Gain Buy-in and Ownership | The Business Rationale

One of the main tenets of this book is that successful HR transformation is achieved through the effective management of change. In order to do this, the principles and practice of change management must be an integral part of each element of the transformation, in particular through the adoption of a process consulting mindset. The development of the business case is no exception and in this final section, we explore the elements of change management that are particularly pertinent in business case development.

In business case development, it is important to identify who the main benefit owners are as they must buy in to the benefits predicted in the business case and will, therefore, be highly influential in driving the change to achieve those benefits. The mechanism for achieving that buy-in is their involvement in developing the business case so that it is something developed collaboratively rather than imposed.

The impact of HR transformation on both HR and the line managers in many cases goes to the very core of people's working lives, and therefore taking the opportunity to involve individuals from these groups in the business case development process will begin to lay the foundations for them embracing the changes that HR transformation will bring and reducing resistance. However, gaining the 'buy-in' of stakeholders is not a one-off activity. Maintaining the 'buy-in' of stakeholder groups across the organisation is an ongoing task. This task also has to be a collaborative process where stakeholders are able to shape and influence the benefits that will be delivered. Imposing the business case will only entrench resistance.

Through this process of involvement, it is useful to identify change sponsors and change leaders. They are the people who are going to play key roles in implementing HR transformation within the organisation, and will occupy a range of roles throughout the business rather than being members of the programme team itself. It is vital to get them involved in the development of the business case so that, by the implementation phase, they are fully engaged and able to demonstrate their understanding of the impacts of change to their functions and to the wider business.

Change sponsors provide 'public' support — both in their actions and in what they say. Sponsors must be capable of representing the transformation to colleagues in a convincing way. They are usually in senior roles, and as such often provide staff and resources to support the change within the business. They must demonstrate 'publicly' that they buy in to the consequences of the change proposed in the business case, and often members of the programme team will support and coach the change sponsors in the execution of their role.

As you cascade further through the organisation, you will identify change leaders who are usually part of the change sponsors' organisations and who are in a position to help drive the change within their areas. Change leaders will be in a variety of roles, for example, business partners or line managers, but they will all be respected by their colleagues and be working at the local level. If they can be identified and involved in the business case, they will be able to work with you in moving from planning towards implementation from their positions at the heart of the business. The role of change leaders and the relationship between sponsors the organisation is illustrated in Figure 1.

 

Figure 1: Relationship between change sponsors, change leaders and stakeholders.

Here are some practical approaches to involving HR and line managers in developing the business case that we have found to work effectively.

• Speak the business' language

It sounds simple, but unless you communicate in a way that your business colleagues will understand, the message you are trying to give will be lost. Consider involving a group from the target audience to check and rewrite the message. Why not ask them to take responsibility for it? In doing so they will become engaged in the programme.

• Place yourself in the business' shoes

The impact of HR transformation is often misunderstood or is seen as much larger in the minds of managers than in HR. Requiring managers to phone a service centre when they used to be visited by HR is a significant change and can create feelings that HR has 'abandoned' the business and is too far away to understand frontline issues. It is, therefore, important to consult with the business on what is important to them.

For example, the CEO will be focussed on delivering strategic objectives, the FD on financial savings, operations staff on delivering products or services, the IT Director on the benefits of using technology such as self service.

In a large government department, the HR transformation phase began by holding focus groups with each of the main professions, delivery units and back office support teams. These sessions were designed to drive out the key issues facing these staff groups and define what they wanted from HR. This enabled the programme to be clear on what could be provided and what benefits would be delivered to each group and to define what couldn't be provided and set clear expectations. This helped to dissipate many of the objections and resistance.

• Lead by example

This is an ideal opportunity for HR to demonstrate its changing leadership role in practice. Many of the benefits of HR transformation lie in how effectively line managers and employees take on greater responsibility for the management of their careers, as well as a more active role in people management. Engagement with line managers when building the business case demonstrates that HR is both serious about the change and that it is concerned that managers believe in and buy into the benefits that HR transformation will bring to the organisation.

This approach is also an excellent way of ensuring that HR does not develop the business case in isolation from the rest of the business, and that the business stays involved after the initial engagement. This reduces the risk that the business perceives that the programme has gone into a black hole and is then suddenly hit by implementation. This approach also tests the HR transformation solution from the business perspective, providing the mechanism for the business to raise potential design issues early in the process.

• Use demonstrations of new service delivery channels

Demonstrations given very early on can be extremely powerful in getting people excited about what the transformation could look like. They help people really to understand what the HR systems delivery channel in particular will look like and what their role in that will be. Demonstrations can be easily organised — in fact, many software vendors will stage them for you.

Similarly, opportunities exist to demonstrate shared services and outsourced delivery channels. Site visits provide a good opportunity here, as do conference room pilots (physical demonstrations of how a process will work with simulated hand-offs and processing).

• Ensure the commitment of those who have responsibility for benefit delivery

Ensuring that benefit owners include in their budgets the effect of the anticipated benefit accruing to HR transformation is a highly effective way of demonstrating their commitment to HR transformation and of concentrating their minds on the implications of the changes. This approach is particularly effective where cost savings are concerned and where benefit owners need to commit to business case cost savings.

• Deliver some changes early in the programme

Delivering change early sends a message that change is possible and is beneficial. For example, delivering HR self service in phases enables staff to become comfortable with basic tools, such as updating personal information. Later phases of self service then gradually introduce staff and managers to tools that will enable them to book courses on line, more accurately record and manage sickness absence or better manage performance. This approach enables staff to become comfortable with self service and to start taking responsibility for managing their career and staff, whilst also delivering early savings within areas such as HR administration.

This approach enables transformation programmes to not only deliver concrete benefits before the whole programme is completed but also starts to change behaviours early, so that when the larger changes happen, people are ready for them.

Costs | Business Rationale

Benefits are only part of the story in the business case. All benefits need to be balanced with costs. When identifying costs it is important to consider both one-off costs — that is, those attributable to the delivery of the HR transformation programme — and those costs that are ongoing — that is, those required to maintain the HR transformation solution. The following table provides guidance on this classification and example technology and people-related costs.

Cost	Description
One off/transformation programme related costs
Capability development	Redeployment and redundancy costs
Programme resource	Internal and external labour costs on the programme team, also including wider business costs covering development-related costs such as design workshops, testing and training
Content	Development of initial self service content
Hardware	Server and associated implementation costs
Network	Costs of capacity to deliver HR to the desktop, telecommunications-related costs for service centres
Method of access	Providing sufficiently high-specification machines and software to access HR functionality
Licences	Initial software licence costs
Ongoing/maintenance costs
Content	Maintenance of content
Capability development	Development of skills and expertise to manage and maintain processes and systems
Support	Both IS/helpdesk support and business support
Operational	For example: software upgrades and licence maintenance costs, costs of running a service centre, outsource charges, HR staff costs, etc.

Often some of the most significant one-off costs are those surrounding the people element of the solution or the capability development costs that support the main tenet of HR transformation — that is, the move from the administrative and transactional to business partnering.

The components of the capability development costs typically include:

• Increase in resources to support senior managers. HR transformation will result in an increase in resources dedicated to senior management support in the form of internal consultancy and business partnering. Some of these resources may already exist within the organisation, some may require a capability development programme, and others may need to be recruited externally. The cost implications are that whilst a smaller number of business partners may be required than the current HR generalist population, the total employment costs for this group may be as great as or greater than the current HR generalist population.
• Redundancy and redeployment. The combination of a reduction in administrative and transactional resources and an increase in consultancy and business partnering resources implies a reduction in the requirement for traditional HR management and HR transaction support. Clearly, some HR managers will move to business partnering roles and some transaction focused staff may move to service centre teams, but this will not be the case for all, and provision needs to be made for the costs of redeployment or redundancy.
• An increase in the capability and skills of HR staff. The implementation of new strategic roles, such as business partners and new roles in the service centre, such as helpdesk support will require HR staff to adopt new ways of working. These roles will also require new capabilities and skills, which HR staff may need to develop. It is, therefore, important to understand existing capabilities and to estimate the cost of investing in development courses and programmes to address any capability gaps.
• An increase in line managers' capability. Investment in line manager capability and increasing the amount of people management undertaken by the line can be a key factor in some HR transformation exercises. The degree to which line managers have become or are becoming responsible for people management processes such as sickness absence, performance management, career development and managing disputes varies across organisations. In some organisations, there is an increasing move to develop line managers into people managers who require limited support from HR. In other organisations, this is not the case.

However, regardless of the degree of people management responsibilities transferred for line managers, it is important to clarify to line managers exactly what people management processes they are responsible for delivering. It is, therefore, important to define the role of line managers and understand the level of training and support that line managers require to successfully deliver this role. This can include:

• training to use self service, delivered either through a classroom, interactive Web training or computer based training packages;
• training on how to manage specific issues such as sickness absence or performance management. This can be delivered through a classroom or through on line courses where line managers are shown scenario's and asked questions relating to the scenario's and given direction on correct responses to different situations and pressures;
• management and leadership training or training on such skills as how to manage conflict and resistance;
• HR guidance training where managers are advised through short courses on the people issues that they will have to manage, given the latest policy guidance and shown where, when and how to access support.

Capability costs are, however, only part of the investment requirement. HR transformation may also require an investment in HR technology. This provides a good opportunity to engage with colleagues from the IT function at an early stage. Key questions for IT include, do you enhance what you have by upgrading or is a new system the only feasible option? Working with your IT colleagues here will assist in getting the right solution and builds buy-in with the IT community.

Technology providers will usually be pleased to demonstrate their products and this can be an excellent way to capture the imagination of colleagues. However, do make sure that the technology provider covers their implementation strategy and other non-technical areas, as the technical elements of the solution are only one part of the costs. Key technology costs include:

• Labour. This will involve HR, IT and business staff as well as, usually, external consultants on the core programme team. It is also important to estimate the costs of providing cover or backfill for the HR and business people seconded to the programme team which may be needed and not to overlook 'hidden' costs such as HR and line people participating in workshops, testing and training.
• Developing content. HR technology is of no use unless the content supports the new ways of working, for example, online learning materials or performance management tools. There will be both one-off and ongoing maintenance costs associated with content.
• Software licences. It is important to consider the net effect of these, which is netting them off against the costs of the systems that are being removed. This is usually done by including the removal of the other systems in the benefits calculation.
• Hardware costs. Look out for opportunities to share costs and economies of scale with other programmes that are in progress.
• Method of access in order to interact with an HR system. Clearly, it is critical that employees have access to it. Costs will potentially need to cover laptops, desktops and other mobile devices, kiosks and possibly even home PCs, depending on the access solution defined.
• Ongoing support and maintenance of the solution. There will also be contractual costs if there are any outsourced arrangements here as well as the costs of system upgrades and other maintenance going forward.

Case Study

The HR leadership team of a UK government department wanted to seek ways of reducing resources engaged in routine administrative tasks, and to concentrate resources on supporting departmental managers in delivering government targets.

The solution was to implement new HR technologies and a new model and governance structure for the HR service. The key changes within the HR service included:

• re-engineering HR processes to use HR technology and self-service tools to improve the performance of administrative processes and reduce costs;
• the development of an HR shared service centre;
• the creation of expert policy teams and centres of excellence to harness scarce HR expertise and provide strategic HR advice to the Board;
• the establishment of a small group of strategic business partners to work with leadership teams within the department's different business units.