Heading to the cloud? Learn from this company’s speedy trip

Posted by Tim Ely, on June 8, 2016.

The potential benefits of moving from on-premises systems to cloud-based systems are well-documented, including lower up-front investment, reduced ongoing maintenance and costs, ease of updating, faster implementation, standardization across systems, and the like. These factors, along with a desire to transform HR to more easily access reliable data and better serve users, led one global company to migrate to the cloud in a big way—retiring more than 70 legacy systems on its brisk 15-month journey.

As a billion-dollar data marketing enterprise, the company’s core competency is providing customers with actionable insight into data. So it was particularly frustrating to company leaders that their own internal systems didn’t measure up. The legacy ERP systems had been highly customized with bolt-ons to the point where they were slow and difficult to use, required “tribal” knowledge and considerable manual labor-intensive workarounds, and inhibited upgrades, which were very complex and expensive. The result was a costly environment that frustrated user communities and the IT team that had to maintain the systems.

A “rethink” was in order on several levels:

  • Data governance: Multiple data models were in use, with inconsistent data definitions and no clear ownership of the data.
  • Process and tools: Custom, complex, and highly manual processes and a proliferation of custom systems and interfaces offered no agility or scalability.
  • Organization and people: Multiple organizational silos were in place, and labor-intensive processes kept resources operating at a tactical, rather than strategic, level and led to skills atrophy.
  • Operational metrics: Systems lacked alignment and access to key operating metrics, and their reporting capabilities lacked real-time visibility into financial and HR performance.

To correct these issues and respond to the CEO’s imperative to “make this an easier place to work,” the company mapped out a 15-month program to implement a global ERP system composed of a new Enterprise Data Model (EDM), streamlined and standardized finance (including payroll), HR, and IT processes and systems, and a full suite of seven cloud-based applications, including Workday.

The across-the-board transformation was carried out in waves, with human capital management deployed in Wave 1, payroll, time tracking, and absence management in Wave 2, and core financials, expenses, and procurement in Wave 3.

Among the greatest challenges was the need to accommodate a global platform. The company has operations in 11 countries, including China and Europe, which required not only managing the diverse functionality needs of the different locations but also meeting various regulatory and approval requirements.

Benefits realized—both expected and value-added
As expected, the transformation effort yielded a broad range of benefits. In terms of cost savings, the implementation itself was far less expensive than previous on-premises implementations had been, and the company’s annual savings are $4 million. Previous difficulties with system complexity, data transparency, and user frustration have given way to simpler and standard processes, data, and systems, a positive user experience with highly integrated functionality, and real-time access and reporting of HR and financial performance. Instead of 70 legacy systems, the company now manages seven cloud-based systems.

An unexpected benefit of the transformation was how it subsequently enabled the smooth divestiture of one of the company’s global business units, with operations in the US, UK, and Poland, on a very aggressive timeline. To close the sale on time, the divested unit had to transition to a stand-alone platform in just 13 weeks, while implementing the full suite of Workday products, including Financial Management, HCM, and Payroll. This speed and ease of divestiture was likely possible because of the cloud-based systems already in use.

Key lessons; leading practices
The scale and scope of this company’s journey to the cloud offers some helpful lessons for other travelers, including highlighting the importance of:

  • A committed and informed core team
  • Early and frequent global participation—essential to managing the global platform complexities of project execution across time zones
  • Staggering functional roll-outs to take advantage of new functionality
  • A strong PMO and an engaged vendor, closely managing the Workday roadmap
  • Strong coordination between financial management and HCM teams

Tim Ely is a principal with Deloitte Consulting LLP’s Human Capital practice, Tim helps global companies design and implement Workday engagements. He specializes in cross-platform projects (both HCM and Finance) for global clients.

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