CZECH RAILWAYS

HUMAN RESOURCES DEPARTMENT

“We searched for a comprehensive, reli­
able, and proven solution. For effective
management in the 21st century, we
need the correct infor­ma­tion in the
right quantity and right format, at the
right time. SAP ERP HCM was, from
this perspective, the right choice.”
Pavel Švagr, Deputy Director-General for
Human Resources, Czech Railways
ROLLS INTO THE 21st CENTURY WITH
SAP® ERP HCM
QUICK FACTS
Company
• Name: Czech Railways
• Location: Prague, Czech Republic
• Industry: Transportation and logistics
• Products and services: Passenger
services and freight delivery
• Employees: 27,000
• Web site: www.cd.cz
• Implementation partners:
ČD-Telematika a.s., SAP® Consulting
Challenges and Opportunities
Replace legacy software with a flexible plat­
form for meeting complex HR requirements
efficiently
Objectives
• Centralize database
• Establish platform for future human capital
management (HCM) functionality
Why SAP
• Smoothly integrated with existing
enterprise resource planning (ERP)
software platform
• Reliability and well-established software
• Additional functionality
Benefits
• Centralized database
• New possibilities for reporting and
analysis, education, and measurement
of key performance indicators
• Reduced employee requirements in payroll
Existing Environment
• DOS and FoxPro
• SAP ERP application

SAP Solutions and Services

• SAP ERP HCM solution
• SAP NetWeaver® Business Warehouse
component
Implementation Highlights
• Cleaned and purged employee data
• Ran in parallel with the old system in
3 organizational units prior to rollout
• Transferred payroll to the new system
with no problems

SAP Customer Success Story

Transportation and Logistics
“A few years ago, our company undertook a transformation project The problems with the old system were
multifaceted and significant, starting
to move it away from its monopoly status, become a holding with the fact that it was based on ancient
company, and open up opportunities to other railway companies,” technology in computer terms: a FoxPro
database running on a DOS platform.
says Dagmar Holadová, chief information officer at Czech Railways. Thirty servers were spread around the
“More recently, part of that project included a transformation of IT. country, and 200 people were employed
getting the payroll out. Beyond payroll,
And this included an updating of our antiquated payroll system. the entire HR system was essentially
Since the company already had the SAP ERP application running, manual, time consuming, costly, and
inefficient. It also lacked the capacity
it was only natural to implement the SAP ERP Human Capital for innovation in such areas as visibility
Management solution to do the job.” of key performance indicators (KPIs)
and employee working hours.

On the payroll side, the replacement

Czech Railways, now a joint stock com­
pany, was established in January 2003
as one of the successor compa­nies cre­
ated out of the previously state-owned
railway. One of the largest com­panies
in the Czech Republic, it con­tinues a
tradition of over 160 years of railway
transport in the territories of Bohemia,
Moravia, and Silesia. With some 27,000
employees, it is a significant company
in international railway trans­port and a
member of important European and
world institutions, such as the Interna­
tional Railway Union, the Community of
European Railways, and the Organiza­tion
for Railways Cooperation (Asia and
Europe).The company provides trans­
port and other railway services, ensures
operation on national as well as regional
lines, and carries out infrastructure main­
tenance, repairs, and modernization.
Paradoxical Challenge
Modernization of processes is fre­quently
associated with discontinuity and dis­
comfort, as the old is replaced with the
new and “the way we’ve always done
it” gives way to “the way we’re going
to do it now.” One of Czech Railways’
specific modernization chal­lenges was
the upgrade of its human resources
processes, a project that had actually
been under way for quite some time.
Transformation implied, among other
things, the advance of the com­pany’s
IT into the 21st century, and nowhere
more so than in human capital manage­
ment (HCM). The need for orga­nization
management and person­nel adminis­tra­
tion development had become critical
to what was now expected to be a
profit-making enterprise.
A primary objective of this upgrade of
HR processes was the replacement of
an antiquated payroll system with a new
system that integrated with the SAP®
ERP application the company had been
running for some years. The challenge
was paradoxical: replace the old payroll
system with a new one while making the
change essentially invisible to the people
on the receiving end of the payroll.
project was a rather more complex
undertaking than one would expect,
owing to the union contracts involved.
“We have a lot of complicated salaries,”
notes Holadová. “We have a very com­
plex agreement with the unions, where
it seems as though nearly every hour
is differently charged, so it was a really
complicated project. We decided to
centralize the payroll and personnel
administration processes, including a
subproject to reduce the number of
people involved in preparing the payroll.”
Skepticism
With SAP ERP already running multiple
company functions, it was logical for IT
management to select SAP ERP HCM
as the software to handle the new
requirements. There was, however,
some resistance within the company.
Because Czech Railways had tried an
HCM implementation previously without
success, there was some skepticism
that the second try would be any more
successful. The union fretted that the
 “SAP ERP HCM is not something new in the marketplace. It is quite well
established. And the consultants whom we used for the project were
pretty senior. So I was able to say there was some guarantee that
ultimately we would be successful.”

Dagmar Holadová, Chief Information Officer, Czech Railways

company would be unable to meet its
payroll obligations in a timely manner. In
the past, there had been problems with
data integration, and now there were
problems with the vendor that was
supplying the payroll administration.
The vendor was about to be super­seded,
and it wasn’t going willingly.
“Ultimately, we did the data migration
ourselves,” recalls Holadová. “We found
some FoxPro and DOS experts, and we
just did it. We had to export data from
those 30 servers and pull together the
data and import it to SAP ERP HCM.
It was a big risk but finally successful.”
The entire HR upgrade project was split
into two parts. The prime contractor
was the majority-owned IT company of
Smooth but Not Simple
The implementation went smoothly but
was not simple. “It was really difficult
for the consultants,” says Holadová.
“They had to set up a lot of complex
arrangements. But SAP ERP HCM is
not something new in the marketplace.
It is quite well established. And the con­­
sultants whom we used for the project
were pretty senior. So I was able to
say there was some guarantee that
ultimately we would be successful.”
To be on the safe side, however, Czech
Railways ran its new payroll software in
parallel with the old package for three
months within three of its organizational
units. When the company was satis­fied,
it rolled the new application out to the
time with the payroll – even the first
payroll was on time, the 10th day of
the month. So from that point of view,
it was really very successful.”
New Horizons
And how was the new payroll devel­
opment received? “Nobody noticed,”
says Holadová, “People noticed only
that their checks looked a bit different
and the reports from payroll looked a
bit different. That was all. Which is
most important for us.”
It was noticed in the payroll depart­ment,
however. The calculation of payroll in
the old system was very time consum­
ing, but with the SAP software in place,
it’s several times faster.

Management has also noticed. The

“I have to say, choosing SAP ERP HCM was a good decision. If we had decided implementation of SAP ERP HCM has
opened up whole new horizons for Czech
to use some locally developed solution or some other software, we had no Railways. The company now has one
assur­ance it would not break. So ultimately, one good reason for our choice central database for the entire com­
pany, with a dedicated client for HCM.
was that we were sure we would be able to implement it, and that once Personnel administration has been con­
established, it would work.” siderably simplified, because all infor­ma­
tion is now collected in one repository.
Dagmar Holadová, Chief Information Officer, Czech Railways The data is secure and it’s clean, and
the software now makes improvements
possible in all areas of personnel admin­
Czech Railways, ČD-Telematika a.s., whole company. The project, begun in istration that simply weren’t available to
with SAP Consulting serving as the December 2008, went live in January Czech Railways before.
principal subcontractor responsible for 2010, an elapsed time of 13 months.
delivery of the payroll functionality. “From a business perspective, with cen­
Czech Railways also decided to use the “You know when you start with such tral reporting we can perform analy­ses
SAP NetWeaver® Business Warehouse a huge implementation there can be and create reports via SAP ERP HCM
(SAP NetWeaver BW) component as a problems,” notes Holadová. “You might about payroll and so forth, because now
reporting platform on top of SAP ERP be late with a summary, or you’re unable it’s on SAP NetWeaver BW and the
HCM, and this too was provided by to make a payment to a bank. But there central database,” Holadová points out.
SAP Consulting. were no problems here. We were on

“Then, from a business user perspec­
tive, SAP ERP HCM has a lot of other
functionality we can apply to our trans­
formation steps.”
The Right Choice
“I have to say, choosing SAP ERP HCM
was a good decision,” says Holadová.
“If we had decided to use some locally
developed solution or some other soft­
ware, we had no assurance it would not
break. So ultimately, one good reason
for our choice was that we were sure
we would be able to implement it, and
that once established, it would work.”
The HR department has started some
projects, such as education and setting
KPIs with employees. And the depart­
ment is using and customizing SAP ERP
HCM to support these and other new
projects. The company is also begin­
ning to rationalize and reduce the size
and extent of the payroll department.
“With SAP ERP HCM in place, we can
use it for purposes well beyond payroll,”
says Holadová. “It’s a huge and well-
established platform with a lot of func­
tionality that we can use if we choose
to. We will not have to implement more
software to accomplish new projects in
HR. So that’s another reason why we
decided to migrate to it, and that’s the
benefit we expect to get from it.”
www.sap.com /contactsap
Pavel Švagr, deputy director-general for
human resources for Czech Railways,
sums up: “We searched for a compre­
hensive, reliable, and proven solution.
For effective management in the 21st
century, we need the correct informa­
tion in the right quantity and right format,
at the right time. SAP ERP HCM was,
from this perspective, the right choice.”
The success of the SAP ERP HCM
implementation was further recognized
when Czech Railways won a bronze
award in the SAP Quality Awards 2010
competition, large enterprise implemen­
tation category, in the central and east
Europe region.
50 101 931 (10/11)
©2010 SAP AG. All rights reserved.
SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign,
SAP BusinessObjects Explorer, and other SAP products and services
mentioned herein as well as their respective logos are trademarks or
registered trademarks of SAP AG in Germany and other countries.
Business Objects and the Business Objects logo, BusinessObjects,
Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius,
and other Business Objects products and services mentioned
herein as well as their respective logos are trademarks or registered
trademarks of Business Objects Software Ltd. in the United States
and in other countries.
All other product and service names mentioned are the trademarks of
their respective companies. Data contained in this document serves
informational purposes only. National product specifications may vary.
These materials are subject to change without notice. These materials
are provided by SAP AG and its affiliated companies (“SAP Group”)
for informational purposes only, without representation or warranty of
any kind, and SAP Group shall not be liable for errors or omissions with
respect to the materials. The only warranties for SAP Group products
and services are those that are set forth in the express warranty
statements accompanying such products and services, if any. Nothing
herein should be construed as constituting an additional warranty.