In-House HR SSC at Kellogg's: One Year On

SSON: What business drivers led Kellogg's to deploy Shared Services for HR – how had HR been supporting the workforce, and what challenges were you encountering prior to establishing the SSC?

Anne Paterra: Kellogg's Company has grown significantly through acquisition in the last ten years. Prior to 2000, we were mostly a cereal company. But since 2000, we’ve added Keebler – which makes snack foods, such as cookies and crackers – and Morningstar Farms, which markets delicious frozen veggie foods. Keebler had made many brand acquisitions prior to our purchase, such as Famous Amos, Sunshine, Murray’s, and Austin Crackers. So when all these different companies came together, it created a very complex benefit and policy platform. HR was very decentralized and in looking at the situation, Kellogg's HR leadership realized we needed to automate and leverage talent across our businesses. We weren’t positioned to be nimble and respond to business growth quickly. To be efficient, we wanted to standardize processes and policies so we could support growth. We also experienced the following issues:

• Unreliable human capital data, and problems matching data across borders
• Lack of confidence in the data upon which we were making important business decisions
• Technology that was highly-customized, out of date or non-existent

We needed to review the way we managed HR work, become more efficient, drive accuracy and simplicity in our data and processes, automate what we could, deliver new talent management tools and provide a consistent and reliable customer experience.

SSON: How did you go about building the business case? Did you take a phased approach, and what areas were you striving to make the most impact in by deploying HR shared services?

AP: Our existing HRIS system was highly-customized, and we had neither the time nor resources to upgrade it regularly. It actually appeared to cost as much to upgrade and program all the customizations as it would to buy a whole new instance; amazing but true! We had a tremendous need for nimble systemsthat could move as fast as the business – so based on the fact that the business wanted reliable data and we weren’t confident we could supply it, we were able to make the business case.

Our first phase was the Americas, covering our business in North, Central and South America. This phase, in hindsight, should have been much smaller – maybe a single country, or some components of the total project we delivered. Then we could have learned, adapted and done another phase. We did a "big bang," covering approximately 17,000 employees in 13 countries and four languages (English, French Canadian, Spanish and Portuguese). On October 26, 2009, we implemented a personalized HR Portal with benefits and pay information, time recording, performance management, succession management, career development, compensation planning, employee self-service, and manager self-service. At the same time, we started up a centralized, multi-lingual HR service center. In the 13 months prior to going live, we collected information and content, redesigned processes, sought buy-in from HR and the business, built and tested all of the integrated technology and feeds, and then selected and trained the Shared Services staff. It was fast paced and highly complex. And the first year was challenging.

SSON: During the planning phase, did you plan for change management? What challenges did that bring you?

AP: Change management was part of the original plan, but challenges can happen on a project that you don't expect. There were challenges that arose, which meant the project management and leadership teams had to come up with resources to resolve the issues. Unfortunately, if you have to cut something, training and change management often seem to be the answer. The customer training and change management budget, which was already lean, became smaller as we progressed through the project.

As an Ops Manager, I should be focused on the efficient running of this small business within the business. However, for the last year, I estimate that 60% of my job has been change management, with a large portion of it devoted to overcoming misperceptions. For example, if one user experiences frustration or difficulty, that individual might assume everyone is frustrated when in fact, we see 2,500 transactions a month, 13,000 visits to the website, and 4,000 customer calls a week, with high customer satisfaction ratings. So while we are making efforts on change management, there was a lack of formal change management plan at go-live. That void has definitely made the transition slower and more difficult for our customers and HR colleagues.

SSON: What technologies were acquired to run the HR Shared Service Center and what features were most important to you?

AP: Having an HRIS system that is standardized and centrally governed was our number one priority. We use SAP for employee and organizational data, and analytics. We use an Automatic Call Distribution telephone system and we use the IP application for our Regional Specialists who work outside the US, such as in Canada, Mexico and Brazil. We have a case management system, which is closely integrated with an HR knowledgebase, or content management system.

The knowledgebase is used both by the call center to answer callers’ questions, but it’s also leveraged to feed highly personalized information through our portal.

Our portal is built on a Web platform, and the knowledge base hosts the content that pulls through the portal frame. Our HRIS system is in the background behind the portal frame and drives employee self-service and manager self-service. We use a single sign on protocol so when users sign on to their computer and go to their Web browser, the Kellogg's intranet comes up and users can click on a tab that is our HR portal. The Portal uses their identity and roles in HRIS to identify what content is directed to each user. Finally, we use several hosted talent modules, including Compensation Planning, Succession Planning, Career Development, and Performance Management.

SSON: So was Tier 0 part of the initial focus?

AP: Absolutely. A major project driver was to leverage Tier 0, or self-service. The only self-service we had previously was a US benefits open enrollment, which we’d run annually for the last several years.

We were really trying to gain adoption of Tier 0 and Tier 1, both of which were new concepts across the Americas. Users were used to having their HR person on-site answering their questions and we’ve had challenges getting people comfortable with picking up the phone and discussing their HR question with someone they had never met. It was much more comfortable to just walk down the hall.

SSON: Which is always a challenge. And how did you determine what information and technologies to introduce or to integrate?

AP: We used a consultant on the project who helped us drive the transformation process. One of the methodologies that was employed was to host global workshops. We utilized a formalized review and discussion format to drive alignment in various areas and design global processes. We held workshops on compensation planning, staffing, employee and organizational data, among others. During these workshops we brought in subject matter experts from across the globe, asked them a series of questions and challenged them on their assumptions. We strived for simplicity, standardization, and automation.

When we gained agreement from the global HR leadership to design and drive global processes, we empowered "global process owners." The GPOs own the global process, such as the staffing process, and maintain a level of governance over changes to and exceptions from the global process. Global governance was a key driver to enable the HRSS model to avoid back-sliding into working by exceptions and more decentralization.

SSON: So when you went live, what results or impact did you immediately see and how does that compare to the present day, a year on?

AP: It was forecasted that we would see a 30% improvement in data accuracy and I believe we have probably realized that goal, or come very close. However, data integrity grows incredibly slowly, and is iterative. Previously, we had kept the business leaders out of the actual data detail, yet the business should own the detail. HR had managed the data to the best of its ability, but as data went through many hand-offs we lost accuracy. When we pushed back the curtains and let them see the data, there was a fair bit of credibility lost for HR. The business saw the organizational structure as a mess. We went through three different rounds of working with HR business partners to get the organizational structure the way the business thought it should look. That was pretty painful. I think we’ve all gained confidence in the data accuracy over the past year, though.

We went from full-service on organizational data changes to nearly 100% self-service, which was short-sighted. It would be as though you went into your local grocery store one day and they had taken out all of the cashiers and baggers, and left you only with the scan-your-own-groceries aisles, and no one there to help you. We have self-service available and we encourage employees and managers to use self-service when they can which offers live coaching for infrequent users; however, we will soon be offering full services for those who are travelling or are having technical problems. Of course, over time, we hope we will increase adoption of self-service as managers get more comfortable with the technology.

Another key learning is that there is always room for improvement, which is why gaining feedback from users is crucial. Even if you get it mostly right, and we thought that we got it 80-85% right when we went live, we still have work to be done.

SSON: Of course and the unachieved percentage is the one everyone sees isn’t it?

AP: Yes, and we are working collaboratively within the business to make modifications. For example, we did a mid-year correction in June which involved simplifying manager self-service and focusing on making our most complex transactions as simple and clear as we could. This was largely driven by feedback from our customers. Modifications included better instructions, less jargon and acronyms, and more drop-down menus instead of free text entry.

We’re also seeing improvement from cases in which we had to coach people on self-service. We had a 25% reduction in volume of calls to coach people in the three months after we launched compared to the three months prior to the launch – a 25% drop. And the call length was also shorter on the calls we took. In other words, people got it. The tone of the coaching changed, too. Prior to the MSS 2.0, the calls were frequently 'oh my gosh, I’m stuck, I don’t understand this, help me through it;’ and now we’re hearing, 'I just did it and I think I got it right, can you check?'

SSON: What metrics are you currently using to measure your HR Shared Services success and do you expect them to change over time?

AP: We have an internal scorecard and a customer-facing report card. We’re continually modifying our internal scorecard as we try to focus on the right metrics to capture. You don’t want to measure things if they drive the wrong behavior, so you have to be really, really careful about that. Our customer service generalists are going to be the nicest, most helpful people you’ve ever talked to and it is not what I would consider a typical call center model where volume and shortened call lengths are the drivers. Rather, we want our generalists to stay on as long as necessary, to make sure that the callers’ needs are taken care of. We want people to call so that we can provide assistance and to encourage this, we have a very short wait time. On average, callers typically do not have to wait more than 30 seconds and we’ve been able to maintain that, which results in a less than 5% caller abandonment rate. We have a goal of achieving a 50% first call resolution and we’re delivering between 60 and 70%. We have a first day resolution goal of 60%, and are delivering at 75% or higher. These metrics are important since they drive adoption and re-use of the center.

SSON: How are you measuring employee satisfaction?

AP: We have a quarterly Customer Satisfaction survey, and we survey employee and retiree customers in Canada, the US, and in Latin America. We send a paper version to customers who don’t have an email address on record with us, and an electronic version to those who do. We’ve gotten good feedback, both favorable and critical: both types help us grow. On both the first quarter and second quarter surveys, we earned an overall rating of 3.1 out of a 4-point scale. On the second survey, we saw a trend moving our satisfied customers to very satisfied, which is very gratifying. We are studying the dissatisfied customers’ responses to identify issues that are inefficient or not clearly documented, to improve the customer experience for the future. Also, we are responding to surveyed customers who wanted to be contacted, to see if we can gain additional insight.

SSON: What advice would you give to other organizations considering deploying HRSS?

AP: First and foremost, change is difficult. Having dedicated change management resources from implementation for 12 to 18 months would have been a big benefit to us and to our customers. Secondly, it takes time to stabilize. Be patient, listen to all the feedback, analyze it, and be flexible. Look for compromises that work within your technology and your model to get you to your strategic goal. Find winning solutions for the customers and the HRSS staff. Ultimately, it is worth the work to see the progress and improvements we are making, and the value we are delivering to the company and our customers.

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