1.

TH Group Overview
TH True Milk, officially known as TH Foodstuff Milk Joint Stock Company, is a subsidiary of
TH Group. TH True Milk was established in 2008. The company was established with
financial consultation from the Joint Stock Commercial Bank for Investment and
Development of Vietnam (BIDV). Since entering the Vietnamese market in 2010, the
company has always aimed to produce the most genuine "clean fresh milk" products.

TH Group Joint Stock Company (TH Group) advises and manages production and business
projects in various fields, including beverages, food (processing and production of fresh milk;
fruit juice, nut milk, cultivation of fruits and vegetables, medicinal plants...), healthcare, and
education. Their prominent project is the "High-tech Industrial-scale Dairy Farming and
Processing," producing the TH true MILK brand of clean fresh milk. The success of TH
Group is attributed to the "golden key," which combines Vietnam's natural resources with
cutting-edge technology, applied scientific management, revolutionary achievements of the
Industry 4.0, and Vietnamese wisdom. With a mindset of being at the forefront of technology
application, along with the vision of investing in people as a sustainable development
strategy, TH Group began its digital transformation in the human resources field in 2017. In
the digital age, digital transformation in the human resources field means operating the HR
department on a digital platform - aiming to optimize the success opportunities for
employees.

3. SAP application in HRM system of TH Group

With the identified shortcomings in the traditional human resources management model, the
application of ERP (Enterprise Resource Planning) serves as a solution to address these
issues. ERP brings numerous advantages such as streamlining and integrating various HR
processes, improving data accuracy, enhancing efficiency, and enabling strategic decision-
making. In 2018, Mr. Prakash C Balakrishnan, the HR Director of TH Group, shared that:
“Currently, TH Group has 6,500 employees. This number is expected to continuously
increase as we expand our operational scale in the future. TH owns state-of-the-art and
automated dairy farms, the leading ones in Asia, with 45,000 cows, including 22,000 dairy
cows, and supplies 600 tons of fresh milk to the market every day. In addition to dairy
products, we have also recently launched a line of herbal drinks. We have also expanded
our operations internationally with three dairy farm projects in Russia, as well as distribution
activities in the United States, Cambodia, and China. This reality demands a professional
and intelligent human resources management solution.” ( Investment Journal, 2018).

3.1. The reason for choosing SAP SuccessFactors:

The SAP SuccessFactors human resource management solution integrates key HR
functions such as onboarding training for new employees, collaboration tools and social
networks, learning management system (LMS), performance management, recruitment,
training and development of succession teams, talent management, and HR analytics.

All of these tools are fully integrated and interact with each other in real-time, providing the
best management system in the industry with outstanding advantages such as user-
friendliness, agility, while still providing comprehensive information and necessary analysis
to managers.
Mr. Prakash C Balakrishnan stated, "With the implementation of this solution, TH Group has
significantly improved important performance indicators such as optimizing talent
management, enhancing employee satisfaction, and operational efficiency. Therefore, we
have decided to choose SAP SuccessFactors for our system."

3.2. The current situation of SAP application

In January 2017, the TH Group successfully implemented an integrated system for human
resource management. With a workforce of over 10,000 employees spread across 11
subsidiary companies including THFC, THM, THMF, AGT, GRT, ISC, LSC, EXIM, NASU,
DLM, and MAY, the company recognized the need for an efficient and comprehensive
solution. The deployed modules encompassed various crucial aspects of HR management,
including Personnel Files, Timekeeping, Payroll, and Social Insurance.

3.2.1. Personnel information management:

The OOS (Organization and Staffing) system has been successful in incorporating essential
information about organization structure, job titles, positions, and staffing into the software
system. This enables personnel management to easily access and update employee-related
information.

Additionally, SAP provides a comprehensive set of reporting and form templates for TH
Group, aiding in the reporting and monitoring of personnel information. Specifically, the
system offers batch printing capabilities to meet large-scale printing requirements.

TH Group has successfully integrated the OOS system with SAP and Lotus, allowing for
data exchange between these systems. This creates linkage and synchronization among
different software, enabling personnel management to conveniently and efficiently access
information from multiple sources.

3.2.2.Timekeeping and payroll management:

The SAP application implemented by TH Group for timekeeping and payroll management
provides the following functionalities and benefits:

Accurate calculation of employees' working hours and overtime: The system accurately
calculates employees' working hours and overtime based on comprehensive timekeeping
data. This enables the company to have a clear overview of labor productivity and effectively
manage labor costs.
● Precise alerts on attendance status: The system generates accurate alerts regarding
attendance issues such as late arrivals, early departures, and adherence to the
company's card-swiping policies. This feature allows users to easily monitor and
manage employees' attendance, ensuring compliance with internal rules and efficient
work progress.
● Seamless data transfer from timekeeping module to payroll module: The system
facilitates the automatic and accurate transfer of data from the timekeeping module
to the payroll module. This streamlines the process of payroll calculation and
disbursement, minimizing errors and optimizing HR efficiency.
● Accurate salary calculation across all TH Group companies: The system ensures
precise salary calculations for all companies within the TH Group. This guarantees
 consistency and fairness in determining employee salaries throughout the entire
organization.
● Support for email delivery of salary slips: The SAP application supports the
convenient delivery of salary slips to employees via email. This enhances the
distribution process and provides convenience for employees in accessing their
salary information.
● Printing capabilities for reports, attendance submission forms, and payroll
statements: The system offers printing functionalities for generating reports,
attendance submission forms, and payroll statements directly within the software.
This facilitates the creation of necessary documents and streamlines administrative
tasks.
● Support for annual tax settlement and integrated printing of tax forms: The SAP
application also assists with annual tax settlement processes and allows for the
integrated printing of tax forms within the tax software system.
● The implementation of the SAP application in timekeeping and payroll management
by TH Group provides an efficient and accurate solution for managing workforce
attendance, calculating salaries, and ensuring compliance with payroll regulations.

3.2.3. Social insurance management:

The SAP application by TH Group in the field of social insurance has developed important
features to support efficient management and accurate calculation of monthly social
insurance costs.

Firstly, the system has built a mechanism for accurately calculating monthly social insurance
costs. By inputting comprehensive employee data such as employment contracts, job
positions, salaries, sick leave, and other factors, the system automatically calculates and
provides accurate figures for the social insurance costs that the company must pay each
month.

Secondly, the system has developed alerting and dynamic generation functions to manage
changes in Social Insurance. When there are changes such as contract modifications, salary
adjustments, sick leave, and other factors, the system automatically generates alerts and
recalculates the Social Insurance figures based on the new data. This allows the company to
have an overview of employees' social insurance status and quickly make necessary
adjustments if needed.

Lastly, the system has established reports and forms for Social Insurance, designed to meet
the requirements of the Social Insurance authorities. These reports provide detailed and
accurate information about the company's and employees' Social Insurance, facilitating easy
signing and submission of the reports as required. Furthermore, the system also provides
templates for importing dynamic variables, allowing the company to easily import dynamic
data into the Social Insurance software system, streamlining the management of Social
Insurance-related information conveniently and quickly.

4. The benefits of SAP application in HRM system

Mr. Prakash Balakrishnan, TH Group's HR Director, said, "SAP's solutions are built based
on the best practical experience in the industry and are updated quarterly, which is crucial as
we pursue the group's goals in the coming years. At present, we are facing many challenges
such as low data accuracy, lack of reliable reporting, multiple overlapping documents and
approvals processes that are too slow. With SAP SuccessFactors solution, we expect to
improve the overall consolidation and digitization of HR processes, enhance transparency,
and improve access to employee data, enabling our leadership to have a comprehensive
and accurate view for better decision-making" (Thời báo ngân hàng, 2018).

Ms. Megawaty Khie, Vice President of SuccessFactors, SAP Southeast Asia, said, "As large
corporations like TH with TH True Milk brand continue to grow and expand their operations,
they need to enhance the application of more advanced solutions to manage functional
departments, including HR management. SAP's cloud-based HR management solutions
help customers streamline and standardize specialized activities while remaining user-
friendly, allowing them to easily complete tasks from a mobile device and connect and
collaborate with colleagues in real-time”
(Tạp chí thương gia, 2018).

SAP offers outstanding advantages in terms of ease of use, speed, and providing
comprehensive information for leaders. TH True Milk's HR strategy is integrated and
interacts in real-time, enabling TH to have the best management system in the industry. It is
also thanks to SAP that TH has a large number of high-quality personnel. This solution also
allows TH's leaders to monitor real-time labor performance of each employee accurately,
solely with smart devices. Moreover, employee data, compensation, benefits, and rewards
can be easily and accurately reported. TH's HR strategy through SAP has significantly
improved important operational indicators, especially optimizing talent management and
increasing employee satisfaction within the company to enhance operational efficiency.
Additionally, this solution helps analyze and determine the necessary talent pool to guide
and lead the company towards its goals.