HR Transformation Roadmap

What is a Human Resources or HR Transformation Roadmap?

An HR Transformation Roadmap is a step-by-step navigation to get your enterprise from the point of departure to the point of arrival, by taking a set of actions, implementing some activities and achieving some outcomes, in a planned sequential manner. HR Transformation, as the word “transformation” implies, is more than a just band-aid to fix a process or a system issue. A true HR transformation needs to be based on strategic and operating model considerations. Moreover, in today’s dynamic environment – where technology advances are driving business model changes, employees are demanding ever more regarding engagement, and the pace of change is accelerating – it is imperative that HR functions leapfrog from keepers of employee contact information records to a holistic, employee-centric, relationship management service.

Various Facets of HR:

Human resources span several critical roles:

• Business Enabler
• People Manager
• Benefits Provider
• Payroll Administrator
• Compliance Office

The human resources functional areas that are a part of HR transformation roadmap include:

• HR Strategy and Planning
• Workforce Strategy and Planning
• Compensation and Rewards
• Employee Benefits
• Talent Development
• Performance Management
• Payroll
• Hiring and Recruiting
• Learning and Development

The Drivers for HR Transformation:

There are several internal factors and external events that make an HR Transformation a strategic imperative. Typical external drivers for HR transformation tend to be the war for talent, a new wave of regulations, rising employee expectations, technology advances, and changing business models and strategy. Moreover, internal drivers for an HR transformation could be factors such as poor employee experience, lack of a holistic profile of an employee, cumbersome paperwork, and inability to use analytics to drive human resource decisions.

The Need for a Transformation:

Before one can build a viable HR transformation roadmap, it is essential that the CHRO (Chief Human ResourcesOfficer), and his/her compatriots in the C-suite realize and acknowledge the need for HR transformation. It is important for the top management to distinguish ongoing operational and process improvements from the fundamental need to rethink HR and transform it to the digital age. For example, continuous improvements, such as Kaizen, are a typical evolution of the HR function. However, a reimagination of the operating model, the re-engineering of core processes, and the major re-architecting of the systems are when an HR transformation roadmap is warranted. The roadmap must be an integral part of an overall HR Transformation Framework.

The HR Transformation Process:

Once there is a realization that an HR transformation is warranted, the next step is to establish a core team and fund the initial efforts for creating the HR Transformation business case and transformation roadmap. At this stage, what is needed are strategic thinkers and operational experts who can envision what’s “Next.” The change program is still at a conceptualization phase, not an execution phase.

An Approach to Building an HR Transformation Roadmap:

Compile the Goals, Objectives and Desired Outcomes:

Based on the strategic imperative and internal drivers, document the key goals, objectives and desired outcomes. Knowing these high-level goals will help frame the context for theHR transformation roadmap.

Typical Deliverables:

• Internal factors
• External drivers
• SWOT analysis
• BHAGs (Big, Hairy, Audacious Goals)

Document the Current State:

Documenting the current situation of HR function will be a multi-dimensional effort. The important thing to understand here is what depth do you need to go? If there is a consensus that the transformation is not about a step function improvement, but a leapfrog, then the current state may not be a material factor. In such a case, one can get away with anecdotes and interviews to summarize the current situation.

Alternatively, on the other hand, if the goal is to not to repeat the history and to understand the details and depth of the current state are valuable, it may require documenting current state processes, the inefficiencies, and bottlenecks. This exercise, while valuable, also will be time consuming and expensive.

Typical Deliverables:

• Current state process analysis
• Current state of technology analysis
• The present status of people analysis – competencies, capacity, etc.
• Current state legal, compliance and risk analysis

Envision the Future State:

Future state envisioning is a major step in setting a marker way into the future. The future state process should not be encumbered by the current systems, processes, and people. It should be a blue-sky picture of an ideal state. (Of course, this will be tempered later regarding cost-benefit analysis and realization realities.)

Typical Deliverables:

• Future state vision
• Scenario Analysis and Wargaming
• Future state technology vision and implementation approach. (An SHRM article covers this topic well.)

Conduct Gap Analysis:

The ideal target state defines your point of arrival, and the current is your point of departure. The gap analysis shows how much of a chasm do you need to cross before you can reach your desired state.

Typical Deliverables:

• Gap analysis between current state and the future state
• Quick wins

Evaluate Alternative Approaches:

Understanding that there are alternative approaches to transformation and assess the options dispassionately is a critical step in crafting an HR transformation roadmap. In addition to discussing the plan, a high-level ROM (rough order of magnitude) estimates of cost, effort, and complexity would be valuable. Similarly, a high-level listing of potential benefit streams – qualitative and quantitative will provide a balance to the expenses.

Typical Deliverables:

• Strategic options and analysis
• Solution options and analysis
• ROM cost estimates
• High-level benefit streams per option

Select the Recommended Path:

The recommendation from the project team should be based on several considerations – cost, effort, complexity, and the result. The recommended path should ideally comprise of a target operating model. A target operating model is a blueprint of the future state functions, processes, people and information as levers to accomplish the new business state. Much of this is based on high-level estimates and several assumptions, but that is what is typically the case in real life – decision making with much ambiguity.

Typical Deliverables:

• Options comparison and recommendation
• Analysis of the recommended path – risks, rewards and realization framework

Craft a Transformation Roadmap:

The detailed transformation roadmap will typically consist of a full quarter by quarter activities, outcomes, and milestones for the first 24 months, and then for subsequent years a phased set of roadmap items. Typically, the transformation roadmap will comprise of high-level work streams and phases so that incremental delivery is possible.

Typical Deliverables:

• Transformation roadmap with phased and sequential deliverables
• High-level work streams and structure

What about the business case?

A business case – both qualitative and quantitative – may be necessary for the three stages. Stage one can be at the initial funding to evaluate the value and viability of a transformation. Step 2 business case is during the recommendation of the change approach. Stage 3 business case can be at a workstream level.

What’s next?

Of course, a transformation roadmap is a strategic deliverable. The real work will start soon after that on various projects and work streams. That is out of the scope of this article, but we will address the implementation separately. Or contact us for rapid and low-cost advisory services to craft a compelling transformation strategy and roadmap for your enterprise.