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CEOs expect HR to play a more active role in enabling business strategies

HR business partnering

For a decade now, HR has been undergoing a process of transformation. For many organisations however, this process has increasingly failed to produce the results expected of it. During these times of rapidly changing economics, HR is faced with a stark choice. It can either evolve and make a significant contribution to the business or be diminished and dispersed into the business and other functions.

At today’s leading organisations, talent is becoming entirely integrated into business strategies, capital investments and operations. Human capital issues command increasing attention and, in some cases, has become a permanent fixture on board agendas. Senior business leaders consider talent to be perhaps the critical factor in the push for sustainable growth and the need to manage new opportunities and risks in a more complex – and interdependent.

Read the full article . . . .  Why CEOs expect HR to play an active role in enabling business strategies

For more information, contact Jack Sellschop (Director and HR Transformation Leader) at jsellschop@deloitte.co.za and Gareth Evans (Senior Manager and HR Transformation Centre of Expertise Leader) at garevans@deloitte.co.za

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Using advanced analytics to turn HR data into actionable business intelligence

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With an emphasis on cutting operating costs, HR departments are increasingly being asked to demonstrate their own value and how investing in the workforce drives revenue and influences the top and bottom line. Driving the trend for human capital measurement are several factors:

  • The need for foresight – moving from reactive to proactive
  • Falling technology and data costs; new models and tools
  • Data-savvy leaders

By taking a more strategic approach to decision making and using advanced analytics to turn HR data into actionable business intelligence, companies can leverage their existing ERP systems, data warehouses, and smaller-scale HR point solutions for critical insights into the workforce.

These insights, in turn can help guide decisions that are critical as the business confronts a range of issues. We believe this capability is not a “nice to have” – it’s a “must have” going forward.

Download the full article . . . .  Using advanced analytics to turn HR data into actionable business intelligence

This article was prepared by Hein Nienaber (Associate Director – Human Capital) and Candice Silverstone (Workforce Analytics Lead) at Deloitte Consulting Southern Africa. For a more detailed discussion, contact Hein at hnienaber@deloitte.co.za and Candice at csilverstone@deloitte.co.za

We welcome you to visit the Deloitte Southern Africa Human Capital website to learn more about how we add value to our clients

How to use advanced analytics to manage talent and risk

Given the importance of talent and people, it’s time to move beyond instinct, gut and tribal wisdom in making workforce decisions.

If you’re not using workforce data and analytics to drive your talent decisions, you may be behind the curve — and at risk of losing your competitive edge. As HR works with leaders on the front lines, analytics is becoming critical in making more effective decisions related to workforce planning and recruitment, risk management, compensation, development programs and deploying critical talent.

Workforce analytics involves using statistical models that integrate internal and external data to predict future workforce and talent-related behavior and events. These models can help organisations focus limited resources on critical talent decisions. For example, models have been demonstrated to predict the likelihood that a particular employee will leave in the next six months — and can provide likely reasons for the prediction.

Read the Deloitte paper . . . . How to use advanced analytics to manage talent and risk

If you have questions or require a more detailed discussion on how you may benefit by using advanced analytics within your organisation, feel free to contact Ashleigh Theophanides, Director at Deloitte Actuarial and Analytical Solutions, at atheophanides@deloitte.co.za

We welcome to visit the Deloitte Data Analytics website to learn more and to meet our people

If you have anything to add, or would like to comment, we would love to hear from you!

8 key considerations when reviewing your ERP strategy

by Coenrad Alberts and Georgina Stubbs of Deloitte Consulting

There has been talk about the demise of Enterprise Resource Planning (ERP), however the ERP industry is thriving. Major ERP vendors are reporting healthy profits and organisations globally are currently implementing or re-implementing ERP systems or going through the planning phase.

The playing field has changed however. There are fewer ERP software vendors and the ERP solutions out there are robust, rich in functionality and stable. Organisations no longer have to make grudge purchases (classic example was the millennium bug) and are a lot more tech-savvy. ERP investments now have to be backed with a solid and sound business case.

This paper provides insight into the key cost considerations of an ERP investment and some of the crucial decisions that should be considered regarding the organisation’s ERP strategy going forward – in order to implement a sustainable, scalable and cost-effective solution that will cater for the organisation’s future growth and requirements.

Here are 8 key drivers to consider when reviewing your enterprise resource planning investment strategy:

1. Software

Select the right solution for the right job.

Vendors no longer advocate ERP solutions as cure-alls. They rather recommend that organisations implement ERP solutions to provide core enterprise functionality and select best-of-breed point solutions to meet specific requirements, e.g. specific billing requirements.

The advent of SOA has made integration of multiple systems easier and more efficient. It is, therefore, often advisable to implement a solution that fits the problem rather than to manipulate both the solution and the problem in an effort to make them fit, sometimes at the expense of critical business requirements.

By carefully selecting a hybrid of solutions that will directly address best-practice business requirements, the initial implementation effort will be reduced, user adoption will be increased and because customised development will be reduced, so will the ongoing cost of ownership.

Investigate Software as a Service offering.

Many ERP software vendors these days offer “Software as a Service” (SaaS).

By subscribing to a SaaS application, rather than purchasing licences outright, you avoid the initial overhead associated with implementing conventional software. You don’t incur the capital investment of a typical software implementation, such as purchasing and maintaining servers, housing them securely, and installing and maintaining the software – an overhead that can be four to five times the cost of the original licence fees.

SaaS applications also leverage economies of scale achieved by “multi-tenancy”, because many customers can run their applications on the same unit of software and even on the same infrastructure, e.g. advances in security and virtualisation make it possible for multiple customers to share databases.

When you subscribe to a SaaS application, you pay a monthly or annual subscription fee. Compared to a traditional software licence, this subscription payment structure can work to your advantage. An ongoing monthly expense is often easier to incorporate into your budget than a large one-time outlay, and if you cancel or change your subscription, you do not lose a large initial investment. And, as SaaS subscriptions are based on metered usage, you pay for what you use.

Another key aspect of SaaS is that you gain immediate access to the latest innovations and upgrades, however the potential downside of SaaS is that you cannot customise the solution to meet your specific requirements.

2. Hardware and Infrastructure

Consider hosting.

Even if you don’t subscribe to SaaS, one option to contain your investment in hardware and infrastructure is hosting, whereby you rent servers and the associated infrastructure from a third party and pay on a monthly basis, rather than investing in the equipment upfront.

Reputable hosting service providers offer holistic IT infrastructure support, meaning that your organisation can have access to a fully redundant IT infrastructure, including disaster recovery facilities, delivered on the latest technology platform and maintained by highly skilled IT technicians, without the associated costs and risks. Service providers guarantee uptime to suit your requirements and often offer other services such as domain management and registration, internet connectivity, 365/24/7 operations monitoring of your servers, physical and information security services, UPS and generator power, daily tape back-up facilities, provision of statistics, reports on bandwidth and network utilisation, fault correction initiation, encryption and LAN and WAN support.

Not only do these services reduce your investment in the actual infrastructure, they also reduce the need for your organisation to have a large IT department with the expertise to service all the different components of the infrastructure, and the availability to provide 24/7 support.

The duration of your implementation is also reduced, as the hardware infrastructure is already in place.

3. Implementation costs

Investigate available industry-specific preconfigured solutions.

By selecting an industry-specific preconfigured solution, you can reduce the impact on your business, the implementation costs and the duration of the implementation, while ensuring that your solution is based on industry best practices. The customisation effort is also reduced because industry specific components are already pre-built, e.g. specific costing models, data templates and load programmes, banking interfaces and workflow.

Quality preconfigured solutions provide organisations with an accelerated implementation that starts with a working and fully pre-documented and preconfigured system, which can be rapidly configured into a productive solution.

These solutions have been developed based on years of hands-on industry experience and are based on best practices which are continually refined over the years.

Choose your implementation partner with care.

Ensure that you have consultants who understand your business and industry and are “business led, but also technology enabled”. Consultants that understand your industry will be able to facilitate design discussions and make meaningful contributions to functional and technical documentation. They will also be better equipped to anticipate and manage scope changes based on a deeper understanding of industry-specific requirements.

4. Training and change management

Ensure that your investment in training and change management provides a real return.

Although it is strongly recommended that you do not reduce the investment in training and change management, it is also important to ensure that the return on that investment adds tangible value to the implementation project and the organisation. Don’t be afraid to ask your service provider for detailed training and change plans that identify clear deliverables aligned to tangible and measurable outcomes.

It is also critical to ensure that you don’t pay lip service to these items and that there is executive sponsorship, without which your investment will be wasted.

5. Ongoing maintenance

Consider outsourcing to meet ongoing maintenance requirements.

By outsourcing the management and maintenance of your applications, you will reduce the need to build, maintain and train a team of specialised and senior application consultants, which is becoming a more cumbersome task as organisations implement a hybrid of solutions, thereby increasing the diversity of skills required.

Ensure that your application management service providers proactively add value through their support services, rather than just react to problems. By providing you with statistics on which types of problems occur frequently, value adding service providers enable you to address those problems at source, i.e. by identifying the root cause – for example: where more training is required or where a different solution should be considered. These statistics can also be used to optimise your support contract by reducing the support hours required over a period, as the solution beds down or your users become more skilled.

6. Process efficiencies

Measure potential process efficiencies.

Effective business process design, based on industry best practices (such as the Deloitte best practice IndustryPrints), is essential to ensure that process efficiencies are achieved and to reap the real benefit of your ERP implementation.

Processes can be measured, costed, benchmarked to similar organisations and then mapped to solutions to identify where real process efficiencies will be achieved, and where manual manipulation, duplicate transaction processing, etc. can be eliminated.

When considering the ERP investment, this tangible benefit should be accounted for.

7. Tax efficiencies

Don’t overlook potential tax efficiencies.

A well-designed, tax-enabled ERP Solution can increase speed, accuracy and data integrity, all of which are important, particularly when working through last-minute updates at either quarter-end or year-end. These improved data collection processes also help companies better manage workflow, which, in turn, increases visibility. Furthermore, it provides greater control over information, and the associated movement or flow of work allows the tax function to be more effective and to report virtually in real time. This makes the organisation more nimble when it comes to business decisions and the related tax implications of such decisions and frees up the tax department to spend more time performing value-added activities, such as strategic income tax planning.

A tax-enabled ERP solution provides opportunities to benefit from tax savings ideas directly and indirectly associated with ERP implementations, such as maximising R&D tax credits and deductions, training incentives, transfer pricing, customs and excise, VAT optimisation and other appropriate strategies.

As organisations redesign processes and install enterprise-wide systems to create a competitive advantage, they often consolidate legacy systems and initiate process improvements that, at best, do not enhance the tax reporting process and, at worst, actually impede access to tax-sensitive information and do not take advantage of potential tax savings.

8. Shared services

Ensure that you implement the most efficient and effective operating model.

A large number of support processes in IT, finance, procurement and HR (including payroll) are repetitive and not unique to the individual business but rather add value through operational excellence, delivering zero defect at the lowest cost. Other processes are more ad hoc and knowledge involved, adding value through maximum benefits at appropriate cost, only when necessary. Both transactional and knowledge-involved processes can take advantage of benefits through a shared services model, either internal or outsourced.

An example of such a model is the Deloitte Mining Shared Services (DMSS) platform, which provides cost-effective back-office process support to mining companies with a need to focus on core business operations and also to create a low, fixed-cost overhead structure.

This service delivery model allows mining companies to co-source and/or outsource transactional and knowledge processes and take advantage of the cost benefits offered by consolidating and streamlining back-office processes. While the shared services centre runs these processes, mining companies retain some functionality based on the individual organisation’s requirements and business case.

Summary

So – far from dying – ERP is alive and well and back on the Executive Committee’s agenda. But the conversation today is very different to that of 10 to 12 years ago. Traditionally, organisations invested time and money selecting the right ERP solution to meet their needs; however, nowadays there are fewer Tier 1 products to choose from – and most of them offer similar functionality with some minor variations in their value propositions.

This means that, while it is important to select the right product (whether an organisation is considering an upgrade, reimplementation or replacement), there are other discussions to be had and decisions to be made. The decisions will have a more significant impact on the initial and ongoing cost of the investment and the impact to the business.

These decisions need to consider all the innovative and varied options available to finance this investment, and derive maximum value, and this is what will drive the business case. And, whereas a robust business case was not a requirement when the implementation of a new ERP was not an option, it has now become critical to justify this semi-discretionary investment.

If you have any questions or require a more detailed discussion, contact Coenrad Alberts at calberts@deloitte.co.za or Georgina Stubbs at gstubbs@deloitte.co.za

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Clouds in the forecast – Deloitte Human Capital Trends 2012

Cloud computing is changing the way people and businesses work, upending conventional ideas about time-to-value, service levels, infrastructure needs and more. With cloud, systems and data are typically located outside of an organization’s four walls and accessed through the Internet. This has fundamental impacts on many parts of the business, transforming the nature of work and accelerating the pace of change across the enterprise.

In this emerging cloud services environment, HR has a responsibility to help the organization adjust its people and processes to operate more effectively. HR is uniquely positioned to do this — not just because HR is responsible for the overall talent agenda, but also because many HR organizations learned valuable lessons as early cloud adopters. Leading HR organizations are already using cloud technology to improve how HR services are delivered. And now, they are looking for opportunities to share their hard-earned experience and insights with the rest of the business.

What’s driving this trend?

Cloud offers benefits that in many cases are too compelling to ignore. The technologies and processes associated with cloud are rapidly maturing and are now gaining acceptance as standard business practices. Recent forecasts for 2012 predict that 80 percent of new software applications will target the cloud and that spending on cloud services will exceed $36 billion — which indicates a rate of growth four times faster than the IT industry average.i Key drivers for cloud adoption include the following:

  • Cost reduction. Improve utilization and save money through consolidation of servers and data centers. Capitalize on economies of scale by sharing resources across organizations. Reduce training costs thanks to improved ease of use and browser-based interfaces.
  • Reduced capital investments. Replace capital expenses with operating expenses. Pay only for what you use.
  • Faster implementation. Get up and running quickly by avoiding the need to acquire hardware or to develop and configure applications.
  • Agility. Adjust to changing demand and market requirements. Scale up or down as needed. Take advantage of vendor best practices, which are drawn from multiple organizations and rolled out quickly.
  • Smarter decisions. Take advantage of cutting-edge tools that support fact-based decision-making.

Read more about this trend

If you require a more detailed discussion, contact Kamal Ramsingh at kramsingh@deloitte.co.za

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Social media and mobile devices are raising the bar on HR service delivery

Restore the personal touch with employees by integrating social media and mobile with HR service delivery

Change is happening. Again. As social media and mobile devices quickly become essential parts of our daily lives, they are starting to influence how HR services are delivered and the direction HR transformation efforts take. Beyond just being the next new thing, integrating social media and mobile devices with HR service delivery can provide a real opportunity to restore some of the personal touch that was lost in previous pushes for improved HR efficiency.

Traditionally, HR service delivery has been based on structured and specialized interactions between the services HR provides and its customers (e.g., employees, managers, recruits). Typical scenarios might involve an employee who updates benefit options through an online a self-service system or who contacts an HR call center with specific questions about benefits.

Now, HR has an opportunity to use social media tools to create communities for sharing knowledge — and to support employees through direct, yet informal communication. Additionally, mobile devices can provide convenient, on-demand access to this knowledge and experience from almost anywhere in the world. Instead of contacting a call center, for example, an employee with benefits questions could use a smartphone to view and participate in a discussion thread where specialists and other community members share their own knowledge, opinions and questions.

The introduction of social and mobile technologies is not only expanding HR’s service delivery options, it is also increasing HR’s value to the business. Although social and mobile technologies will not entirely replace traditional HR channels, social and mobile tools are easing the burden while providing customers with a richer experience that is more engaging — and often more convenient.

What’s driving this trend?

Social media and mobile devices are effective tools that can help improve HR’s service and responsiveness.

  • Breakthrough technologies. Mobile devices and social media are revolutionizing the way people interact, making it easy to communicate and share knowledge without regard to time, geographic location, or organizational boundaries.
  • Business acceptance. Mobile devices and social media have become standard business tools. According to a recent study, less than 15 percent of business executives still view social media in business as a fad.i
  • Rising expectations. In their personal lives, many people have already come to expect the rich, engaging experiences that mobile devices and social media can deliver. Now, they are looking for the same thing from their interactions with current and potential employers. A recent article on Forbes.com featured a how to guide on using social media to land a job.ii

Click Here to download the full article

If you require a more detailed discussion around integrating social media and mobile with your workforce, contact Andre Hugo (Chief Marketing Officer and Director of Innovation at Deloitte South Africa) at anhugo@deloitte.co.za and Kamal Ramsingh (Technology Service Area Leader at Deloitte South Africa) at kramsingh@deloitte.co.za

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i “Capgemini Survey Reveals the Rising Importance of Social Media to Customer Care,” www.istockanalyst.com, July 25,
2011, http://www.istockanalyst.com/business/news/5311010/capgemini-survey-reveals-the-rising-importance-of-social-media-to-customer-care.
ii “How to Use Social Media Sites to Land a Job,” www.forbes.com , http://www.forbes.com/pictures/edej45lidk/how-to-use-social-media-sites-to-land-a-job#content.
As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

People risk is risky business – Deloitte Human Capital Trends 2012

Black swans are low-probability events that have far-reaching impact. Such events used to be exceedingly rare, but in today’s hyperconnected world, they are increasingly common and have enormous destructive potential. The euro crisis is a textbook example of how increased connectedness, interdependence and scale can turn a local problem into a global threat. Other recent examples include the following:

  • The 2008 financial crisis that began with subprime mortgages in the United States but eventually triggered a worldwide recession
  • The Gulf of Mexico oil spill that sent shock waves through global energy markets
  • The tsunami in Japan that disrupted global supply chains and caused countries around the world to reconsider their use of nuclear power
  • The Arab spring uprisings that are continuing to reshape the world’s political landscape
  • Local flooding in Thailand that caused a worldwide shortage of hard drives

On the surface, none of these events would be considered a people-related risk. But as organizations dig deeper, it becomes clear that people are at the core of each major risk — if not as part of the problem, then as part of the solution. To help navigate this increasingly uncertain environment, many leading organizations are expanding the role that HR leaders play in managing risk across the enterprise.

HR’s role in risk management used to focus on the tactical, administrative, legal and regulatory risks that were directly under its domain — such as ERISA (Employee Retirement Income Security Act) compliance, workplace discrimination and sexual harassment — and on making sure its own systems and processes passed the annual risk audit. Now, forward-thinking HR organizations are partnering with the core risk functions — e.g., Risk, Legal and Internal Audit — to better identify, prioritize and monitor people-related risks, including black swan events that could threaten the entire business.

What’s driving this trend?

  • Black swans are becoming less rare. In a hyperconnected world, small trigger events that in the past might have been locally isolated now have the potential for global impact. Also, the dizzying pace of change increases the number and frequency of trigger events, making it hard for organizations to stay on top of all the risks they are facing.
  • People risks are headline news. Whether it’s a management team that cooks the books or a nationwide shortage of math and science talent, the tremendous impact that people-related risks can have on a company’s bottom line, market value and prospects for future growth is becoming better understood by business leaders.
  • The view of human capital risks is expanding. HR risk management used to revolve around regulatory compliance and the avoidance of lawsuits. Now, the focus is expanding to include the broad range of people-related risks that can undermine a company’s performance and prevent a business from executing its strategy. The growing significance of these risks has raised expectations about what HR can and should be doing to identify, prioritize, monitor, mitigate and report on people-related business risks.
  • Regulation is increasing. Although regulatory compliance is no longer the sole focus of Risk Management, it remains an important catalyst for action. In many cases, new regulatory requirements provide the initial impetus for broader improvement efforts. Also, regulators today are making examples of companies that fail to comply. The growing complexity of HR regulations and associated financial penalties, as well as the reputational risk for noncompliance, are raising the stakes and increasing the degree of difficulty in managing these nonnegotiable risks.

Download the full article . . . . People risk is risky business!

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Human Capital Trends 2011 – HR in the cloud, it’s inevitable

This is the third article in the Deloitte Human Capital Trends 2011 series, titled HR in the Cloud: It’s Inevitable

Cloud computing and SaaS. Are these the next big disruptive technologies — or are they simply a natural evolution of distributed computing? Either way, they’re changing how many parts of the business operate — and they really are a big deal for HR. Especially SaaS.

SaaS has already demonstrated its value in terms of scalability and flexibility, using both on-demand and subscription-based models. Along with other aspects of cloud computing, SaaS is helping organizations to transform their traditional information technology (IT) structures into more nimble, flexible, and affordable architectures.

And while SaaS technology is evolutionary, its business implications are more likely considered revolutionary. That’s why the real demand for SaaS is being driven by the business, where there are heightened expectations for agility and flexibility. SaaS can create the possibility of rapid business model innovation, improved service levels, and new ways of controlling costs — powerful stuff for companies responding to the aftereffects of the economic downturn and the pent-up business demand for HR.

But there’s even more at stake than the opportunity to do current things faster, better, and cheaper. SaaS solutions, like cloud computing, can also enable organizations to do entirely new things, like helping HR organizations of any size compete and operate on a global scale.

Read the full article . . . . Deloitte Human Capital Trends - HR in the cloud, it’s inevitable

Learn more about cloud computing on the Deloitte cloud computing website

Listen to Louis Geeringh, CEO of Deloitte Consulting South Africa, explain why Deloitte is different

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