Survey of Best Practices in Global HR Technology Session # 527 Karen Beaman, ADP Global Services Charles Fay, Rutgers University Towers Perrin Alfred J. Walker, Towers Perrin IHRIM 2003 Conference & Exposition Las Vegas 1 HRMS Strategies: Changing the HR Landscape
Current Research Goal Are there best practices in Global HR Technology? If so, what are the contexts and determinants of best practice? IHRIM 2003 Conference & Exposition Las Vegas 2 HRMS Strategies: Changing the HR Landscape
Key Learnings from this Session HR Technology… … practices are not universal … must be aligned with the organizational business model … must be appropriately centralized and decentralized for effective leveraging of best practices … must be aligned with HR plans, programs, and strategies … can serve as the lynchpin for supporting your global development IHRIM 2003 Conference & Exposition Las Vegas 3 HRMS Strategies: Changing the HR Landscape
Outline for this Session Background HR Business Environment Bartlett and Ghoshal Four Organizational Models Organizational Evolution and Developmental Curve Current Survey Research Goals and Approach Survey Respondents and Demographics Efficiency Innovation Model (EIM) The Effectiveness Arch and the Magic Middle Optimal Efficiency and Maximum Innovation Identifying Best Practices Conclusions Cultivating a Transnational environment IHRIM 2003 Conference & Exposition Las Vegas 4 HRMS Strategies: Changing the HR Landscape
Managing the Paradox “We are entering the age of unreason, when the only prediction that will hold true is that no prediction will hold true.” Charles Handy Successful organizations and leaders learn to live with paradox or “dilemmas.” We have to reconcile what used to be considered “opposites”, instead of choosing between them. We have to become both the “elephant” (i.e., develop scale and reach) and the “flea” (i.e., remain small and innovative). IHRIM 2003 Conference & Exposition Las Vegas Source: Charles Handy, 1994 5 HRMS Strategies: Changing the HR Landscape
HR Business Environment Since 1991, HR budgets have continued to decline and HR staffing levels have continued to shrink. Today, more than half of our budgets are still consumed by administrative and transaction processing costs. Leading companies are driving costs down 25% to 50% by: Initiating company-wide process redesign and standardization efforts, benchmarking others and seeking to leverage best practices. Emphasizing strategic business partner roles, using techniques such as Outsourcing and Self-Service to reduce the administrative burden. Utilizing new technologies with more effective service delivery models, such as Shared Services and Off-shoring. Driving metrics and value to the enterprise, linking HR results to overall business results and enhancing shareholder value. Improving the development of human capital to increase individual productivity and organizational effectiveness. IHRIM 2003 Conference & Exposition Las Vegas 6 HRMS Strategies: Changing the HR Landscape
How to Do More with Less Strategic Tactical Value Decision Value Added Support Added Support Services Services Control Control Cost Cost Structure Structure Reporting Reporting Outsource Self Service to Administration and Transaction Service Processing Provider Business Partner Cost Function IHRIM 2003 Conference & Exposition Las Vegas Source: IDC, New Economy, New Reality: Driving Out the Costs in the HR Function, 2002 7 HRMS Strategies: Changing the HR Landscape
Background for this Study The current study is based on the work of Christopher Bartlett and Sumantra Ghoshal, Managing Across Borders: The Transnational Solution (1991). All companies are bound by their own administrative heritage – their corporate history – which influences their development. Bartlett and Ghoshal define four organization models for categorizing a company’s business culture and operating style: Multinational – highly decentralized or “multi - local” Global – highly centralized and control-oriented International – both centralized and decentralized, focused on learning Transnational – highly networked – combination of other three Organizational development, along with HR/HRIS development, is an evolution – a journey – along the road toward optimal organizational effectiveness. IHRIM 2003 Conference & Exposition Las Vegas 8 HRMS Strategies: Changing the HR Landscape
Bartlett and Ghoshal Four Organizational Models “Multinational” HRIS “Global” HRIS “Multinational” HRIS “Global” HRIS Decentralized Federation: Centralized Hub: -many key assets, -most strategic assets, responsibilities, and resources, responsibilities, and decisions decentralized decisions centralized Personal Control: Operational Control: informal HQ-subsidiary tight central control over relationships overlaid with decisions, resources, and Management Mentality: Management Mentality: simple financial controls information regards overseas operations regards overseas operations as a portfolio of independent as delivery pipelines to a businesses unified global market Manages a portfolio of multiple, distinct, High focus on efficiency and creating a national organizations / “multi - local” single, standardized organization High focus on local needs and responsive Uniform, global operating environment as to regional differences the driving force Allows local operations a significant Minimization of national and local needs amount of freedom and organizational One single “sanitary” solution based autonomy primarily on mother company’s needs “Anything goes” / “Multi - headed monster” “One -size-fits- all” approach IHRIM 2003 Conference & Exposition Las Vegas Source: Bartlett and Ghoshal, 1991 9 HRMS Strategies: Changing the HR Landscape
Bartlett and Ghoshal Four Organizational Models “International” HRIS “International” HRIS “Transnational” HRIS “Transnational” HRIS Coordinated Federations: -many key assets, responsibilities, and decisions Distributed, specialized still decentralized, but controlled from headquarters resources and capabilities Administrative Control: formal management planning Large flows of components, products, resources, people, and control systems allow Management Mentality: and information among tighter HQ-subsidiary linkage Complex process of regards overseas operations independent units coordination and cooperation as appendages to a central in an environment of shared domestic corporation decision making Takes a “learning” and “sharing” approach To be competitive, an organization needs through transferring and adapting to be good at all three! knowledge Local responsiveness/flexibility Corporate still retains considerable control Global efficiency/competitive and influence over local organizations Worldwide learning capability Allows for exploitation of both parent and local organization core competencies We must embrace and exploit the paradox “Middle -of-the- road” IHRIM 2003 Conference & Exposition Las Vegas Source: Bartlett and Ghoshal, 1991 10 HRMS Strategies: Changing the HR Landscape
Bartlett and Ghoshal Organizational Evolution Multinational Transnational Global International Capabilities: Decentralized and Centralized and Only sources of core Dispersed, interdependent, self-sufficient globally scaled competencies centralized and specialized Operations: Seeking and exploiting Implementing parent Leveraging parent Differing contributions local opportunities company strategies company competencies by national units Management: Subs are delivery Subs comprise a portfolio of Subs are appendages Coordination & cooperating pipelines to global market independent businesses to domestic corporation shared decision-making Knowledge: Knowledge developed and Knowledge developed and Knowledge developed at Knowledge developed retained within each unit retained at the center center; transferred overseas jointly; shared worldwide Control: Personal and informal; Operational and strict; Administrative and formal; Large flows among simple financial controls tight control over everything tight linkage with HQ individual business units IHRIM 2003 Conference & Exposition Las Vegas Source: Bartlett and Ghoshal, 1991 11 HRMS Strategies: Changing the HR Landscape
Bartlett and Ghoshal Organizational Development Curve Organizational Evolution Transnational Stage International Stage Global Stage Multinational Stage Time IHRIM 2003 Conference & Exposition Las Vegas Source: Beaman and Walker, 2000 12 HRMS Strategies: Changing the HR Landscape
Current Research Goal Are there best practices in Global HR Technology? If so, what are the contexts and determinants of best practice? IHRIM 2003 Conference & Exposition Las Vegas 13 HRMS Strategies: Changing the HR Landscape
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