Smiths Group, the £5bn engineering conglomerate, is aiming to raise the skill levels of its workforce and cut millions of pounds a year from its human resources (HR) costs by rolling out a cloud-based HR service.
The service will free up Smiths' HR staff from day-to-day administration to focus on developing the talent of the workforce - a move that is crucial if the business is to compete internationally, the company said.
Smiths plans to roll out the Globalview HR system from ADP across 140 business units worldwide by early 2012, providing it with a single system to manage HR across the group.
"It will enable us to compete in the market for talent more effectively," said Brian Jones, CIO of Smiths Group, in an interview with Computer Weekly. "We will be able to anticipate trends and to make resource allocations better."
The group's businesses - which include Smiths Detection, which makes airport scanners, John Crane, which provides components for the process industries, and Smiths Medical - have grown up with a mixture of HR systems, ranging from advanced IT systems to hard copy data kept in desk drawers. But it has no easy way of gathering accurate data on its employees across the business.
"How many people did we have in a particular country? What was the age profile of our research and development people, so we could ensure we had enough apprentices coming in? These were very difficult questions to answer," said Jones.
"We will be able to cross-pollinate talent more easily, so if someone is a very good supply chain person in one business, there may be an opportunity for them in another business that they previously might not have known about," he added.
Replacing inefficient HR systems
Smiths began the project after commissioning consultants to benchmark its existing HR systems. The study showed the HR function was not creating the value it should, and was not as cost-effective as it should have been, Jones revealed.
"We have a lot of very good HR people. The problem was they were spending too much of their time on day-to day-administration," he said.
Cloud system will allow Smiths HR staff to focus on developing talent (Source: Brian Jones/HR Tech Europe)
The HR and IT teams worked together to find an IT solution that could cover the group's business operations worldwide.
"We already had a reasonable Oracle HR system, and we considered rolling that out, but there were problems associated with that and the effort involved," said Jones.
"I was making a judgement about our ability to pull it off successfully, and I thought it was high risk," he said.
Smiths assessed other HR suppliers before opting for a software-as-a-service (SaaS) HR service from ADP. The company already provided Smiths' payroll services.
"We had that relationship already, and ADP was at a point in its evolution where it was looking to expand its presence in core HR systems. It is a highly reputable company, with a great track record, and it really wanted to work closely with us," said Jones.
As a result, Smiths was able to secure better commitment and value from ADP than it might have done with another supplier, he said.
"Today for a CIO, a lot of the core skill has to be about punching above your weight in the marketplace to get more out of your suppliers than the next CIO," he added.
Smiths awarded the contract to ADP in March 2011. It set up an eight-strong project team made up of staff from Smiths and ADP, to roll out the project - dubbed Magellan, after the first explorer to circumnavigate the globe.
"One of the challenges was getting the team members to interoperate. It seemed to take a little while," said Jones. "The project director did a great job there. We used a system for tracking based on Microsoft Sharepoint, which everyone contributes to and we kept pushing."
The biggest challenge, said Jones, was ensuring Smiths complies with complex data protection regulations in each country.
"You have to get approvals and permissions, and you have to consult in different ways in different companies. Some countries have works councils and some don't. You have to do it right," he said.
"We mobilised against the obstacles through a combination of legal, HR and certainly on data privacy. It was just really grunt work, getting everything in place, ticking every box," he said.
Smiths is collecting HR data to populate Globalview, and aims to begin testing early 2012.
Jones plans to add in further modules, to manage employee renumeration and reward once the system goes live in April 2012.
"Essentially, it is about providing the business with information insights. For a CIO that is El Dorado. You can see a direct connection between the information insights you provide the enterprise, and creation of value," he said.
- Data protection regulators will increase focus on HR systems
- Aviva reduces costs by 30% with cloud-based HR system
- Software suppliers exploit distance between HR and IT procurement departments
- Talent management gets the best from employees
- HR systems integration is a costly problem