Programme Team | Programme Governance Tools

Extending the theme further, look at the composition of the team in Figure 1.

Clearly, the programme director has overall responsibility for managing the different elements of the programme on a day-to-day basis and keeping it in good overall shape. This person will have a major influence on the way the programme is characterised. For example, if the person is known to have a particular leaning towards technical issues, it is possible that he or she will be allowed to be the dominant consideration and skew the activities of the programme team accordingly.

 
Figure 1: Programme team.

We are not saying that someone with a predominantly technical background is not fit to run HR transformation. Rather, we are making the point that the person chosen for this role must be capable of understanding the need to keep a number of workstreams properly aligned and not fall into the trap of allowing personal preferences or comfort zones to drive the programme in a particular direction, to the detriment of others. The best way of achieving this is to keep the overall customer experience 'front of mind' and use this as the basis for driving the programme forward.

Crucially, as we have discussed earlier in this chapter, the person must have exemplary stakeholder management skills; it is likely that these will be tested to the limit!

Reporting to the programme director, you would have, in an ideal situation, someone whose sole focus is on the day-to-day coordination of the plethora of activities that are associated with a major HR transformation programme. This individual would be very much at ease with one of the recognised programme management tools such as MS Project, and be in a position to advise the director of any apparent slippages or problems that might arise that would ultimately affect the declared programme milestones.

The need to split HR transformation into three main areas of technology, process and people. Here, we look in more detail at the sorts of activities and people profiles that would typically align with those areas.

Steering Board | Programme Governance Tools

We strongly make the point that programme governance should not simply be confined to the identified programme team, dealing with the day-to-day implementation. There should be other layers of governance, as illustrated in Figure 1.

 
Figure 1: Steering boards.

The programme director should be answerable in the first instance to a steering board which provides a higher level inspection of costs, benefits and delivery milestones and becomes an issues and risks resolution forum if matters present themselves that are beyond the resolution of the programme director.

Chaired by the senior programme sponsor, the steering board should comprise a broad range of talent: senior HR people, internal audit, line managers and finance. At a higher level still, it would be beneficial to have an overarching business programme steering board that looks to see how the HR transformation programme dovetails with other change programmes that may be going on in the business at that time. It also provides a further opportunity to inspect cost benefits and delivery milestones.

The emphasis around periodic inspection of cost benefits and delivery mile-stones cannot be overstated. Whilst some may view this as an unnecessary administrative burden that simply detracts from 'getting on with the job', it is undeniably the case that without these disciplines in place the risks to the programme outcomes can become massively magnified.

Frequent inspection of costs, benefits and delivery milestones can provide comfort and assurance that the programme is basically on track. Furthermore, it can pick out those things that, if unchecked, are likely to destabilise the programme at a later point in time.

Early identification and remediation of these kinds of issues provide enormous dividends. Left unchecked, however, such issues could cause significant ramifications, if not a crisis, for the programme in its later stages.

Business Case Framework | Programme Management

It is usual for business cases to go through a sequential phase of development. This is elaborated in Figure 1.

Figure 1: Programme business case framework.

Reinforcing the points, the initial proposal may be a short document that highlights the overall costs, benefits and risks associated with the programme. If the proposal looks reasonably promising, it can then be developed into an initial business case, at the conclusion of which one should have a 60–70% confidence level in respect of the main costs, benefits and other outcomes. After that, a full-blown business case, with associated confidence levels in excess of 90%, can be worked up, and it is this that forms the ultimate touchstone for investment decisions and benefit expectations.

But who is applying the overall guidance and inspection needed to ensure that the HR transformation is not only well conceived but has a good prospect for delivering value to the business? How is the implementation monitored and measured? How are problems dealt with? To look at these matters, we need to delve further into the composition of the governance structure.

Designing the Structure of the Business Relationship

The following list highlights some of the most significant and most frequently overlooked elements of a good outsourcing arrangement. It is vital to be clear about how the business relationship will be managed by both the supplier and the customer.

The relationship plan should establish how the respective parties are going to establish trust and how the initial controls will evolve to reflect the changing relationship. In most cases, controls can be relaxed as trust is developed, but they are essential in the early stages of the relationship.

The customer should have a role in agreeing the supplier's account management, and key managers on both sides should be involved in the contract design and negotiation.

The transitional phase relies heavily on trust and collaboration between those involved, and this is where most problems arise. At this stage, it is essential to establish roles, responsibilities and processes to enable a seamless transfer of service. If there is inadequate trust between the management and the supplier, things can go wrong quickly and with dire consequences.

If these issues are addressed effectively at the outset, the relationship is off to a sound start and partnership is a realistic goal. The best way to consolidate and build on such a relationship is to establish a unit in which both the customer and the supplier(s) have a stake — emotionally, professionally and financially, if not legally. This unit, which can be called the management organisation, is the champion of the outsourcing deal. Its objectives are determined and its performance is measured in the terms of the contract. Ideally, it is answerable to a joint group comprising representatives of all the stakeholders: the business and all outsourcing suppliers.

A culture of open information is essential if both supplier and customer are to get what they need out of the relationship. The supplier needs to make a profit and the operating side of the business might want a share of the management organisation's gains. Practical difficulties can arise from this: for example, the supplier may have data centres containing sensitive information for more than one customer. These issues need to be identified and resolved early on in the relationship.

Statement of Key Deliverables | Outsourcing

These deliverables must relate to volume, training and quality of the output (see examples below). Importantly:

• These deliverables have to be buttoned down; otherwise ambiguities will later become apparent.
• If existing performance definitions do not exist, you need to establish a baseline through stakeholder perception analysis or by linking expected performance to benchmark performance of other service providers.
• Establish clear contractual key performance indicators (KPIs) to define the expected level of operational performance from the contract 
• Consider contractual measures for dealing with success and failure; that is, withholding payments as service levels fall or providing bonus payments if performance levels improve. Whatever the regime, a regular reporting schedule is necessary, including indices of performance and progress meetings.
• There should be an escalation clause in the contract to resolve disputes and ultimately terminate the contract if things have degraded to a profoundly unsatisfactory level.

Service item	Service descriptor	Service measure
Resourcing services	Permanent employee — time from receipt of an approved hiring request form to offer acceptance	Average time to offer acceptance: within 20 business days
Resourcing services	Non-PAYE contractor — time from receipt of an approved hiring request form to offer acceptance	Average time to offer acceptance: within 6 business days
Learning services	L&D projects customer satisfaction	90% customer satisfaction based on post delivery survey
Reward services	Action authorised contractual salary adjustments by agreed cut off dates	90% of adjustments to be processed accurately for pay runs
Reward services	Ensure statutory compliance in all processes	100% compliance

Figure 1: Illustrative contractual KPIs

Settling Upon the Right Sort of Contract

There are standard terms that an effective contract should cover, but overall its emphasis should be on rewarding the supplier for quality of service rather than penalising them for failure to deliver. Many contract-related problems in outsourcing relationships stem from a failure to create a living document which is flexible and reflects the expectations of both the parties. Effective contract preparation provides a sound basis for productive outsourcing relationships. The contract should cover:

• terms of the agreement,
• minimum service levels,
• ownership and confidentiality of data,
• warranty,
• exhibits,
• transfer of assets and contracts,
• staff moves,
• termination clauses,
• incentives,
• disclaimers,
• bankruptcy,
• force majeure,
• performance measures,
• anticipating change.

It is also critical to have a clear contract specification defining the scope of the work, covering the following:

• inter-relationship between processes;
• what work is handed over by whom to whom and at what point;
• if work is completely new, invite the potential contractor to propose the services they would choose, thereby standardising the production of an imaginative solution.

Hence it is at this stage, as part of the due diligence process, that you may want to ask the following type of questions. (This is not an exhaustive list, but provides examples.)