Mobile phone manufacturer, Nokia has reduced its HR costs by between 20% to 30% after rolling out a web-based HR portal to its 60,000 employees.
The portal, part of a major re-think of the way Nokia manages its HR, has given the company a clear view of the capabilities of its worldwide workforce for the first time.
Its development comes at a critical time for Nokia, as it battles with cost-cutting, restructuring and a strategic gamble to jettison its own smartphone operating systems in favour of Microsoft technology.
The magnitude of the challenge facing Nokia was revealed to staff in a leaked internal memo in February. Nokia’s CEO, Stephen Elop, compared the company to a man standing on a burning oil platform, who might just survive if he jumped in time. Nokia needed to find billions in savings fast, he warned.
Single HR system covering 60,000 employees
In human resources, at least, Nokia had a lot of the pieces in place to make the restructuring possible, says Andrew Winnemore, director of global HR services.
Unlike most multinationals, which have a multitude of HR systems to contend with, Nokia had a single SAP HR system in place. It had a single set of HR data, covering its 60,000 employees in 73 countries.
The bad news was that Nokia’s SAP system was heavily customised, which made it expensive to maintain and upgrade, says Winnemore.
Nokia opted to roll out a portal that would give employees and managers the ability to access and update their own HR data.
The portal aims to free Nokia’s HR managers from the burden of administration to focus on more strategic areas of the business.
Once it is fully rolled out, Nokia predicts HR staff will be able to reduce the proportion of the time they spend on administrative tasks from 60% to 20%; and double the time they spend supporting the business.
Nokia made its first attempt to introduce a company-wide HR portal in 2004. But the project ran into difficulties.
The technology was immature, with few off-the-shelf solutions available, says Winnemore.
Secondly, reaching a consensus about how to manage HR processes in the organisation proved unexpectedly difficult.
“The project team felt they had an agreement on how the workflow should go, but we realised there had to be a deeper sign-off and commitment,” said Winnemore.
For example, there was the question of who should approve the appointment of new members of staff, he says. Should it go to the manager, the manager’s manager, the trade union or the HR department?
Clarity in process
“Unless you get clarity behind that, you end up having workflows and approval flows which are very difficult to customise, build and maintain.”
Nokia took these lessons on board when revisited the project in 2008. The project team took time to study and understand the day-to-day tasks and problems facing HR.
It became clear that Nokia’s HR data was not as consistent as it should be. HR managers in each country were entering data into the SAP system in different ways.
“We found that moving people from one country to another country was just an horrific nightmare.” he said.
Winnemore and his team developed a detailed change plan before rolling out the portal.
At its core was a proposal to create consistent records by centralising HR data entry in one place.
“Part of that was driven by costs, so we could allow our HR consultants in each country to focus on what’s important. But the other underlying factor was to simplify and streamline the approach,” he said.
Nokia created a processing centre in Chennai, India, and a series of regional HR centres to provide HR expertise to managers and employees. The process took two years.
The second plank of the strategy was a complete re-evaluation of the work flows and policies in HR.
At its heart was a fundamental change in the role of HR, away from policing to providing a support and consulting service to the rest of the business.
“We looked at each transaction and asked questions like, 'can you change your job title yourself, or not?'; 'When you do recruitment, who is involved in recruitment?'; 'When you do a promotion, how do you do a promotion, who is signing off the promotion?',” he said. “We looked at everything linked to every HR transaction that we have.”
Nokia based the portal on SAP’s off-the-shelf web technology, opting for the minimum amount of customisation to keep the project as simple as possible.
Winnemore and his team rolled the portal out gradually between 2008 and 2010. The plan was to go live with one component and develop it before moving on to the next.
“There were lots of problems at the beginning, lots of complaints, and we just went through it systematically step by step, fixing-improving, fixing-improving.”
Nokia slowly began to encourage staff and managers to use the portal, rather than taking their queries to HR.
Making the portal understandable for non-HR specialists and eliminating HR jargon form the portal was a priority, says Winnemore.
At the same Nokia worked to change the way its HR staff work.
“Rather than saying to a manager, 'Yes, let me do it,' it was a matter of the HR person saying, 'Let me walk you through what you need to do, then do screen sharing' and coaching them to go in,” he said.
Technically, the challenge is integrating SAP HR system to Nokia’s country-based payroll systems, says Winnemore.
The company has been working to create a single model for payroll across its geographies over the last year. It is rationalising the number of systems it uses to make integration easier
Next, Winnemore plans to build on the project by developing systems to exploit HR more effectively.
The company uses an analytics package from Inform Business Impact, now owned by HR specialist Successfactors, to monitor recruitment and diversity trends.
“We do feel that there is a lot more we can do there. And it's one area we are looking at more consciously,” he said.
For example, data analytics could be used identify managers who were particularly skilled at hiring high-performing recruits.
“If a manager ends up being really talented at picking out the right people, we should be able to use this information in the future to say, if we have the manager focusing more on this role, we can generate value,” he said.