Article: Ericsson case study: Solving HR Shared Services paradox

HR shared service

Ericsson case study: Solving HR Shared Services paradox

In the world of HR Shared Services, success lies in agility, comprehending customer needs, transforming needs into action and ability to provide 360 degree view to delivery, right from requirement gathering to delivering output.
Ericsson case study: Solving HR Shared Services paradox

Over the last 15 years, HR Shared Services has evolved manifold from just offering cost effective solutions to now evolving into a value added process in the overall HR function. Typical to any industry and sector, the asks have been ever changing and now reaching to an inflection point where the demands are mutually fighting to gain their share of existence and impact on decision making. 

Though there are many equations which need to be solved with limited set of resources, what we have seen is that the below situations continue to pose a paradox for all who are managing this space. Let’s see how we have tried to decode this over the last couple of years. 

  • Transactional Versus Tactical 

  • Industrialized Versus Customized

  • Predictable Versus Need Based

  • Globalized Versus Localized

  • Cost effective Versus Customer Centric

  • Do more with same or Less

The very objective of setting up a HR shared service center is to shift the heavy transaction-based, repeatable activities so that it can be done at a lower cost and in a structure way. But when we continue to do these activities over a period of time, we tend to develop the Subject Matter Expertise in them and end up sitting on a mountain of information. Expectations are now to make logical sense out of this data and see how we can be more tactical and value based in our delivery. Moving from transactional to tactical comes with a cost and also requires shift in the resource mix as the initial expectation was cut cost. 

What we have seen is that in such a paradox we have to break our manpower and split them into low cost transaction based versus high impact skill based and run this in a factory model where first few pit stops are focused on high volume and repeat transactions and last few pit stops focus on trending and analysis and making out meaningful insights from the data thus converting loads of XL data points into executive insights. Its seen people who are most close to data/transactions are the ones who will be able to provide real to life and implementable executive inputs as the feel the pulse of business on a real time basis.

As we further evolve we are struck with a decision do we keep our costs low and provide industrialized solutions which are one size fits all or do we allow room for customized and need based solutions. The decision is tough as the very essence of Shared Services is to provide low-cost predictable solutions in a controlled environment which are not impacted by opposing vectors. But the kind of environment we all operate, the only thing which is not available, is “CONTRLLED ENVIRONMENT.” We all love to operate in static environments with minimum ambiguity but we can only wish. 

In our experience it is seen that we can both be predictable and industrialized along with customized and need based. Though it sounds difficult, but there are ways to achieve this. The levers to provide such opposing solutions are tools which are customized /configured on real time fashion while processing, dynamic work force model which can the compressed and stretched over short periods, and not but the least, dynamic pricing models. And now there has to be fair mix of force which has to be used on all these 3 levers: Tool, Pricing, and workforce. We have seen by using these levers and breaking the output into High Volume, seasonal, cyclic, level of complexity, and Spread we can create working business models to solve this challenge of industrialized vs customized. 

We touched the topic of cost, it is important to discuss what kind of cost are we talking: Build Cost, Maintain Cost, Invest Cost, or Lost Cost. Sounds tricky but each of these costs have impact on the longevity and effectiveness of the solution in the shared services model. Build cost normally promotes Industrialized solutions, Maintain costs promotes low-cost solutions, Invest Costs promotes customized and business critical solutions and lost costs contributes to cost saved on any of the said parameters but server impacting all other parameters.  

Moving on to discuss our customers, they are always of an opinion that the level of support a Shared Services Center provides can never match the Real time, face to face support. What we have seen that this is true and it takes a lot for a shared services model to move customers away from this thinking. 

So what does it take?  Normally our solutions are designed in workshops where both the requestor and implementer have opposing agendas. Requestor wants the solution to be as close to business requirements and implementer wants it to be as linear as possible with documented dependencies, SLAs, KPIs, etc. 

What we have seen is that the solution should be able to solve customer needs but any deviation, exception, segmentation should be clearly documented and both requestor and implementer should work towards managing them. The agreement should be made to manage those deviations and the impact of those in terms of cost, efficiency, and timelines. For end customer, the process should run seamless. 

We all in the world of cloud solutions and these solutions are available for all areas like HRMS, CRM, telephony, Knowledge management, etc. Cloud solutions come with a defined way of working.

While going for these solutions, the other paradox which has to be solved while keeping customer satisfaction in mind is whether we fit our processes to solutions and should we force fit our solutions to the processes. There is no right answer. Again it depends on the factors of size, complexity, maturity, segmentation, of the processes. Stronger these factors are; it is advisable to tailor the processes to suit the solutions. If not possible, create patches and secondary and tertiary solutions to be implement which can comprehend these factors and lead to seamless results. 

The expectation to do more with same or less resources has been mounting as the organizations are faced with the challenges of reducing cost. Below are some levers which we have used to create more efficiencies and bandwidth to solve the mounting cost pressures.  

  • A fair mix of options and decision making between Lift and Shift versus Fix and Shift Implementations

  • Mix of Centralized vs decentralized delivery options to manage process complexity, variations, language, and local requirements and making this a dynamic, fit to requirement model

  • Robust case management and knowledge base enablement. 

  • Multi tear governance model

  • Clear scope, hand offs, SLAs, and KPIs. Agility to align them to business requirements. 

  • Enablement of Center Of Excellence in all delivery areas and breaking the teams in Transactional, Tactical, and Strategic to handle different facets of delivery

  • Centralized reporting and automation 

  • Moving to DIR Model (Design, Implement, and Run) which focusses on beaming the right skill set and competency mix for the right segment of delivery component

  • Trending and Forecasting models to establish trends and patterns basis past and ability to modulate future using this

I can end by saying that there is no Golden Rule for Success. In the world of HR Shared Services, success lies in agility, comprehending customer needs, transforming needs into action and ability to provide 360 degree view to delivery, right from requirement gathering to delivering output. 

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Topics: HR shared service

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