Siemens, the German electronics giant, is 18 months into what most observers agree is the world’s largest cloud HR implementation, with over 400,000 subscribers, across 80 countries and 20 languages. It’s an incredible feat but it only happened because HR acted within the business with other departments, from the board to IT to make a transformational change.
Marion Horstmann, head of the human resources fuction at Siemens, presented with Dr Norbert Kleinjohann, CIO at SuccessFactors European customer summit in Frankfurt. They explained the global HR structure their organisation follows and how the company has particular aims to answer the toughest question facing mankind, from energy to healthcare, as well as making progress with the more familiar consumer technology we know them for.
Like all businesses, especially highly skilled technological firms, Siemens faces problems with skills gaps. Horstmann explained their plan to improve employer branding and develop within, whenever possible. However she appreciates that you need to continue to attract talent at the same time.
Developing a minimum standards and ethos which to benchmark people by globally was a start – Horstmann describes potentials as being ‘curious, open, striving for sustainability. To her it was essential to create a global, seamless process to define miniumum standards and create ‘one truth’ about employee data for regions and the corporation as a whole.
Meanwhile in IT, Siemens was already undergoing a strategic transformation, driven by both both internal and external pressures. “We faced a lot of challenges,” recalls Kleinjohann. “We had just come out of a restructuring that we could use to overhaul our cost position."
Siemens used organisational structure and the pressure of the economic crisis to rightsize the IT organisation and streamline major parts of the services organisation.
Kleinjohann continued: “We also saw a strong globalisation of our business which enforced the need for a common backbone to better enable worldwide transparency. We needed as an IT organisation to address the challenges of emerging markets, often with less sophisticated software, which meant changing from a one size fits all mind set to a mix and match one. There were corporate initiatives to streamline processes towards one HR, one finance and so on and that meant a need for standard IT solutions. We had a target to create a integrated solution that could support a high performance culture which meant we needed a professional people management system.“
Now the only issue was to unearth a sytem which could deal with all of the challenges the business presented – together the departments set out to find a solution.
He added: “It was very obvious that a lot of vendors started small in recruitment or talent management, for example, while others were clearly leaning towards the integrated approach we needed.”
During this evaluation period, Siemens perception of its own needs shifted. “We assessed our business demand against the market standards, managing the IT selection process alongside the HR people,” says Kleinjohann. “We also strictly reduced our ‘must haves’ so that the only ‘must haves’ we had were those demanded for legal or worker contract reasons.”
Coming together
After the Siemens IT team worked with their HR colleagues to assess 50 possible suppliers, both on premise and in the Cloud, the programme they decided to implement was ‘4Success’ based on the SuccessFactors solution.
“We awarded the contract to SuccessFactors in March 2009, based on functionality and usability and the provisioning of an integrated solution with consistent data models,” says Kleinjohann. “For example, we wanted to be able to identify candidates from both external and internal points which leads back to the need for a consistent data model. We can now run reports on a global basis that we couldn’t do before because we never had this type of transparency.”
Success sustained
Eighteen months later and a number of key milestones have been passed and benefits accrued. Kleinjohann cites: “We have seven modules in place – target setting, performance management, compensation management, roundtables, career development planning, recruitment management and employee profiles. Cloud Computing means you can accelerate deployment dramatically. We went live within six months with the target setting module which we rolled out to 170,000 employees. We now have 400,000 employees information loaded into 4Success and have 40,000 log ins per day.”
Inevitably there were some stumbles along the way, including change management and ommunication challenges “On a project like this, there was always some room for improvement and perhaps the enterprise functionality was not always mature enough, but I’m confident that those improvements will come,” argues Kleinjohann. “We had some performance issues with the ’round table’ module, but we were very impressed by the customer service we had which meant that we overcame any issues in an extremely short time frame. Most of our milestones were achieved on time.”
For those enterprises contemplating following Siemens lead – albeit most likely on a less grandiose scale – Kleinjohann has some learnings that have emerged, particularly in relation to roles and responsibilities. It is not, he cautions, a case of handing over responsibility to others when adopting a Cloud approach. “Compared to individual development you save time because you don’t have to scale up systems or to develop functionality by yourself. But configuration and testing still need your attention and input as does the project management aspect,” he advises.
“We also realised that you need highly skilled project management and change management people. You move from IT service management to IT service controlling whereby you’re not providing the service to users but controlling the service being provided. It is a different approach.”
