Dutch organisations gradually take up cloud HCM software

While organisations in the Netherlands tend to use the traditional HR modules of the large software packages, some diversity is beginning to emerge

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The use of pure-play human capital management (HCM) software is not yet common in The Netherlands. Many organisations use the human resources (HR) modules of large software packages such as Oracle's, while others buy specific software for their human capital management. 

More than half of all Durch organisations install their HR systems locally, according to figures from the Dutch research firm Keala. Yet companies do not seem hesitant in outsourcing their HCM software. Almost a quarter of the companies Keala surveyed said their HR system runs in the cloud; and yet another 25% said their HR system is outsourced through hosting or sourcing to third parties.

In addition, there are striking differences between sectors. Dutch governmental organisations seem wary of the cloud, whereas software as a service (SaaS) is the most common form for HR software in the healthcare sector. 

“Many solutions are traditionally installed on premise with government organisations,” says Ruud Aleards, director of Keala Consultancy (pictured). “The organisations that use HR from the cloud are mostly SMEs. That makes sense, because this way they only pay for what they use and they do not have to invest in expensive hardware and software.”

Credit insurance company Atradius uses Oracle Fusion for its HR processes. The company has more than 160 offices in 50 countries and 3,300 employees worldwide. About six years ago, the company implemented PeopleSoft and, when Oracle bought PeopleSoft, Atradius had to make a choice of whether to upgrade or switch.

Fons van der Hall, group HR director at Atradius, says: “We implemented PeopleSoft very plain vanilla. We were a functionally organised business at the time, making it relatively easy to deploy one HCM system. We could implement uniform HR practices and policies, so we needed little customisation.”

The choice to migrate to Oracle Fusion lay in the fact that it offered a cloud system, leaving the company's IT department with few IT concerns – such as updates – to worry about. “We also found Fusion friendlier and more intuitive than PeopleSoft,” says van der Hall. Because the application runs in the cloud, it is easy for the company's 3,300 employees to maintain and manage their own information through a portal.

In 2015 we continue with phase two, in which we look at talent management and compensation management

 Fons van der Hall, Atradius 

No local player

Atradius has also looked at other possibilities for HCM software. They emphatically did not look at local players, given the size of the organisation and the geographical spread. The choice finally fell to Oracle because Atradius was already running several of the supplier's applications. “There was another supplier we looked at, but they are very focused on the US and could not offer the language features that we’d like to see,” says van der Hall.

At this time, the credit insurer was on the verge of going live with the application. The first phase of implementation was completed in December 2014. “In this first part we mirror the functionality we now have with PeopleSoft. That means core HR and goal management, performance and business intelligence (BI). In 2015 we continue with phase two, in which we look at talent management and compensation management. Those two things are definitely on my wish list,” says van der Hall.

Unambiguous process

The HCM software has different influences on the HR process, says Van der Hall. “On the one hand, it forces our HR departments worldwide to work in a consistent way. What is also very important, as we are a financial institution, is that we can easily demonstrate what we did and how we did it. This allows us to more easily meet all compliance and regulatory requirements.” 

Another advantage for Atradius is Fusion's ability to generate worldwide reports. For example, the organisation receives an unambiguous way for looking at the performance rating. “That also means that we can benchmark ourselves and compare. From a cost perspective, you get a good understanding of what is happening.” And the self-service component is a big advantage, because no professional HR capacity is needed for the things that employees can do themselves. “We can then use that capacity elsewhere.”

The goal was a system to support our processes, employees and professionals

 Anjo Meijer, Rhenus 

Supporting system

The Rhenus Group is a transport and logistics company with over 24,000 employees and global business operations at more than 390 business sites. It has a strong regional presence in the Netherlands, with over 32 locations. The company recognises that professional and personal development helps achieve the business goals. 

“We started in 2012 with eHCM”, says Anjo Meijer, corporate HR manager at Rhenus. 

“Previously, we had a personnel information system, but that was only suitable for HR professionals and payroll. Employees could not retrieve any information from the system, which they wanted to, for instance, to check the status of an expense report. 

"We wanted to take the next step towards a system that supported our HR processes and where we would have decentralised information available. The goal was a system to support our processes, employees and professionals.”

SaaS is cheaper

The logistics and transport company asked for quotations from the three major HCM software suppliers in the Netherlands: Raet, Afas and ADP. Ultimately, they chose Raet: “Both the price and the flexibility of the software appealed to us,” says Meijer. The system Rhenus used to work with was also from Raet, which led them to hope the migration would be easier than to an application from another supplier. “In retrospect, I do not know whether we were actually better off than we would have been with other software. It is and remains a migration,” says Meijer.

Rhenus opted for the SaaS version of the HCM software. This choice was motivated by the future. “We didn’t want to have the software on premise, because that would mean we would also need someone available to manage and maintain the software. SaaS also offers the convenience that the application can be accessed from any location. This is especially a major advantage for the self-service element. “Employees can retrieve information on leave, expenses, salaries and working conditions from any location they wish.”

The probability of errors in the process is reduced and the paper flow decreased in the HR process

 Anjo Meijer, Rhenus 

Error rate declines

At the start of the project, Rhenus established a number of objectives. The company wanted to optimise communication and collaboration between employees, managers and HR professionals. It wanted HR processes to be more efficient and transparent. It wanted to save time and costs and for the SaaS system to contribute to what it saw as its position as an innovative and professional employer. For now the system is only used in the Netherlands for the 1,100 employees in that country. The goal is to eventually roll out the application throughout Europe, but the link to the payroll system and the different tax laws in European countries make that difficult.

To Meijer, a major advantage of the system is the decrease in the error rate in their systems. “Previously, when an employee moved house, he had to send a letter with his new address details which then had to be retyped. Now the input takes place at the source, namely the employee. The probability of errors in the process is reduced and the paper flow decreased in the HR process."

The next step

Rhenus has made great strides over the last three years and would like to go further, says Meijer: “Three years ago we were still using absence slips that we would store in physical files. We don’t do that anymore. In the beginning, people had to learn to trust the system and some of them kept shadow administrations in Excel, but that's no longer an issue. 

"We have made great strides, I would prefer to go even faster, but Rome was not built in a day. We need to give people time to get used to the system and gain confidence in it. 

"The next step is rolling out the flexible benefits module and, after that, we want to do recruitment through eHCM.” That will take about another three years to complete, but Meijer realises eHCM is never done. “There are always new developments. That makes it so much fun.”

Try to stay away from too much customisation. Every time you make something specific, you see that it leads to extra work and costs with updates

 Fons van der Hall, Atradius 

Advice to organisations

If Meijer were to give any advice to European organisations that want to implement an HCM system, he would enjoin them to think properly about what the system will be used for. “Do not go too fast. First do some small things, the quick wins so that employees see the benefits, and then expand slowly. It is important people have time to get used to the system and learn to trust it. This communication is very important. With us it was actually 20/80, 20% of the time in the project sat in technology and 80% in communication with employees. The system works, you do not need to worry about that. Most time is spent communicating about it – eHCM is not a goal, it's what you do with it.”

Atradius's Van der Hall recommends organisations use standard products as much as possible. “Try to stay away from too much customisation. Every time you make something specific, you see that it leads to extra work and costs with updates. We said very clearly at the start of the project that we adapt our way of working to the software, rather than vice-versa. This has saved us much effort.”

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