Ana Calado has just completed a project management implementation for the Financial aspect of AstraZeneca's HR outsourcing programme called "AZengage," where she was responsible for the delivery of global interface solutions, payroll posting, balance sheet reconciliations, and employee master data. She was also in charge of executing the cutover plan for Western and Eastern Europe, the Middle East and Latin America – including data migration and interfaces.
As global payroll implementations go, they don't get much bigger than this: 62,000 employees across 101 countries. Ana explains that she encountered significant resistance, but her project management skills turned these challenges into a success. She shares some of the strategies and tips she applied in this interview
Interview by Barbara Hodge
[note: Ana Calado is no longer working for AstraZeneca, and this article represents her own opionion, not that of AstraZeneca.]
What was the role you played in the global finance project’s strategy for payroll at AstraZeneca?
I was responsible for the Finance side – specifically the delivery of global interface solutions, payroll posting, balance sheet reconciliations, and employee master data – as part of a global HR outsourcing program called "AZengage". This is an HR transformation program that is being rolled out globally (101 countries) in a series of seven waves over the course of two years.
AZengage incorporated a demanding project management role as part of a high profile programme to roll out a self-service HR Solution. The impact on Finance was that this affected how payroll was calculated and posted. I was the key point of contact, so any issues from the countries and global implementation teams were escalated to me. I was also accountable for executing the cutover plan for Western and Eastern Europe, the Middle East and Latin America. This included data migration and interfaces and I worked closely with the countries in defining reporting and interfacing requirements.
I worked together with each country’s HR and Finance teams, as well as stakeholders, to determine critical issues; map baseline and improvement targets; demonstrate the impact of the project to the business (expected and actual); work with Finance, IT, Project Team, BPO & process owners as required to validate project benefits to drive change on existing systems and structures. My role basically involved supporting the project with rigorous discipline and project management skills from the testing phase to transaction to business as usual.
What were the core challenges for payroll in this case?
AstraZeneca found itself in a position where it suddenly had to change strategy to stay competitive based on price, not innovation. To do so, the firm opted for Business Partner Outsourcing, characterised by low investment in physical and human capital.
The first challenge was finding the right BPO provider. AstraZeneca chose Northgate Arinso. This kind of HR transformation was completely new for both companies (AZ and NGA) and it would uplift their capabilities. Not only because it was implemented globally but also because we needed to work in a smart way, to learn from each other (though collaboration) and to be consistent in our global approach. Any project requires a dedicated approach and methodology to enable people and organizations to drive each innovation project effectively. So that was our challenge.
Richard Branson has offered a neat definition that could be applied to our HR transformation: "An innovative business is the one which lives and breathes ‘outside the box’. It is not just about good ideas; it is a combination of good ideas, motivated staff and an instinctive understanding of what your customer wants".
This takes us to the second challenge: despite being a global project we had to adapt to the countries’ or systems’ necessities. What was effective in one country (or implementation wave) could not easily be adapted or transferred to another.
Leadership is crucial at all levels of a business transformation. This was the third challenge faced: in some countries, or at certain moments in the project, I felt that we didn’t know where the responsibility lay – with HR or with Finance? I believe that each employee must act as a leader in everything that he/she is involved in. Communication skills and motivation (even self-motivation) are very important for an effective organisation. Also, leaders must be self-confident enough to influence his/her team’s vision and thinking.
How effective the leader is depends on how we play the game to solve role conflicts, cope with demands, recognize opportunities and overcome constraints. It’s also important to understand personality styles and emotional intelligence.
I think we are creatures of emotion, not logic. We make decisions based on our feelings and then look for the evidence to support that. We don't manage people; instead, we must engage them.
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Does it make sense to drive payroll transformation from HR, or should it be driven from Finance?
I would say both HR and Finance. Payroll is the undervalued function that sits between HR and Finance. I would say as long as the Payroll activities are controlled in the appropriate manner by Finance and HR, it not important who drives the transformation.
Do you think HR transformation necessarily implies outsourcing? What are the alternatives?
Offshoring your business is nearly compulsory nowadays and most organizations outsource some level of services expecting to lower costs while strengthening their competitive position in the marketplace.
I believe that at the beginning of this process, the risks are limited and tend to focus mostly on provider quality and service level agreement issues and deadlines. Later on you move on to critical and complex processes, probably to several locations across the world due to the growing maturity of the outsourcing market and the emerging capabilities and capacities of global locations.
How do you think HR outsourcing will evolve?
I am an optimist about the value of HR because HR helps talent, organization, and leadership deliver value to key stakeholders both inside and outside the company. This raises the bar for HR, but the best HR professionals who recognize and deliver the competencies will deliver more value.
A key issue in planning for action is how to motivate commitment to organisational change – to programmes like the Business Transformation happening at AstraZeneca. This requires management attention in two related areas:
- creating readiness for change; and
- overcoming resistance to change
It is a good idea to build a coalition of people who have power, expertise, credibility and leadership. The members of this "guiding coalition" need management and leadership qualities to succeed.
Once again, the communication skills help to differentiate managers from leaders. Managers push, leaders pull. Managers try to light a fire under people; leaders stoke the fire within. Managers focus on facts; leaders focus on feelings. Management is intellectual; leadership is emotional. Managers inform; leaders communicate.
Another issue is quality. Frequently, the shared services and outsourcing model replaces individuals that have years of experience with people that have been trained for mere weeks or months. Experienced, subject matter experts are replaced with capable young talent.
Initially, we perceive the cost benefits from downsizing that level of experience. However, there are a number of drawbacks that we need to deal with if we want to succeed:
1. Attrition on both sides
2. Twitter Generation with their jargon language
3. New control environment needs to be introduced
4. "Quality of services" over "productivity" of an operation
The constant turnover of staff is not helpful and it impacts reporting deadlines; plus, there is the loss of knowledge and time. The business transformation via outsourcing was beneficial for AstraZeneca, and isustained what was there before. The challenge now is to work together with our Finance and HR BPO providers to see whether they can retain staff longer or better transfer their knowledge.
Overall, the challenge nowadays is to maintain high quality services against a "low cost" and "value" agenda with shared services or BPO. If we get this balance wrong, the consequences can be enormous.
In an outsourcing partnership, how is this technical knowledge retained in-house?
During the implementation of a project, that technical knowledge exists and is fundamental at all stages. After the transition to "business-as-usual" all this is in the hands of our BPO partners. I believe that someone should be retained from HR and Finance, to maintain oversight. Ideally, this should be the people that were involved during the transformation.
Skipping this step without a robust process will always create problems in future. Change is only a waste of time and money for those who don’t learn from it. Change is like driving in a fog – you can’t see very far, but you can still make the whole trip that way.
What kind of hurdles did you encounter?
Being involved in a project of this scale showed me that we can really innovate when we are under pressure. It’s not easy to implement changes; it’s hard work. You have to deal with constant problems face resistance to change, and deal with human behaviour. All this makes the project manager role very important.
"I believe that it is often the person driving the project who makes the difference between success and failure, particularly for innovations projects." (Quote from the Innovation Best Practise Interviews, 2003)
One of the main challenges was managing projects when colleagues won't communicate or accept the change. I found this is generally due to:
- Resistance to change, plus they are going to be made redundant
- Difficulty of explaining finance terms to HR people
- Different cultures
My first step was to try to adapt to their culture and their resistance. It was a learning experience for me, as Project Manager. I tried bringing the facts to the table, and even resorted to the higher-ups because country resistance was putting the Go live and testing at risk.
What finally made the difference was engaging the resistors. I looked for opportunities to assist them with my Project Management skills. I volunteered to help with things that would tie me in to more work, but it was important to get their attention. I had to be consistent and continue to work my best and keep looking for opportunities to communicate with them in a way that they’d understand. Be patient and things will work out… that was my daily thought!
I put together daily and weekly project status updates, to make sure we were not missing anything. I included them in our stakeholder analysis reports, and analyzed their motivations and goals. This helped me understand the best way to adapt my style to meet their needs and effectively manage the project. I also showed them the benefits of clear and frequent communication.
I believe that Project Managers need to adapt to the existing culture because we are there to add value, and that’s the number one factor when dealing with people. I practice my ABC's everyday: attitude, behaviour, and choice. A common complaint is that nobody cares, so I make an effort to really show them that I do by speaking "their language" and not "my language". I have to relate to them; they don’t have to relate to me. That is the "art" side of project management.
In conclusion, we managed to sign off the testing with great accuracy and the "go live" happened as planned. Now, if there are any hick-ups with the project, people immediately contact me to get my input, even though my association with that project is finished. We built a relationship and I hope some great friendships, as well.