Portfolio Management Case Study: delivering $13 million savings for a FTSE 100 energy company
If fiscal pressures and the economic downturn are forcing your business to gain greater clarity on the ROI for all global HR programmes, you may find the following case study pertinent.
Hensen Associates are currently working with an award-winning Interim HR / IT Portfolio Manager who recently implemented a Portfolio Management process for all global HR programmes for a FTSE 100 energy company.
She’s called Drew and she paved the way for process simplification and FTE reduction over a three year period which delivered savings of $13 million against an initial target of $5 million.
Before Drew’s arrival, over 250 HR programmes were in flight with no portfolio management in place. The programmes were extremely diverse in nature and were being managed in silos by the HR VPs. Without successful deployment of portfolio management:
• cost reduction and cost control of HR programmes globally would not have been achieved. Although there are no firm figures of the unmet ROI of in-flight HR programmes, it was estimated at around $20 million at least over the previous seven year period.
• the company would have been unable to identify which HR programmes had the potential to yield a return on investment.
• the Learning Services / L&D Transformation initiative would have not met its cost reduction objective of $5 million.
Due to her 12 years of delivering technology-enabled HR transformations as a Programme Manager, Drew understands the main drivers of change resistance in HR and the complex political sub-text which arises during an engagement likes this – predominantly breaking down functional HR silos.
Combining her unique expertise with her highly perceptive and a diplomatic negotiating skills, Drew set about building critical trust with the multiple VPs of HR who had ownership of these programmes. Crucial to her execution was the consolidation of 250+ global HR programmes into just 21 that were aligned with corporate objectives. In most instances, she had to introduce the concepts of ROI and benefits realisation – concepts which were difficult for the HR community to grasp and implement previously, and was a big reason why programmes didn’t deliver.
Another reason they didn’t deliver was because they were often far removed from the local context. For example, when they started to centralise the Learning operations, part of the benefits realisation was to ensure that local HR Managers and resources understood that they were accountable to ‘global’ reporting lines in L&D, rather than a local Learning function.
Working in further collaboration with the VPs, she achieved a shortlist of ten programmes in seven functional areas of HR (Resourcing & Talent, Organisational Effectiveness, Shared Services, L&D, etc), then down to three key programmes for each area. Using this as a baseline, she facilitated a workshop session with the VPs and Executive Board to crystallise which programmes met the corporate objectives and where cross-programme benefits could be achieved.
Drew engaged all seven VPs of HR, and Senior VPs of HR to define and prioritise their existing HR programmes. In these engagements she had to use her diplomatic and incisive approach to effectively challenge the thinking of the VPs, enabling them to objectively evaluate each initiative on its own merit. In most instances, she had to introduce the concepts of ROI and benefits realisation – concepts which had been difficult for the HR community to grasp previously, and was a big reason why programmes didn’t deliver.
Once Drew had achieved some clarity of the individual programmes across the specific HR functional areas that the VPs were responsible for, she created an HR Portfolio overview which detailed project status, cost, resourcing and the expected ROI (on both project and overall programme portfolio-level.
Drew’s facilitation identified Transforming the Learning Services delivery would meet cost reduction objectives, ROI and establish a new capability for HR services globally. She was then chosen to lead this programme as Programme Manager – where she went on to deliver a 160% increase on the target cost saving over a three year period at $13 million. Something which she achieved in 24 months.
Drew was retained for a total of three years and went on to deliver a programme which hadn’t delivered any business benefits in over seven years. She was also responsible for the ongoing Programme Assurance reporting for the entire HR programme portfolio.
Drew will soon be finishing the assignment and be free to interview for her next role. To find out more about her, or to discuss any other business challenges you require assistance with, please contact Hensen Associates on 01189 901137.
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