Building Future

HR Operating Model
Andrey Kulikov, SAP
March 2021
Journey To The Future HR Operating Model

Design the target HR operating model

1

Execute the roadmap to resolve Evaluate current HR capabilities

gaps and establish criteria for and identify gaps between
measuring successful execution current and target states
3 2

2
 1
Design the target
HR operating
model

3
Why Should You Change Your HR Operating
Model?

To achieve HR agility

To improve operational efficiency

To make HR customer-centric and value-driven

4
Some Inspiration Ideas
Future HR Model: McKinsey Agile Scenario

Automation and analytics reduces

CoE size: fewer global expert roles,
but with deeper focus

Business partners focus on talent

value and become Talent Value
Leaders

Pool of multiskilled professionals

capable to perform most HR
actions

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Five Approaches to Drive Next-Gen Operating Model (by McKinsey)

https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20
Digital/Our%20Insights/Introducing%20the%20next-
generation%20operating%20model/Introducing-the-next-gen-operating-model.ashx

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Future HR Model (Gartner)

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Future HR Model: 5 Imperatives (Gartner)

• Their job is to define, test and build talent solutions

1 Create a dynamic pool of problem solvers
(about 40% of the staff)
•
•
May come from traditional COEs, HRBPs or other LoBs
Flatter network of interconnected teams

• Provide deep expertise in HR subject areas

2 Provide agile support with next-gen CoEs (10%) •
•
Employ more contractors and external experts
Goal is to solve critical challenges

• Remove HRBP from all transactional activities

3 Replace HRBP Role with Strategic Talent Leaders (10%) •
•
They should own talent management strategy for their Bus
Replace junior level HRBPs with people relations managers

• GBS function is much more customer-centric, not only

4 Replace Shared Services with GBS (15%)
•
transaction-driven
May perform long-term projects

• Create an HR COO role for strategic oversight

5 Build a robust HR operations and Service Delivery Team •
•
Build an HR Technology Team to own technical infrastructure
Add people relations manager to provide necessary functional
support

Source: Gartner „HR Operating Model of the Future“ 2019 report

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Insights from Deloitte „High Impact HR Operating Model“ Research (1/2)

Adaptability Segmentation and Flexibility

High-performing HR organizations are designing High-performing HR organizations are creating the
their operating and management models for future of work and enhancing worker performance
adaptability in response to never-ending disruption while customizing the worker experience through
workforce segmentation and flexible HR offerings

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Insights from Deloitte „High Impact HR Operating Model“ Research (2/2)
Platform-Oriented Technology Strategy
High-performing HR functions implement a
platform-oriented technology strategy to redesign
work and to stimulate high-value human
interactions
Agility across Functions
To meet the demands of the future of work, and to
fully leverage the benefit of the changing workforce
composition, HR must take a broad network-based
and workforce ecosystem perspective to its offerings
to assemble and activate teams of workers from
across the workforce spectrum (full-time, part-time,
contract, gig, and other workers, along with AI
integration).
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„Next Gen HR Operating Model“ (PwC)

https://www.pwc.de/de/human-resources/pwc-shaping-the-next-generation-of-hr.pdf
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People Value Chain Model (EY)

https://www.ey.com/en_gl/workforce/future-hr

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HR Architecture Approach (KPMG)

https://assets.kpmg/content/dam/kpmg/pdf/2012/07/designing-next-generation-hr.pdf

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Designing Operating Model with Different Canvas (Osterwalder‘s Canvas)

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Designing Operating Model with Different Canvas (Wardley Maps)

Wardley Map – map of

structure of business
capabilities needed to serve
the customer

Value Chain – series of

interdependent activities
required to meet user needs

Evolution – maturity of each

activity, ranging from unique
to commodity

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 2
Evaluate current HR
capabilities and identify
gaps between current
and target states

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 of HR leaders are operating or currently
72% implementing the three-part (Ulrich) model

of HR leaders are unsure about

54% alternatives to the three-part model

Source: Gartner 2019 Report “The HR Operating Model of the Future”

Most Frequently Implemented Changes

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Common HR Operating Model Challenges

HR functions lack digital HRBPs suffer from too COEs lack flexibility
tools and skills to remain much transactional work, and resources to
competitive lack strategic tasks properly respond to
business requests

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Example of Assessment of Existing HR Operating Model (PwC)

https://www.pwc.de/de/human-resources/pwc-shaping-the-next-generation-of-hr.pdf

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HR Operating Model Change: An Example

Strategic HR More leadership support Strategic HR

More HR projects
10% More transparency of HR
value to business
20%
More user engagement
More people insights

HR Consulting and Partnering HR Consulting and Partnering

30% 60%
Less process steps support
Less service brokering
Less go-to person
HR Operations and Services HR Operations and Services

60% Automation 20% Simplification

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Governance Matters More Than Structure

“There is a tendency in HR to
overemphasize structure when
considering the HR operating model,
thereby limiting the ability to anticipate
and address business needs”

Rather than a heavy focus on

structure, HR should look more closely
at governance. Governance is defined
as “a system by which an organization
makes and implements decisions in
pursuit of its objectives.”. A focus on
governance incorporates customers,
processes, and objectives required for
an operating model but shifts the focus
from structure to interactions and ways
of working

https://humancapitalresearch.deloitte.com/article/five-top-findings-for-bringing-exponential-change-to-the-hr-operating-model-9854/

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Possible Change: HRBP Alignment

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Possible Change: Flexible Project Teams of HRBPs and Specialists

Example A:

Example B:

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Possible Change: HR Team Owning HR IT Infrastructure

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Possible Change: Evolution of COEs

https://www.gartner.com/document/code/712489?ref=authbody&refval=3979979

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How Does SuccessFactors Enable
Changes in Operating Model?
SuccessFactors Enablers for Future HR Operating Model

Stakeholders SAP SuccessFactors Enablers Outcomes

Self-services Greater level of autonomy
Mobile access Faster time to complete processes
Employees and
Dashboards and reports Improved user experience
Managers
Automated and integrated workflows Better decision making

Holistic employee data structure Less time lost on data checks and error corrections
HRBPs Automated workflows Transactional work moved to operations
Ad-hoc reporting More time for strategic HR projects

Standardisation of processes Time savings on manual reporting

COE experts Holistic employee data structure Transactional work moved to operations
Ad-hoc reporting More resources for strategic HR projects
Automated workflows

Self-services Less time on manaul transactions

Services and Operations Authorizations and workflows Less requests due to self-services
Specialists Dashboards and reports More time for value-added services
Integrated eco-system

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End-To-End Processes for All Stakeholders Enabled by SuccessFactors
(„Manage Workforce“ Process Example)

Manage Manage Positions Recruit & Manage

Organizational (Create/Update Onboard via Hire/Rehire/
Data Position) Attract & Acquire Administer Candidate/New Hire/Employee/Contingent
Process Bundle Internal Hire/Add
or external Contingent Hiring/Line/Home Manager
processes Worker Next Level Manager/HC Approver
HR Business Partner

(Sourcing) Recruiter
Global Mobility Specialist
Host Line Manager

Manage Update Update Manage Administer Off Manage Manage Global Manage
Probation Personal Employment Temporary Cycle Salary Leave of Assignment Termination
Data Data (Data Employment Adjustment Absence (Start/ (Voluntary/
Change/ Monitor/End) Involuntary/
Promotion/ Retirement/
Demotion/ Death)
Lateral Move)

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SAP SuccessFactors Leading Practice as Enablers

In the next part of the document we will provide the list of Leading Practices based on real-life HR
implementations experience (part of SAP Model Company offering) and evaluate the relevance of
the practice for different components of HR operating models.

SAP® Model
Company

A service providing a Based on leading Offers end-to-end Reduces cost, avoids

ready-to-use solution practices and HR processes, a typical implementation
for SAP processes from SAP proven implementation risks, achieves a high-
SuccessFactors reflecting real-life approach, clear quality implementation
implementation guidance, and and an unmatched
experience predictable outcomes time-to-value for our
customers

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Consider the Impact of Change When Deploying HRIS system

“Digital Transformation Is Not About Technology…

…if people lack the right mindset to change and the current organizational practices are flawed,
digital transformation will simply magnify those flaws”
Harvard Business Review, 2019

• Working in the cloud requires an agile mindset, is the business prepared to take ownership?
• Consider the “to be” span of control; new processes and data will become available to your employees and managers
• Be clear about your new HR and IT operating models; changes must be clearly communicated with your organization
• Leverage the Leading Practices; adopting standard processes will lead to multiple business benefits, but individual
groups will need to change their ways of working
• Stakeholders need to have clear expectations and understanding of, and at the same time need to support the change
to their current ways of working
• With more people using the system, a clear definition of roles and responsibilities is essential; managers will have
increased ownership over talent processes, and the harmonization of processes may impact existing roles and activities
• Don’t underestimate data gathering; adopting a pre-built solution will inevitably lead to a change in what data you collect
today

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Examples of Changes in the Support Model

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Example of Service Delivery Approach

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 3
Execute the roadmap to
resolve gaps and establish
criteria for measuring
successful execution

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Harvard Model for Human Resource Management

Stakeholder Interests
• Stakeholders
• Management We should define target indicators and
measure success
• Employees
• Government
• Community
HRM Policy Choices HRM Outcomes Long term
• Human Resource • Commitment Consequences
flows • Congruence • Org. effectiveness
• Reward systems • Competence • Individual wellbeing
• Work systems Societal wellbeing
Situational Factors • Cost-effectiveness •
• Employee Influence
• Workforce characteristics
• Business strategy
• Labour market
• Law & societal values
• Techology

Harvard Framework for HRM (Beer et al. 1984)

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Example of Integrated Value Scorecard

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Establishing Alignment of Priorities and Metrics (Example)

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Examples of Metrics To Be Used in New Operating Model

Metric Type Metric

Time spent by HR administrators on personnel administration and org. management

Time Savings Time spent by managers on personnel administration and org. management
Time to complete employee HR requests
Number of employees using self-services
Number of managers using self-services
User Adoption
Number of employees using mobile app
% of user adoption for new solutions
Employee NPS
User Experience
Employee Engagement Score
HR FTEs per 1000 employees
Total HR cost per employee
Number of local process deviations / number of harmonized processes / process steps reduced
HR Efficiency Number of ad-hoc requests per year
Number of paper forms
% of HR data that is accurate
Number of data errors

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Andrey Kulikov
HR Value Advisor at SAP SuccessFactors
Andrey.kulikov@sap.com
Twitter: https://twitter.com/varkalos
LinkedIn: https://www.linkedin.com/in/andrewkulikov/