Global talent management in action: Siemens - success through business execution
Creating a global talent management system used by 400,000 users across 80 countries working in 20 different languages in a period of 18 months; it's a daunting challenge but one achieved by electronics giant Siemens working in partnership with SuccessFactors.
Using Cloud Computing and Business Execution principles, the German firm has brought about global transformational HR change that directly supports the core needs of the business.
Challenges of global business processes integration
Like all businesses operating in an ever more competitive global marketplace, Siemens needs to manage its talent and ensure that it has access to top people in the right roles performing at their best. This is inevitably a significant challenge, made all the more complex in Siemens case due to the disparate nature of the firm's HR systems around the globe.
Siemens has a presence in 190 countries worldwide. While 32% of employees are based in the home market of Germany, the firm has significant headcount in the Americas – 23% of the global total – and Europe, Middle East and Africa (EMEA) (28% of total). The firm also has stakes in emerging markets and high growth economies that present particular issues when managing talent. Globally Siemens is committed to growth and this is reflected in its ambitious HR and recruitment activities. In 2009 alone, worldwide headcount was boosted 51,500 new hires with the largest increases coming outside of the domestic German market.
“The challenge we face as a global company is getting transparency on our talents,” explains Jurgen Strahwald, Vice President Corporate Information Technology Governance at Siemens. “We had different applications in different countries of where the talent was and who the talent was. With countries like Germany we had a pretty good view but when we talk about emerging markets and fast growing economies we weren't able to attract the best talent.”
Strategy for business transformation
Against this background it was clear that in order to better support Siemens’ business growth objectives there was a need to transform the existing HR strategy to become a Global People Strategy. This would result in a global, seamless process to define minimum standards and create 'One Truth' about employee data for regions and the corporation as a whole as well as drive excellence in HR operations worldwide.
At the heart of the entire strategy would be a simple principle. “It was about having the right people for the right job,” recalls Marion Horstmann, corporate vice president of HR, “and linking employment strategy with global business strategy.”
Beyond this, specific deliverables to support this objective included a need for:
- Active Employer Branding
- World-class recruiting
- Global leadership and learning development
- A global master database
- Effective KPIs
- Systematic development, remuneration and retention of a global talent pool
- Integrated applications for all people processes
- A common language worldwide
- A global business view that worked seamlessly with a cluster view
At the same time that this re-evaluation of HR strategy was taking place, Siemens was undergoing a strategic IT transformation to rightsize its IT organisation and streamline major parts of the services organisation.
Globally Siemens IT organisation is a layered structure, headed by a CIO Board which acted as the decision-making body for the entire company. This Board works alongside the Corporate IT function which was responsible for management of the company-wide IT portfolio and strategic IT purchasing across the entire firm. In addition there are a number of Sector IT Units which hold responsibility for business-specific design and implementation of IT strategies in markets such as healthcare and energy. Finally there are decentralised IT units that operate as Clusters to focus on local demand management, implementation and IT operations.
“We faced a lot of challenges,” notes Siemens CIO Dr Norbert Kleinjohann. “We saw a strong globalisation of our business which enforced the need for a common backbone to better enable worldwide transparency. We needed as an IT organisation to address the challenges of emerging markets, often with less sophisticated software, which meant changing from a one size fits all mind set to a mix and match one.
“There were corporate initiatives to streamline processes towards one HR, one finance and so on and that meant a need for standard IT solutions. We had a target to create an integrated solution that could support a high performance culture which meant we needed a professional people management system.”
Gaining competitive edge
Critical to the development of a new IT structure would be an assessment and understanding of what areas of the IT operation created differentiators for the organisation and what could be classed as commodities. Those that were differentiators that enabled Siemens to have a competitive advantage over its rivals needed to be a top priority for IT, while commodity functions could be supported by using best-in-class or out-of-the-box standards based technologies.
Strahwald explains: “Whenever we can make use of the core competencies of others where we can have highly reliable, cost effective solutions we should go for it. I see this as an opportunity. If we focus as a CIO on demand management and supporting the business and not just on building and supporting IT infrastructure, this is where we can really create value. Targets can be related to the business targets.”
As this IT transformation was rolled out, a critical component was the implementation of various corporate departmental initiatives such as 'One HR' and 'One Finance'. This dictated a need to find standard IT solutions that could be deployed at a global level, including a People Management system.
Faster time to value through the cloud
Sourcing a global HR solution meant IT working closely with the HR team to identify specific needs and potential providers. “We assessed our business demand against the market standards, managing the IT selection process alongside the HR people,” says Kleinjohann. “We also strictly reduced our 'must haves' so that the only 'must haves' we had were those demanded for legal or worker contract reasons.”
After specific requirements were identified, a long list of 50 possible suppliers was drawn up, both on premise and in the Cloud providers. Cloud Computing or Software as a Service had a particular appeal to Siemens as its benefits included:
- Shorter implementation times
- A pay-as-you-use model that reduces upfront costs and lowers total cost of ownership
- Scalability options without the need for upfront provisioning
- Allows for minimal IT support
“Cloud Computing is a very important sourcing option that allows us to focus on our core competencies,” says Strahwald. "We do not see Cloud Computing as the only viable option. Whenever we can make use of the power of the Cloud, we do."
Executing on success
In March 2009, Siemens selected SuccessFactors as its partner for the 4Success programme. “We awarded the contract to SuccessFactors in March 2009, based on functionality and usability and the provisioning of an integrated solution with consistent data models,” says Kleinjohann. “For example, we wanted to be able to identify candidates from both external and internal points which lead back to the need for a consistent data model.”
The plan to use a Cloud Computing provider for a global initiative on such a scale attracted a good deal of attention with commentators seeing it as a significant benchmark for the Cloud delivery model. “The Siemens deployment will serve as a test case to see if solution depth has finally reached a 'good enough' level across the broad suite for the largest, most complex organisations. If successful, it will be further evidence that SaaS is suitable for large, broad and complex talent management suite deployments,” commented James Hollinheck of research house Gartner when the partnership between Siemens and SuccessFactors was announced. “This is a complex project. Significant process re-engineering, data conversion, interface development, and change management will be required for success. Full deployment of the entire talent management suite globally will likely take several years.”
In fact, the deployment was far quicker. One of SuccessFactors differentiators was its commitment to the principles of Business Execution through its BizX offering. While traditional enterprise applications are about automating processes and transactions. Business Execution posits that customers need applications that help knowledge workers to achieve their goal and companies rapidly communicate their strategy, and align it throughout the company and execute. “It is a different approach,” notes Kleinjohann. “You need highly skilled project management and change management people. You move from IT service management to IT service controlling whereby you're not providing the service to users but controlling the service being provided.”
Accelerated deployment - live in 58 countries
With SuccessFactors working alongside Siemens, progress on 4Success, the company’s internal name for the programme, was rapid, boosted by the alignment of goals and execution through the use of Business Execution software. By October 2009, Target Setting went live worldwide followed by Recruiting Management going live in 58 countries by July of 2010 alongside Evaluation, Roundtable and Learning modules.
By the end of 2010, there were seven modules in place – target setting, performance management, compensation management, roundtables, career development planning, recruitment management and employee profiles – a rapid rollout empowered by the combination of Cloud Computing and Business Execution. “Cloud Computing means you can accelerate deployment dramatically,” says Kleinjohann. “We went live within six months with the target setting module which we rolled out to 170,000 employees. We now have 400,000 employees information loaded into 4Success and have 40,000 log ins per day.”
For 2011, Siemens plans to go live with three Variable Payment Programmes and go live with Source in the US as well as further optimising the system which has already achieved transformative results for the firm. Employee data is now transparently shared across the entire organisation in a standardised format, meaning that internal candidates across all global locations can be compared like-for-like, and key skills identified. “We can now run reports on a global basis, which we couldn’t do before because we never had that type of transparency,” concludes Kleinjohann: “That has changed the way we operate.”