In this morning’s discussion, we focus on how ESS 2.0 drives significant cost savings relating to the shared services /support HR help desk environment.

Shared Services – Manual vs. ESS 1.0 vs. ESS 2.0
Now it’s time to drill down on the costs associated with traditional HR business process support. So, we take a look at the support issue from a ‘bottoms-up’ approach starting with thinking about the specific business processes or transactions that an employee or manager would initiate and complete. From a support perspective, this transaction takes on a couple of unique characteristics in addition to the previous discussion like the frequency of the transaction (e.g. hourly, daily, weekly, monthly, quarterly, annually); the complexity of the transaction (e.g. time approval vs. pay increase approval; system processing such as read/write data - workflow); and the involvement of other employees and associated salaries/overhead, in the transaction (e.g. managers, employees, HR analysts, developers, support personnel). The additional critical characteristics here are the percentage of transactions requiring internal/external support and the cost of that support (per hour basis).

Again, to help our understanding of the business value of HCM self service delivery, we’ll continue to use our example, ABC Corporation, a fictitious 30,000 person organization that we refer to throughout our mini-series. In the case of ABC Corporation, we have 26K employees and 4K managers that make up the workforce. To help us get a handle on how ESS 2.0 helps to mitigate costly shared services support we will take a look at transaction frequency by modeling high, medium and low frequency employee/manager self service transactions and the percentage of said transactions requiring support.

So let’s focus on the employee self service side of the support equation and zero in on a high frequency employee transaction, say ‘time entry’, which is a process executed by employees on a nearly daily basis. In the 2.0 world, the corporate portal is up on the employee desktop all day and that employee remains signed in to the system throughout the work day. Each and every day – the employee can quickly click on the time entry app, enter the time and cost centers for their activities without logging into completely separate systems to accomplish the task. Corporate Time Entry policies can be immediately posted to this screen making quick dissemination of new information easy, accurate and very targeted to the specific employee use case. Now compare this to the ‘1.0 World’ and you can immediately see that by having to deal with separate systems, log ins, and processes, while considering the potential issues that you incur in dealing with these complexities and therefore the need for additional support, you can rationalize the fact that with ESS 2.0 you would experience less self-service transactions (e.g. 4% of ESS transactions) requiring third party support as you would experience in an ESS 1.0 environment (e.g. 8% of ESS transactions). In this example illustrating only high frequency transactions ESS 2.0’s impact on shared services savings delivers over $850,000 in combined annualized savings for both employee & manager shared support savings dropping directly to the bottom line.

Now we can look at a sample medium frequency manager transaction, say ‘Onboard a New Hire’, a process probably executed on a monthly or quarterly basis (certainly slower in these economically challenging times) to further illustrate the support savings with ESS 2.0. So we get the same advantage as the high frequency (e.g. single environment advantage of the 2.0 world) but we are also now dealing with the process knowledge support factor as we now further into transaction complexity. Since this is more infrequent a manager probably loses context of how the transaction ‘works’. Therefore, a significant increase in support calls, online chats with shared service centers and face to face handholding. Leveraging ESS 2.0 integration technologies, the structured processes now are merged with unstructured support information (e.g. knowledgebase, policy documentation, training videos) whereby the manager can quickly ‘relearn’ the process and quickly & accurately complete said task thus rationalizing in our ABC Corporation example a 40-50% reduction in number of service request per transaction.

This same principle holds true for low frequency manager transactions, those that a manager may execute on a semi-annual or annual basis (e.g. promote an employee). The familiarity with transaction processing is very low, thus the ability of the ESS 2.0 environment to merge learning tools, supporting policies and help documentation, ease of use, single log in and links to external tools (e.g. Industry Wage Standards Calculators) accelerates transaction completion time and accuracy thus freeing the manager to do more critical work (e.g. talent management, strategic planning). And in the case of support calls, dramatically reduces the number of queries this manager must make to the support center. Again, we can estimate a conservative 40-50% reduction in shared services support transactions with the ESS 2.0 environment.

The Bottom Line?

We may now model estimated shared service savings associated with ESS/MSS transactions at ABC Corporation since we have the necessary inputs to calculate total transactions and percentages of said transactions requiring support (e.g. # of employees – 30K; time associated with various transaction types; frequency of example transactions; estimated average salary and overhead for the majority of our employees; estimated average salary and overhead for the support personnel; and percentages of transactions requiring support in the ESS 1.0 environment as compared to the ESS 2.0 environment). In terms of shared services savings for employee and manager self service transaction of all frequencies, we can conservatively estimate over $1.7M per year in savings for ABC Corporation associated with ESS 2.0 self service delivery for HCM.

This Afternoon “How ESS 2.0 Drives Significant Savings in Employee and Manager Self Service Training”