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Centrica eliminates more than 20 IT systems after replacing SAP with cloud HR technology

Energy and services company claims major savings in IT costs after moving its HR services to the cloud

Energy and services company Centrica is claiming major savings in its technology costs after replacing its outdated SAP human resources (HR) systems with cloud-based technology.

The company has eliminated more than 20 IT systems used for managing its workforce of 60,000 people following a 13-month project.

Centrica, which owns British Gas in the UK and also has operations in the US and Canada, went live with Workday’s cloud HR technology last August in a “big bang” roll-out across the company.

Now the £28bn-turnover company plans to use Workday’s technology to replace six different learning applications across the organisation with a single learning management system that will allow its engineers to download instructional videos as and when required.

Centrica decided to replace its SAP HR tools after realising that its support costs were higher than modern cloud-based alternatives, and that it was proving harder for staff to use.

“Like a lot of organisations, we were in the habit of going for best of breed in our toolsets and going for long requests for proposals (RFPs) from suppliers,” says Rob Cook, vice-president of HR technology, in an interview with Computer Weekly. “We found we were spending a lot of money, were struggling to make the employee journey smooth, and struggling to work in a mobile environment.”

Centrica’s HR technology did not give staff the user-friendly experience it was developing for its own customers through projects such as Hive, which allows customers to control their central heating remotely through their mobile phones.

Also, the technology could not easily give Centrica’s board members a full overview of its global workforce, and the ability to gain insights from analysing workforce data.

Variety of technologies

Centrica considered a variety of HR technologies, including keeping and developing its legacy SAP on-premise system, and cloud-based alternatives from WorkDay and SAP’s SuccessFactors, and Oracle Fusion.

“The user interface of Workday was much better and mobile was the best on the market at the time”

Rob Cook, Centrica

Cook and his colleagues spent more than three months “hitting the road” talking to companies that had tried these technologies. “The user interface of Workday was much better and mobile was the best on the market at the time,” he says.

While the work was under way, Centrica appointed Iain Conn, from BP, as chief executive. Conn conducted a strategic review which concluded that the organisation needed to act as more of a single business.

Replacing the company’s existing disconnected HR systems with Workday in the cloud fitted neatly into the new vision, says Cook, speaking ahead of a presentation at the HR Tech World Conference.

Simplify the infrastructure

Centrica began to look for ways to simplify its HR infrastructure. At the time, it had five HR systems, seven payroll systems and 11 time-recording systems. There were also 175 different employee contract templates and 180 different job offer templates in use throughout the organisation.

In the UK, HR operations sent or received 3,000 faxes and letters a month, and more than 20,000 emails a month in the UK and North America. Only 6% of all requests in North America were submitted through self-service.

Cook and the HR team started with the presumption that they would use Workday’s standard HR processes unless there was a legal requirement to change them.

Lessons learned

  • Never go live during a major global company restructuring.
  • Stick ruthlessly to simple standard processes.
  • Unflinching executive leadership is crucial.
  • Don’t expect to complete all the integrations – focus on high volume and critical integrations.
  • Think about why you need to transfer historic data – you don’t really need it.
  • Plan early for the cutover – the business needs lots of notice.
  • Invest in a demonstration “sand pit” version of the software so you can showcase it to the business.

Source: Rob Cook, Centrica.

The HR team, including Centrica’s head of HR, held a design session in a hotel last September. “We got everyone involved in the various rooms to go through the out-of-box solutions to try and find ways that they would not work,” says Cook.

The team was able to demonstrate the first prototype of the replacement HR system, using Centrica’s own data, in November 2016.

The company selected Aon Hewitt, which provides business process outsourcing services to Centrica, as its implementation partner for the HR transformation.

The company’s consultants were already familiar with its IT systems and were able to contribute to the design of the HR systems.

And, given that they would take over responsibility for the HR processes once they were live, they had a strong incentive to deliver the project on time, says Cook.

‘Big bang’ deployment

Centrica, which had a 25-strong programme team, took the potentially risky decision to deploy all the software modules within Workday across the whole company on the same day.

That included modules for human capital management, benefits, talent performance, absentee management and compensation, including bonus cycles, time recording and benefits.

The move made sense, says Cook, because Centrica has its main operations in the UK and North America, so it was possible to go live in one go.

“Splitting up into geography would be difficult and we wanted to reap the benefits immediately,” he says.

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Centrica is using Workday as a “single source of truth” for HR data, and has developed an interface to link Workday into the SAP systems, which are used, among other applications, to power its payroll in North America and UK.

“There are still some downstream areas of SAP that utilise organisational data, and we have been able to move to Workday,” says Cook.

Stellar results

Centrica has used the cloud-based HR system to present managers with dashboards that enable them to view and analyse data on the company’s workforce.

For the first time, the system has given Centrica a single overview of its permanent and contract staff, allowing managers to keep a tighter control of costs.

Although it is still early days, says Cook, Centrica is beginning to see savings in the cost of overtime, and has been able to complete HR administration tasks more quickly.

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The company’s employees are averaging 100,000 HR transactions day, and most are accessing the HR system over mobile devices.

The HR team has been able to make more than 400 configuration changes to Workday within a matter of months – a process that would have taken years using the earlier SAP technology.

The project has also allowed Centrica to simplify its IT systems and cut the cost of maintaining them. It has been able to retire more than 20 IT systems, and has halved the number of IT integrations needed to 65.

Training deck

The company plans to replace more than five learning management systems, which provide training for the workforce, with Workday’s learning application next month.

Centrica’s current learning systems, supplied by Saba, handle must-do training, such as health and safety, training and compliance well, but its replacement will allow engineers and other staff to call up a wider range of training videos as they need them.

“An engineer will be able to go to a customer’s house and see an old boiler and repair it, and to video how he did that, and share it online,” says Cook. “That is the future of learning, and it’s a much better user interface than we have seen before.”

Extra layer of complexity

Cook says that if he was working on the project again, he would not choose to start it during the restructuring that followed Centrica’s strategic review, because that added an extra layer of complexity to the project.

He advises others embarking on similar projects not to attempt too many software integrations at once. “High-priority, complex integrations, such as payroll, need to be done first,” he says.

The project team tried to help other managers by maximising the time they could hire and remove employees from the SAP system, before prohibiting further changes.

“Doing that created some issues,” says Cook. “I think we would not necessarily have given a longer period, but we would be really clear about what data we could and could not transfer.”

Cook says he would advise any business moving to Workday to invest in a preview version of the software, and use it to demonstrate the product to other people in the organisation with desensitised data. “It is money well spent,” he says. “Workday really sells itself.”

Rob Cook is speaking at HR Tech World in London on 21-22 March 2017

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