HR Management: Playing a Vital Role in Mergers

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HR Management Playing a Vital Role in Mergers
Acquisitions

• Jim Candler
• VP Global Customer Success
• HumanConcepts

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Agenda

• MA Reality
• MA and Re-Orgs How Should HRManagement
  Contribute?
• Tools with Moving Metrics
• MA Success Strategy (Case Study)
• Tool Review
• Question and Answer
• Conclusions

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About HumanConcepts

• Leading provider of workforce modeling and
  intelligence solutions
• Developer of OrgPlus
• 50,000 organizations worldwide
• 400 of the Fortune 500
• Over 15 million employees being charted
• Over 3,000 Oracle, PeopleSoft and SAP customers

4
MA Reality

• Objective Create a more competitive,
  morecost-efficient company
• Enhanced brand strength
• Greater market share
• 2008 international merger activity will pass 4
  trillion mark
• Two-thirds of MA fail to live up to expectations
• 83 of MA fail to add shareholder value
• 50 of mergers are deemed complete failures by
  market analysts

Sources JPMorgan, Mercer HR Consulting
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MA How Should HRManagement Contribute?
Increasingly, the companies that win are those
that learn faster, act quicker, and adapt sooner.
They compress time by making and executing early,
informed decisions about economic value creation,
ruthless prioritization, and focused resource
allocation. Mark Feldman Michael Spratt Five
Frogs on a Log

• Shorten time frame to introduce merged
  organizations
• Reduce overall costs of MA
• Ensure C-level team has accurate employee
  information and analytics to make informed
  strategic decisions
• Help the company better organize people to work
  effectively

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MA Process
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MA Challenges

• People issues
• Loss of key staff
• Culture clash
• Poor communication between employees from source
  organizations
• Improper socialization of multiple organization
  change scenarios and proposals
• Poorly designed and hastily assembled
  organizational unitsprocessed without
  underlying analytic comparison
• Spiral effect
• Organizational uncertainty creates unproductive
  behavior resulting in more uncertainty
• Time-consuming regulatory compliance issues
• Management requires solid information quickly or
  must go with what they have
• Upper levels of organization are completed
  quickly
• Lower levels (where work is done) are left to
  their own devices

Slide 7
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Re-Org Challenge Summary

• Management concentrates on a shiny object,
  squeaky wheel or noisy regulatory matter as
  opposed to organizing people to get the work done
  better
• Rush to judgment and final organization
  structure is just delivered
• Perhaps an Interim structure should have been
  considered perhaps organizational constant
  change is appropriate
• However, the re-org process is just too painful
  to spend the proper time getting it right . . .

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MA Success Strategy forHR Management

• Introduce workforce modeling technology to manage
  MA and reorganization processes
• Promote organizational change with reviews and
  multiple change scenarios at all levels
• Avoid organizational rush to judgment by
  significantly easing the organizational change
  process itself
• In real-time Design reporting relationships via
  a collaborative process with multiple scenarios
  and embedded analytics

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MA Success Strategy forHR Management

• Visualize entire organization structure not
  just upper levels
• Organizational change proposals should come
  fromlowest level possible
• Best lower level organizational decisions are
  made locally, not in the boardroom
• Global organizational collaboration is key
• Executive team has access to accurate, real-time
  employee data and analytics
• To ease the change process Key organizational
  information must be disseminated rapidly via a
  graphical user interface

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Vendor Options

• OrgPublisher From Aquire, Dallas Texas
• www.aquire.com
• OrgCharting via Published charts
• Interfaces with most HRIS/ERP sstems
• OrgPlus From HumanConcepts Sausalito CA
• www.orgplus.com
• OrgCharting via enterprise web application
• Organization Management and Modeling
• Recent addition of web-modeling features
• Organization MGT via Unify option
• OrgManagement From Nakisa, Montreal Canada
• www.nakisa.com
• OrgCharting via web application
• Organization Management and Modeling
• Partnered with SAP
• SmartDraw From San Diego, California
• www.smartdraw.com
• Basic OrgCharting

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How Org Charting Software Works
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How Collaborative Re-Org Tools Work
Action back to Data Source
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The Players
Editors
Modeling Admins
Create new options Revise, compare
scenarios Submit Final Draft
Approve Final Draft Action
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A Brief Example
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Customer Case StudyCompany Background

• Large global organization
• Merging 30,000 employees with 20,000 employees in
  three autonomous divisions
• Multi-billion dollar transaction
• End result 50,000 employees in 80 divisions
  worldwide consolidated into a single organization

Slide 16
September 26, 2009
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Customer Case StudyBusiness Challenges

• No reliable global or regional HR system
• HR data housed in various HR, ERP, provisioning
  systems and data warehouses
• Partial employee data with no common unique
  identifier
• Acquired companies had no viable organizational
  hierarchy - except on paper
• Personal data regulations varied by country and
  region
• Over 80 HR departmental leaders worldwide in
  separate IT environments with inconsistent
  technology access and varying degrees of people
  data accuracy
• Globally collaborative and intuitive
  system/process needed with rapid implementation

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Customer Case StudyRequirements

• Secure global access via a web browser
• Collaborative work environment
• Plan, propose, model, analyze and share all
  workforce changes
• Configurable security to restrict organizational
  units to specific users
• Drag and drop movement of organizational elements
• Formula based modeling with real-time feedback of
  critical metrics
• Short learning curve
• Workflow approval
• Create a change log detailing when achange was
  made and by whom

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Customer Case StudyResults

• Created and shared thousands of workforce
  scenarios to restructure 30,000 employees into a
  single organization in less than 3 months
• All organization levels were collaboratively
  reviewed
• Significant cost savings
• By doing so
• HR prevented costly human capital errors
• Met all regulatory challenges including data
  privacy
• Bottom line
• A global, unified, well communicated and
  accurate view of the entire organization was
  delivered in 90 days.
• And . . . The change process can continue because
  the change process has been simplified

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Customer Case StudyBusiness Value

• Management team now analyzes department and
  division HR metrics constantly
• Performs organizational design and re-design
  continuous improvement
• The process itself is no longer the throttle
• Executive team ? informed human capital
  andstrategic decisions
• Spans and layers, costing, demographics etc. etc.
• Accurate employee metrics per country and per
  business unit
• Accurate costing analysis
• Organized
• To get the work done better!

Slide 20
September 26, 2009
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Q A
?
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Conclusions

• Speed, efficiency and quality is hard in reorgs,
  but you can lead progress that will pay off
  (financially)
• Get specific, beyond strategic and conceptual
• Information and how it is displayed sine qua
  non of decision-making on organization
• Data Software HR Finance SPEED
• Ignore the potential at your peril your
  competitors will not

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Contact Information
Jim Candler jim.candler_at_humanconcepts.com
415-275-9180