Teva Pharmaceuticals turns to cloud HR as it weathers difficult trading conditions

One of Israel’s largest manufacturing companies has invested more than $10m in cloud HR. The technology is helping Teva Pharmaceuticals turn its fortunes around.

Teva Pharmaceutical Industries, the world’s largest manufacturer of generic pharmaceuticals, has invested more than $10m in cloud HR technology as it grapples with difficult trading conditions in the drugs industry.

The company, based in Petah Tikva, Israel, has faced a tough 12 months after losing exclusive manufacturing rights on its flagship multiple sclerosis drug,  the announcement of 7,000 job cuts and plans to pull out of 45 countries by the end of the year, and the sudden departure of its CEO.

“From a business perspective, we are in challenging times,” said Anat Markus, senior vice-president HR operations and services, in an interview with Computer Weekly. “The entire pharmaceutical industry as a business is going through difficulties.”

Teva decided to invest in cloud-based software to manage and analyse the data on its employees in more than 60 countries following a period of rapid growth through acquisitions, back in 2014.

The company’s workforce had grown from 7,000 to 56,000, but with more than 30 different HR computer systems in use across the organisation, managers had no easy way to identify the skills of the workforce, plan succession for important posts, or retain key staff.

“The business strategy was to grow through acquisition and it was a fast-phase growth,” said Markus, speaking ahead of an industry conference. “The focus was more on acquiring the relevant companies and less on end-to-end integration.”

That changed three years ago when the company decided to capitalise on the assets and employees in the companies it had bought by integrating them into a single organisation.

“We wanted to be holistic enough to support all our countries”

Anat Markus, Teva Pharmaceutical Industries

Teva had already decided to standardise on SAP’s enterprise resource planning (ERP) software. It decided that using SAP software, including Ariba, SAP’s online marketplace software; Fieldglass, a package for managing part-time workers; and SAP’s ERP would make it easier to link IT systems across the company.

The first step was to create an HR data model that could define the roles of employees across all countries. Translating local data to the global model was one of the biggest parts of the project, said Markus, who will speaking at the  HR Tech World Conference in Amsterdam. "We wanted to be holistic enough to support all our countries,” she said.

Rather than attempt to transfer legacy HR data to the new HR system, the team downloaded the data from each HR system into a PDF file and stored it in SuccessFactors. That enabled the process to be completed very quickly, said Markus.

By July 2017, Teva had gone live in more than 60 countries with SuccessFactors’ Employee Central, a suite of software that includes talent management, workforce analytics and succession planning.

Meeting business challenges

The project has provided managers with accurate data on the skills and location of employees, which is proving critical to the company’s turn-around plans.

Information that can help managers make cost savings, or make improvements to the business, is now accessible and the data is high quality, said Markus.

“I don’t think any of the business challenges we face today would be possible [to overcome] if we did not have an overview of our talent,” she said. “Everything from our succession plan to our retention plan to our engagement programme, all rely on data we have managed in the suite.”

In August last year, for example, Teva completed its subsequently controversial $40bn acquisition of Allergan’s generic drug business, Actavis Generics, bringing an extra 15,000 people into Teva’s fold. From day one of the acquisition, managers were able to review the complete data on the new workforce.

The cloud HR project has enabled Teva to centralise its HR operations to three shared services centres covering eastern Europe, Asia Pacific and other locations – bringing savings to HR running costs.

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Rather than managing administration, Teva’s HR staff can focus on managing people, said Markus. “It enabled us to grow and look at our processes, to make sure they are the right ones for the time and the culture,” she added.

Before moving to cloud HR, each country had to send Excel files with their headcount figures once a month, which would be converted into a standard format and the results collated to calculate the employee headcount.

“With 30 local systems, it was hard to know where our talent was, their cost, their jobs, their roles, how long they have been with the company,” said Markus.

Now managers can see details of the workforce, where people are based, the skills they have, and where best to deploy staff.

“Managers manage globally,” she said. “Before, they could only manage locally. Now every manager can see information about employees in every country we operate in.”

Fast-paced roll-out

One of the biggest challenges faced by Teva was the need to roll out the technology globally to a tight three-year timetable. “It was significant pressure for HR managers,” said Markus. “The amount of change people had to take in was big, and the burden was significant.”

Teva hired Accenture as an implementation partner for Employee Central, and AKT to implement the talent management module.

A team of 10 to 15 IT professionals and a similar number of HR professionals worked on the project at Teva’s headquarters. Their job was to visit local teams in each country and teach them how to transfer data from their own HR databases into Employee Central.

Teva’s aim was to deploy a system that was not perfect, but had 80% of the functions in place. It was a matter of trying things, finding out what worked, and learning from mistakes.

“The most important thing is speed,” said Markus. “I think you need to lay it down, even if there are gaps, and then start introducing changes.”

Now the company is revisiting the work to fill in the gaps in the HR system. It plans to review the roles and responsibilities of HR staff and managers, and take action to encourage the workforce to use the HR software.

Learning lessons

At the start of the project, the work was led by the IT department, and was regarded internally as a technology project.

But, over time, the project became more business-focused, and HR took over the lead from the technology team.

HR managers also changed the way they trained their HR staff to use the new system, swapping papers and manuals with simulations and role-playing.

“People were playing the roles of employees, HR managers and services managers so they could see what it looked like when it went live,” said Markus.

Talent spotting

Teva plans to start a pilot programme over the coming weeks to help it manage the recruitment of staff across all countries.

Until now, the company has used a variety of talent acquisition software in each country, but hiring people for overseas positions requires a lot of manual work.

Teva believes that the project – due to be completed in 2018 – will allow it to identify and fill gaps in the workforce more quickly, with less manual intervention.

It also plans to introduce mobile access for employees and managers to the HR system, which will make it easier for staff to keep their personal records up to date.

“We are trying, through various ways, to show the importance of keeping data accurate,” said Markus. “It is our goal to use the system for benefit programmes and learning, and as people see their data is affecting every benefit they get, it is driving them to make sure their information is up to speed.”

Markus plans to use analytics as a service to improve the performance management of employees, succession planning and learning.

The company has chosen to use analytics software from Qlik Sense to supplement the analytics capabilities of Employee Central.

This should enable it to answer a long list of key questions about its workforce, said Markus, including how to make sure the right people are compensated in the right way, and how to make sure people are getting the right training for the right role.

“We are able to show a lot of views on our talent, on their engagement, on their retention plans,” said Markus.

Working with a cloud supplier will mean new ways of working for Teva, said Markus. The company will need to be work in a more agile way, and work more closely with SuccessFactors, to keep pace with frequent updates to the software.

“We are looking to find ways to make sure the HR community knows about the changes, knows about the processes, understands how to leverage the technology, understands how to leverage the data,” she said.

Beware of shiny objects

Markus advised other companies working on similar projects to make sure HR managers understand the value of the technology. It is important to show them what HR will look like when the technology goes live, she said.

“At the end of the day, the HR team are change agents, the people who can make it happen, and make sure there are benefits,” she added.

HR managers need to know exactly what they want from a technology, said Markus. It is easy for companies to get caught up in “shiny object syndrome”, see a great product at a trade show and buy it without thinking about how it fits into their strategy.

“HR is not very good at saying what it wants,” she said. “People say ‘we need new bots, we need better access to data’. That is not a strategy. It is a list of stuff, and you don’t want your chief information officer prioritising that for you.”

In the past, technology was all about making life easier for HR managers. Today, HR technology should be there to make life easier for workers, said Markus.

“A lot of silos that are important to HR are not important to the managers and employees working for us,” she said. “They just want to get things done.”

HR chiefs need to articulate what they wants HR to be best at, prioritise that, and build a roadmap to achieve it, she said.

“If I want to be best in the world at recruiting, I have to make sure my technology and process support that, because otherwise the recruitment function buys a bunch of stuff, and it is not going to integrate back in,” said Markus.

Teva is on a recovery programme, and the difficult times are far from over. But the company’s investment in cloud HR technology is likely to make the turnaround more rapid.

Anat Markus will speak at HR Tech World in Amsterdam from 24-25 October 2017

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