supportBusiness-led implementation teamProcess experience of Energen project teamEffective project management officeUse of SAP best practicesImplementation partner with strong HR experience

Why SAPCurrent use of SAP® solutionsStrong customer referencesProfessional sales processPositive analyst recommendationsEase of integration

BenefitsStreamlined payroll processingFully automated W-2 processingAccess to historical dataSignificantly enhanced reporting capabilitiesSmoother reconcilementsAccess to organization managementImproved and faster employee status change processIntegrated safety (OSHA 300) reportingIntegrated third-party drug testing

http://www.energen.com/


Freescale Semiconductor Implements SAP ERP HCM

“We are not only proud of the team and the millions of dollars of costsavings for the HR and IT organizations, but also of our ability tomake employees’ and managers’ jobs easier. With theimplementation of this solution, we have truly been able to move theneedle on our goal of self-service in the HR space. This allows ouremployees to spend more time on opportunities – designing,building, and selling Freescale product.”

Kurt TwiningSenior VP of Human ResourcesFreescale Semiconductor Inc

Company Freescale SemiconductorLocation Austin, TexasIndustry High techRevenue US$6.4 billion (2006)

Employees 24,000

Web Site www.freescale.com


SAP® ERP Human CapitalManagement solution

Implementation Partner SAP Consulting and Larsen &Toubro InfoTech Limited

Challenges and OpportunitiesPressure to quickly implement a total human capital management(HCM) system after separating from MotorolaInflexible legacy systems with more than 360 custom interfacesand nonintegrated processesProprietary data warehousing software that complicated analyticswith more than 1,000 custom-built reportsHigh system maintenance costs and data redundancies acrossapplications

Implementation HighlightsSolid executive support and passionate team membersStrong user adoption through subject matter leads and train-the-trainer approach to knowledge transfer“HRNow!” project branding to keep team focusedExtensive change management with readiness assessmentsMock deployments to prepare for flawless go-live

Why SAPComprehensive, out-of-the-box HCM functionality on a singleglobal instanceEase of integration and simplified technology architectureMinimal implementation risk and change managementClear release strategy and strong commitment to HCM movingforwardProject mantra: “If SAP can do it, SAP will do it”

Benefits50% reduction in HR IT support costs87% reduction in number of interfaces74% reduction in HR IT application systems90% reduction in the number of reports (from 1,000+ to 92)Single global HR platform with significant improvement in systemreliability and uptime

http://www.freescale.com/


SAP Asia Pacific Japan Increases Efficiencyand Profits with Shared Services

“SAP software has made Alagasco more efficient,productive, and cost-efficient. Without it, changing anybusiness process would have been extremely difficult.”

Brunson WhiteVice President and CIO, Energen Corporation

Company Energen CorporationLocation Birmingham, AlabamaIndustry Utilities, oil and gasRevenue US$1,394 million

Employees 1,500

Web Site www.energen.com


SAP® R/3® (HR functionalitynow available in SAP ERP HCM)

Implementation Partner Clarkston Consulting

Challenges and OpportunitiesUnify management if 13 operating countriesProvide faster, more accurate informationSimplify data administrationImprove field support for business expansion and acquisitions

Implementation HighlightsHad strong management buy-inMaintained project transparencyEstablished clear project success metrics

Objectives of the Shared Services CenterEnhance corporate governanceEstablish consistent, efficient processes across all systemsImprove independent checks and balances2006 – “Shared Services Leader of the Year”(International Quality & Productivity Center)2008 – “Best New Shared Service”(Shared Services & Outsourcing Network)

BenefitsLowered operating costs by 40%Reduced headcount 42%Increased number of finance and administration documentsprocessed by 59%Improved HR shared-services concept call resolution within 24hours by 90% (Service level agreement [SLA] 85%)Outsourcing of all financial transactions to expertsGreater focus on decision support and performance managementStrategic business partnership between local CFOs and CEOs

“If you want to have efficient processes, you needautomation. To drive automation, you need integratedsystems. And to get that integration, you need toleverage technology using a common platform.”

Colin SampsonCFO and Senior Vice President, SAP Asia Pacific Japan

Company SAP Asia Pacific JapanLocation SingaporeIndustry High TechRevenue SGD 1.3 billion

Employees 11,000

Web Site www.sap.com


SAP ERP application, SAP CRM application, SAP SRMapplication, SAP NetWeaver technology platform, SAPInteractive Forms software by Adobe, SAPBusinessObjects Access Control application, SAPBusinessObjects Process Control application

Implementation Partner SAP Asia Pacific Japan finance and IT departments

http://www.energen.com/

http://www.sap.com/


Brookshire’s Puts People First with SAP® ERPHuman Capital Management Solution

“The SAP ERP Human Capital Managementimplementation was very successful. We have a trulybusiness-operated solution that requires minimal ITsupport to run and a great foundation to buildupon.”

John D’Anna,Vice President, IT Planning and Strategy, Brookshire Grocery Company

Company Brookshire Grocery CompanyLocation Tyler, TexasIndustry RetailRevenue

Employees 13,000

Web Site www.brookshires.com


SAP ERPHuman Capital Management solution

Implementation Partner HRP Consulting Group Inc.

Challenges and OpportunitiesReplace legacy software with an integrated, scalable softwaresolutionAutomate key operational HR processesCentralize and standardize benefits and payroll policies,information, and procedures

Implementation HighlightsExecutive sponsorship and quick decisionsModified ASAP methodology – trained and dedicated resourcesChange management program, thorough training, and ongoingcommunication

Why SAPUnified software system that integrates all business processesand dataFoundation for self-services, career path, and succession-planningfunctionalityEnhanced business intelligence functionalitySAP commitment to retail industryStandard software requiring no additional customization

BenefitsReduced payroll staff from 7 to 3Boosted productivity of benefits staff by 50%Increased the number of benefits plan options by 6Increased productivity by eliminating manual work for all departments,including finance and HR, with integrated systemsAchieved single source of dataImproved data access and visibilityReduced level of support required by IT staff to create and run reportsIncreased self-sufficiency of HR staff to run monthly processes

http://www.brookshires.com/


Central Michigan University Implements SAPStudent Lifecycle Management

“We have a lot of new services for students, faculty, andstaff with 24x7 availability. And we’re processingextremely high levels of transactions much more quicklythan we did with our old system.”

Roger RehmVice President of IT and CIO, Central Michigan University

Company Central Michigan UniversityLocation Mount Pleasant, MichiganIndustry Higher education and researchRevenue US$373.5 million

Student Enrollment 28,000

Web Site www.cmich.edu


SAP® ERP Human Capital Managementsolution

Implementation Partner - - - -

Challenges and OpportunitiesRetire an end-of-life legacy systemAutomate student life-cycle processesImprove integration among the university’s applicationsAid decision makersMaximize existing IT resources

Implementation HighlightsBuilt effective project team with “make it happen” attitudeHad strong executive supportConducted extensive testingTailored training to specific audiencesReceived timely support from SAP

Why SAPIntegration with existing SAP® software landscapeOpportunity to influence future product developmentSupport of best practicesStaff experience with SAP solutions and tool setsEasy integration with third-party best-of-breed point solutions

BenefitsImprovement in student satisfaction (self-service approval ratingover 90%)Extensive student self-servicesConsolidated student information available 24x7Greater use of online admissions and automated admissionworkflowsReal-time online reportingOne system for both on- and off-campus operations

http://www.cmich.edu/



Agenda


StrategicActivities

ExpertiseBased Activities

TransactionalActivities

Human Capital Management: Study Scope

The benchmarking study included analysis across 11 key HCM business processes

HR Strategy and Leadership

Compensation and Benefits PlanningRecruitment and StaffingTraining and DevelopmentEmployee and Labor Relations

Compensation AdministrationBenefits AdministrationPension/ Savings Plan AdministrationPersonnel Data ManagementPayroll AdministrationTime and Attendance

DriveEfficiency

DriveEffectiveness


Technology

SAP SystemDeployed Yes

Other Non SAPSystem 25

ABC Company: Company Snapshot

Company/OrganizationFacts

Industry Utilities

Annual Revenue(in millions) 13,627

Number ofEmployees 13,339

Staffing Levels HR FTEs 204

Costs(in ‘000s)

Total HR Costs 16,705

Headcount Costs 12,208

External Spend 2,729

TechnologyCosts

Other Costs 1,767

Regions/ Divisions Included: Participant Information:

1Q1 – Average of the top 25% responses for a particular KPI2Q4 – Average of the bottom 25% responses for a particular KPI

Entire Company Manager, ABC Company.


Company Baseline: Staffing and Cost Profile

Area Sub Processes

HRGeneralist –Time Spent

in %

HRGeneralist

FTEs

HR NonGeneralist

FTEs

Total HRFTEs

AverageCost Per

FTE(in ‘000s)

TotalHeadcount

Cost(in ‘000s)

ExternalExpenditure

(in ‘000s)

Total HR Cost(in ‘000s)

Strategy HR Strategy andLeadership 5 2.8 14.0 16.8 60 1,002 300 1,302

Expertise

Compensation andBenefits Planning 6.0 6.0 60 359 583 942

Recruitment andStaffing 20 11.0 13.0 24.0 60 1,436 200 1,636

Training andDevelopment 15 8.3 13.5 21.8 60 1,302 356 1,658

Employee andLabor Relations 35 19.3 10.0 29.3 60 1,750 114 1,864

Transactional

CompensationAdministration 2 1.1 8.0 9.1 60 545 78 623

BenefitsAdministration 3 1.7 17.5 19.2 60 1,146 379 1,525

Pension orSuperannuationPlan Administration

9.0 9.0 60 539 457 996

Personnel DataManagement 1 0.6 7.5 8.1 60 482 482

PayrollAdministration 9.0 9.0 60 539 262 801

Time andAttendance 15 8.3 3.0 11.3 60 673 673

Other OtherNon Allocated 4 2.2 38.5 40.7 60 2,436 2,436

TOTAL 100 55.0 149.0 204.0 60 12,208 2,729 14,937


0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

100%

Automotive

High Tech

IM&C

Chemicals

Oil & Gas

Life Sciences

Consumer Products

EC&O

Healthcare

Service Providers

Telecom

Aerospace & Defense

Financial Services

Public Sector

Retail

Others

Utilities

Participating Company Profile: Industry andEmployees – Peer Group P1


13%

41%

21%26%

0%

<1,000 >=1,000-<5,000

>=5,000-<10,000

>=10,000-<50,000

>=50,000

By Employees 13,339

38Number of Companies in Peer Group P1:

Company Response:

Company Response:


16%

34%

18%

32%

<1B >=1B,<5B >=5B,<10B >=10B



Participating Company Profile: Industry andEmployees – Peer Group P2


0% 0% 0%

100%

0%

<1,000 >=1,000,<5,000

>=5,000,<10,000

>=10,000,<50,000

>=50,000

By Employees 13,339

95Number of Companies in Peer Group P2:

Company Response:

Company Response:


3%

40%

23%

34%

<1B >=1B,<5B >=5B,<10B >=10B

1%

1%

2%

2%

2%

2%

3%

4%

4%

6%

6%

6%

8%

8%

9%

16%

16%

Automotive

Life Sciences

Telecom

Public Sector

Chemicals

Aerospace & Defense

Oil & Gas

IM&C

Service Providers

High Tech

Healthcare

Financial Services

Utilities

EC&O

Consumer Products

Retail

Others



58%

42%

SAP No SAP

Participating Company Profile: IT Landscape –Peer Group P1

04

10

33

Top 25% Avg Q4 Company

HR Systems Deployed Yes Number of Applications inAddition to ERP System (in-house and outsourced)

1

34

11

Top 25% Avg Q4 Company

Number of ERP Instances

Company Response:

hcm sample report

Documents