Where are they now?

From past to present — an update on three HRMS implementations

Over the years, Canadian HR Reporter’s Guide to HR Technology has put numerous companies and software vendors in the spotlight as they went through the process of implementing new human resource management systems (HRMS) and new technology. It seemed like a good idea to go back and revisit some of the companies featured, check in and see what’s happened since. Here are three organizations that have gone through three vastly different experiences. One is in the process of a massive upgrade, one is implementing an entirely new system and a third hit tough economic times shortly after implementation and is struggling to keep up with innovative HR practices.

Hamilton Health Sciences Centre
Hamilton
9,000 employees
Featured Oct. 19, 1998


Judy Prior wasn’t around to see the Hamilton Health Sciences Centre give birth to its ERP (enterprise resource planning) system. But she’s certainly helping it through its adolescent years as the hospital undertakes a massive upgrade from version 7.02 to version 8.3 of PeopleSoft.

Prior, an external consultant hired by the hospital and the project manager for the upgrade, said it was a natural evolution for the organization and a chance for it to really sink its teeth into the potential of the ERP. One impetus for the upgrade was the fact PeopleSoft’s support for the current version was running out. But the real driving force was a desire to do more and to use the system efficiently.

“They said, ‘You know what? We’ve got all this fabulous information. We’ve got a solid foundation. But what we want to do now is to take advantage of that and we want to evolve into a rules-based, process-driven HR organization,’” said Prior. “They’re making a tremendous cultural change and using the system as an enabler to make that change.”

One of the first decisions was to get rid of a lot of the customization done during the initial implementation. The initial ERP was customized to the tune of 60 per cent and, once the upgrade is finished, that number will be down to 25 per cent.

“There are only so many ways to hire somebody correctly, there are only so many ways to pay somebody correctly, so why reinvent those wheels?” Prior said.

By eliminating the majority of the customization, Prior said the hospital has been able to calculate savings of $935,000. For example, changing vacation practices enabled the hospital to use vacation in its vanilla, or out-of-the-box, state from PeopleSoft. It was complicated because the hospital deals with eight different union locals, but Prior said re-engineering the business practices made it work without having to change any of the collective agreements.

“Their vacation year used to be May to April and now its January to December,” she said. “That’s a massive shift for an organization of this size.”

The hospital also eliminated custom reports that weren’t being used and weren’t adding any value. The customization left stems from collective agreements, ministry of health reporting requirements, auditability and — the biggest headache for Prior — Ontario’s hospital pension plan. Every province has a plan, and each one is different. They govern how the pension plan is administered, what it costs, who is eligible and how they become eligible.

But planning for the upgrade has gone smooth, and she credits the hospital’s open mind and willingness to change.

“Where we used to have the business driving the way the software works, now the software is driving the way business works,” said Prior. “Is this a good idea? Absolutely. A hire is a hire. Whether it’s the health-care industry or the manufacturing industry, that process remains identical. So finding a mindset where they’re willing to say, ‘Hey. You know what? We aren’t different,’ is incredibly exciting.

“HR and payroll are transactionally intense departments. You’re adding employees, you’re adding benefits, you’re paying them and you’re collecting hours. If you can boil stuff down to that level then any human intervention is an expense and probably not required. And those are the times when the system really needs to drive.”

The new features being used include the time and labour module. With this, the hospital will be able to prevent overpayments, underpayments and automatically calculate shift premiums. It also keeps track of seniority and service dates. Another new feature being used is dynamic roles.

“This eliminates manual intervention when assigning people, assigning security levels as people move from department to department and their levels of authority change,” she said. “That’s a huge savings.”

But one of the most important features of the upgrade has nothing to do with savings and everything to do with ensuring the hospital’s internal staff take ownership of the system. There are 17 core team members working on the implementation, including five outside consultants.

“The first time around the hospital was kind of left holding the bag in so far as they didn’t have the skills necessary to support what they had,” said Prior. “My approach to this project, and in designing the team the way I did, was when we left the hospital would have all of the skill sets. Knowledge transfer is so vital and it’s excellent here. These people, they own this. They know it, they live it and they’re loving it.”

But because of a negative experience after the consultants left the last time, Prior said there was some hesitation to jump back on the bandwagon.

The decision to upgrade was made in the summer of 2002, and the new system is scheduled to go live on April 21, 2003.

To read the original implementation story, click on the "Related Articles" link below.

Trenton Works
Trenton, N.S.
800 employees
Featured Oct. 23, 2000


Trenton Works has had a rough go since implementing its HRMS system. Back in 2000, things were booming for the railway car manufacturer and its 1,200 employees. The “old economy” firm took a giant leap into high-tech by adopting an HRMS from D.L.G.L. in an application service provider-type format. But shortly after getting it up and running, the wheels nearly fell off the firm.

Trenton Works ran out of orders and shut down its production facility, leaving a skeleton crew of 110 employees with the company, located two hours east of Halifax. But things have picked up recently. The plant received another order and is back producing, albeit at a reduced volume, and now boasts about 800 employees.

But the rough times meant the company has not been able to do anything innovative with the HRMS since implementation and is struggling to use what it has.

“We had plans of a phase two and a phase three whereby we were going to add on more exotic modules, but that hasn’t been able to happen,” said Bob Hickey, vice-president of finance for Trenton Works. “We are using the payroll and the HR modules that we had, albeit at a reduced volume.”

Because of the tough times, and the amount of money invested in the system, Hickey has abandoned any hope of achieving a positive return-on-investment.

“It’s very difficult for us to get a return on the investment we made,” he said. “The numbers are huge. We got a good payroll system that works, we got an HR system that accomplished a lot of things we couldn’t do before and, hopefully, got one good database of information. But going along with that is that you have to keep it current, you have to keep it up to date, you have to maintain it and in that regard I think we ourselves have become lax through the turbulent time we went through.”

One of the goals of the system was to reduce union grievances. Because there wasn’t a good system in place to deal with seniority and handing out overtime, the union and the company were often at loggerheads because junior staff got overtime instead of members with more seniority.

“The grievances have decreased significantly,” said Hickey. “Whether it’s because of the system or not, I can’t tell. We seem to be able to manage our seniority lists much better than before. But the amount of overtime we’ve been working in the last two years, well, you couldn’t buy your Christmas presents with it.”

Hickey said one of the reasons for his disappointment with the system is the behaviour of internal staff.

“The people we chose to become the ‘power users’ ended up to be a disappointment,” he said. “They just never did champion the area they were working with, for whatever reason.”

New employees are having an extremely difficult time learning and using the system, he said.

“Their conclusion is it’s a very, very difficult system to learn and use. We’ve been struggling with it, probably since implementation, in one aspect or another,” he said. “Like, for example, let’s just say producing T4s or generating earnings reports for employment insurance. That type of thing should be simple, run-of-the-mill stuff. We’ve always had problems with it.

“Whether that’s a reflection on the system itself or the people we have who are trying to learn the system, I’m not sure.”

D.L.G.L. has offered to help, Hickey said, but the company simply can’t afford to pay for any help at the moment.

“The offer has been there, but to correct the situation we have to spend buckets and buckets of money, and that’s the issue that we have,” he said. “We’ve got so much invested in it now, we’re not going to throw it out right now. So we have to keep going with it, but every time we turn around it seems like there’s a huge cost associated with it. It’s frustrating.”

One of the first issues Hickey dealt with was the payment schedule. Trenton Works didn’t buy the system outright. It amortized the payments over a set period of time. But after the first year, he noticed the number of months it would take to pay off the system was increasing rather than decreasing. The problem? Every time staff turned to D.L.G.L., they were billed and the amount tacked on to the monthly payment. Very little money was making it through to pay off the principal, he said.

Hickey had D.L.G.L. split the billing so the entire monthly payment went towards paying off the system, and billing for any assistance was done separately. This meant departments seeking maintenance or advice from D.L.G.L. had to pay for the work directly.

“What it allowed us to do is significantly cut back on what appeared to be very easy access to spending money with D.L.G.L. to very difficult access,” said Hickey. “A lot of our employees who were really working with the systems weren’t cognizant of the impact of their discussions with D.L.G.L., but they are now.”

Hickey isn’t sure what the future holds for Trenton Works and its HRMS. At press time, Hickey and his vice-president of human resources, Shelly Alward, had a report on their desks from D.L.G.L. on ROI.

Richard Rousseau, of D.L.G.L., said the report will show Trenton Works will definitely see a positive ROI, but they have some work to do to get there. The problem stems from an under-utilization of the system. If the system isn’t being used to do what it’s designed to do, the savings won’t come, he said.

“It will absolutely be positive in the long term,” said Rousseau. “They’re using probably just 30 per cent of it. That’s why we’re always offering an ROI study, and we give very strong recommendations and if they follow these recommendations, like other customers did, they’ll see the impact. Definitely.”

Once Trenton Works gets a good look at the study, they’ll have a better idea of what they should be doing to maximize their investment, he said.

“Sometimes it’s amazing the surprises that are there when you do a refresher,” he said. “People tend to forget. They say, ‘Oh, you can do this?’ Because they’re doing it manually — again.”

Rousseau said some organizations fall into the trap of only using new systems for payroll.

“The general tendency is the first thing they want to change is the payroll,” he said. “So after they do this the tendency is to sit back and they say, ‘Oh, we’ve done a good job and now let’s wait and see.’ When initially the intent was to find a truly integrated human resource system. Our role is to really come back and emphasize the fact, reminding them what was the real scope of the project.”

He echoed Hickey’s concerns that staff at Trenton Works might not have been prepared to take the leap. And the lack of training since implementation hasn’t helped the situation.

“That’s the biggest part, the training aspect,” he said. “When I went there, one thing that surprised me was that the employees are very old over there, so I could foresee that was going to be a problem eventually.”

Rousseau said the bottom line is that the system works and Trenton Works will see a positive ROI once they start using the system to do what is was designed — and bought — to do.

To read the original implementation story, click on the "Related Articles" link below.

Suncor Energy Inc.
3,300 employees
Calgary
Featured April 19, 1999


Suncor Energy went through what it calls a very successful implementation with Cyborg Systems Canada in 1999. But the company — specializing in gas and oil exploration, mining and refinery — is pumping the old HRMS out and implementing an enterprise resource planning system with SAP.

The company started looking at a new system when the support for its version of Cyborg ran out. That gave the company an opportunity to look at things more broadly, said Terri O’Driscoll, process analyst for the implementation for Suncor.

“There was a huge analysis done to determine, first of all, should we go with an ERP and, second of all, what is the best solution for HR?” said O’Driscoll. “Those things happened concurrently, and HR did an evaluation of a bunch of different vendors.”

Suncor chose SAP because it believed it was the solution for all of its business functions, not just HR. And it also gave HR the chance to take a critical look at how it was functioning.

“It’s given us the opportunity to look at a lot of things we haven’t changed in a lot of years to make them as efficient as possible,” said O’Driscoll.

The organization is implementing the new system in phases. Phase one, set to go live July 4, involves things like online pay stubs, compensation statements, payroll, time and organization management, compensation and manager self-service.

“In phase one I wanted to make sure we got in the platform successfully and we’re offering limited functionality through employee self-service,” said O’Driscoll. This means employees will be able to view personal information, but they won’t be able to change anything themselves.

“What we’re doing is bringing all of their information forward so they can make sure it’s right and then, in a little bit, we’ll give them the ability to change their address, to change emergency contact information and to change their bank information,” said O’Driscoll. “We have a population, like the mining areas, that won’t have access to computers. So it’s going to touch a large portion of our population, but not all of it.”

Users without regular access to computers at work will be able to use kiosks in some locations or to dial in from home computers.

Phase two, scheduled to roll out in December 2003, will see more robust self-service for employees and managers, compensation management, leadership development, succession planning, performance management and recruiting.

Darlene Crowell, manager of media relations for Suncor, is particularly excited about the potential of manager self-service.

“That’s a key part for us,” she said. “Staff reporting to you can be a painful process once or twice a year. You have to think, ‘Oh, what was the bonus or raise last year? What was the deadline? Where’s the form? How do I do that calculation?’ It’s all going to be online and self-service but very supportive for managers to do that.”

O’Driscoll said managers will have access to tools, and information linked to other processes across the business, so they can pull data from the ERP to make decisions on things like workforce and long-range planning.

Suncor is also opening an employee centre that will support a lot of the transactions that have been administrative for HR.

“We’re centralizing a lot of the transactional work,” she said. “This translates into consistency of data entry and the integrity of the data. That will allow our business HR people to focus more on the strategic HR efforts, like employees, and helping managers in areas they need such as leadership development.”

For the most part, Suncor is taking the system from SAP out-of-the-box in its vanilla state. Because everything is so new, they don’t want to rush into any major decisions on customization.

Suncor is expecting a positive ROI from the system, mainly from productivity improvements.

“Putting in a platform that is company-wide really forces you to say, ‘Why on earth do we have so many different ways of doings things?’ If we’re going to have an integrated platform, you’ve got to move away from that and you have to work together,” said Crowell. “The software isn’t going to solve that problem of inconsistencies for you.”

It’s also going to increase the value of HR, said O’Driscoll.

“What they’re working on will be more valued by the business than what they spend a lot of their time on today.”

To read the original implementation story, click on the "Related Articles" link below.

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