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Agfa’s move to cloud HR paves the way for healthcare IT spin-off

Agfa-Gevaert is moving HR systems from 40 countries into the cloud as the company prepares to turn its health IT operations into a standalone business

Agfa-Gevaert, which makes imaging and IT systems for healthcare, printing and industrial applications, is investing in cloud IT services to prepare it for restructuring its health IT business.  

The €2.4m turnover group, which is based in Morstel, Belgium and operates in more than 40 countries, will separate Agfa Healthcare IT into a self-contained business unit in 2019.

The project has enabled the group’s HR team to win funding from the board to redevelop its HR IT technology, including a group-wide, cloud-based core HR system and a centralised payroll across its healthcare IT business.

Peter Dignef, global head of HR services at Agfa, said that replacing the company’s older on-premise HR IT systems with HR cloud services was essential to creating a healthcare IT business.

“If we were not able to do this, creating an independent organisation would be extremely difficult,” he told Computer Weekly.

The company plans to replace multiple HR tools with a single payroll and cloud-based HR system across 30 countries.

As a standalone business, Agfa Healthcare IT will no longer have access to the economies of scale of being part of the Agfa-Gevaert group. 

“We have 30 people supporting HR transactional activities in the 30 countries Agfa Healthcare will continue to operate in,” said Dignef. “Only six of them will join the Agfa Healthcare organisation.

“Integration is very complex. You have to do it right”

Peter Dignef, Agfa-Gevaert

“If you want to continue with limited resources in HR, you need these solutions to get there. Otherwise, you would need many more employees,” he said in an interview at the Unleash World Conference and Expo in Amsterdam.

The company evaluated a range of HR technologies in late 2017, including Workday and Oracle, and SAP’s SuccessFactors software.

Workday was a good system with a solid data model, said Dignef, but the company opted for  SAP’s SuccessFactors.

Agfa-Gevaert and its implementation partner, Belgian SAP technology specialist Flexso, already had experience of SAP’s technology from earlier projects.

SuccessFactors also had the advantage of allowing Agfa to deploy HR functions module by module, said Dignef.

Agfa-Gevaert began deploying SAP’s SuccessFactors Employee Central core HR across the company in January 2018.

Agfa Healthcare IT began a parallel project to deploy a payroll system from Neeyamo, PayNComp, in April 2018, which it is integrating into Employee Central.

Employee Central will act as a unique database for all employee data, gradually taking over from a wide range of other HR and payroll systems across the organisation.

The project is complex, said Dignef. “You have SuccessFactors, SAP on-premise and payroll – all the data has to be aligned. There has to be one source of data for everything.”  

Chronology

2003: Agfa introduces its first company-wide HR information system using software from German supplier SAP running on on-premise IT hardware. Up to then, HR had been managed locally in each country. Agfa’s finance department produced headcount figures for the group, but the company had no central list of employees.

2004: Agfa uses SAP to introduce a company-wide performance management programme, followed by a competency management programme.

2006: Agfa deploys a SAP-based learning management system across the group.

2010: Agfa replaces a range of paper-based and software recruitment process with iCims recruitment software.

2016: Agfa introduced cloud-based HR processes, after buying SuccessFactors recruitment and onboarding modules. It deploys recruitment across the company.

September 2016: Agfa holds a workshop with its recruiters to design a company-wide recruitment process.

January 2018: Agfa begins deployment of SuccessFactors Employee Central core HR database as a cloud service. The project will enable Agfa to create a single record of employees across the group, replacing local country-based records.

April 2018: Agfa Healthcare IT begins a project to adopt a payroll system from Neeyamo, PayNComp, and to integrate it into SuccessFactors.

November 2018: Agfa goes live with Employee Central in five countries and with payroll in the UK.

January 2019: Agfa plans to go live with Employee Central and Neeyamo payroll in nine countries.

April 2019: Agfa plans to go live in a further 11 countries.

May 2019: Seven more countries due to go live with Employee Central and payroll.

June 2019: The last country, Belgium, due to go live, bringing the total to 28 countries.

Agfa Healthcare IT has appointed one dedicated programme manager devoted to the work, and has asked other employees to spend part of their time on the project.

Flexso is teaching Agfa’s staff how to deploy SuccessFactors technology as the project rolls out.

The systems integrator carries out the integration work for the first country in each region, supervises Agfa staff completing the integration work in the second country, while Agfa completes the work unsupervised, said Dignef.

So far, Agfa has rolled out Employee Central to five countries and plans to reach 28 more in 2019. It has deployed Neeyamo’s payroll system in the UK.

The company expects to make savings in IT maintenance costs by moving its HR records from on-premise computers running SAP to the cloud by 2020.

The IT department charges €600,000 a year to support the HR information system and the learning management system that are run on-premise.

Agfa will still need an on-premise SAP system to run finance, access management and other systems, but Dignef expects the maintenance bill to be significantly smaller.

“There is a whole IT department working to keep these systems alive,” said Dignef.

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The SuccessFactors recruitment technology has enabled Agfa to appoint recruitment specialists to actively look for candidates to fill posts.

Rather than wait for responses from job ads, they can approach potential candidates, giving Agfa a head start at time when recruiting skilled people is increasingly competitive.

“In the past, we posted an ad and waited for applicants to react,” said Dignef. “Now we post a job and start searching LinkedIn and job sites.”      

SuccessFactors will, for the first time, give the company’s managers an overview of when their employees in different countries are on holiday.

The organisation previously had about 50 different systems to manage requests for leave and provide managers with reports from overseas, which did not share data.

“It is incredible how much time in HR we spent managing this,” said Dignef. “The big win is at the transactional level, and its often hidden cost. We are doing this in a more efficient way now.”

Agfa plans to replace the on-premise learning systems in its health IT operations with a SuccessFactors cloud learning platform in 2019, subject to board approval.

Dignef said cloud-based learning will be more user-friendly than the existing on-premise learning system, and will be easier to maintain.

Agfa’s HR IT systems

One of the biggest technical challenges in the project was the need to integrate SuccessFactors in the cloud with the company’s SAP software on its own computer systems.

“When you link SuccessFactors with SAP, it is always difficult because you have to customise, so it was more complicated than we had expected,” said Dignef.

The first integration – payroll – took longer than expected because of unexpected difficulties during testing.

Agfa Healthcare IT is expected to separate from the rest of the group in mid-2019, after which the non-medical part of Agfa’s business is expected to decide on its own group-wide payroll software.

“Gradually, SuccessFactors will take over as the number one source of data,” said Dignef.

Dignef advised companies embarking on a similar project to give themselves a realistic timescale for completing the work.

Agfa’s demerger plans meant Dignef had little choice but to meet a predetermined deadline.

“Integration is very complex,” he said. “You have to do it right. If you don’t integrate right, no one can follow any more – you change something three systems later.”

Dignef said he expected the company’s systems in most countries to go live by the project deadline, but there may be delays in some of Agfa’s larger operations, such as Belgium, Germany and the US.

How Agfa build its company-wide HR IT system

Agfa-Gevaert first introduced company-wide HR information systems in 2003, giving the group a centralised record of its employees.

Until then, the company had relied on its finance department to produce a headcount of staff, while the company managed HR and employee records in each country.

Peter Dignef, global head of HR resources, said: “Before that, everything was local, so it was very scattered. Also, the processes were local. Every region had its own way of doing stuff.”

Next came a company-wide learning management system in 2006, and by 2010, the company had begun a project to introduce software to manage and track recruitment across the group.

“Recruitment was managed locally,” said Dignef. “Some regions were very professional, some were very paper-based, and they did not really have a tracking system.”

Agfa looked that the tools being used in different regions before selecting a system used in North America – iCims.

As digital technology began to distrupt the company’s traditional film business, Agfa realised it had to offer its customers and employees something new.

It wanted to improve the branding of its websites for staff and have the capability to link its recruitment process to platforms such as LinkedIn to advertise jobs and find candidates.

“We were one of the big competitors to Kodak, which is a brand everyone knows – and everyone knows what happened with Kodak,” said Dignef. “We had to change everything, going from a film company, a chemical company, to become a more digital company.”

Dignef assessed a number of recruitment technologies, including Oracle Fusion, Workday and SAP’s SuccessFactors.

Agfa chose SuccessFactors, partly because the supplier could also offer an integrated learning management module.

“I was already looking at my roadmap for other processes,” said Dignef. “We had tools that were quite strong in recruitment, but had no solution in learning. I wanted to have one system where I could meet all the requirements.”

The HR team invited its main recruitment staff to a meeting in Antwerp in September 2016 to develop a company-wide recruitment process.

“During one week, we went through the whole process,” said Dignef. “We had a discussion and came to a consensus. That is extremely powerful, because we did not have a solution put forward by headquarters.”

Agfa hired Belgian SAP systems integrator Flexso to deploy the SuccessFactors recruitment software module.

Flexso used a preconfigured version of the software – dubbed an accelerator – that contained a built-in workflow. This simplified the project, said Dignef.

Dignef had been pressing Agfa-Gevaert to roll out further SuccessFactors modules. The opportunity came in summer 2017 when the board decided to make healthcare IT into a separate business unit.

Healthcare IT differed from the rest of the group, had greater autonomy and had no blue-collar workforce, and it made strategic sense for it to operate as a standalone business.

“I said we can do this if we have a core HR system linked to a global payroll system covering 28 countries,” said Dignef. “They said do it.”

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