Management Consulting

Achieving High Performance through Human Resources: The Value of Accenture Benchmarking Solutions

Benchmarking helps HR leaders define the right HR strategy for their organization by helping them gauge where their organizations HR function leads, lags or operates at par with other organizations around the worldthereby helping to identify and address the areas that most urgently need improvement.

Achieving High Performance through Human Resources: The Value of Accenture Benchmarking Solutions
In todays highly competitive and volatile global economy, a longstanding human resources directive has only intensified: reducing the HR functions operating costs while improving the business value the function generates for the larger enterprise. Yet many HR leaders struggle to answer that call because they lack a detailed picture of their functions performance along key dimensions or, more importantly, how that performance measures up to their competitors and peers. Benchmarking is a critical tool in that regard. It helps HR leaders define the right HR strategy for their organization by helping them gauge where their organizations HR function leads, lags or operates at par with other organizations around the world therebyhelping to identify and address the areas that most urgently need improvement. Accenture Benchmarking Solutions helps an organization attain these goals, effectively and efficiently taking the pulse of its HR function and identifying areas in which improvements can be made in cost and performance. These solutions have played a key role in helping numerous organizations transform their HR functionas well as their overall workforceinto significant contributors to high performance.

Why is HR benchmarking important?

Benchmarking delivers three critical benefits for private- and public-sector organizations looking to improve the performance of their HR function. The first such benefit is a current-state assessment of the organizations HR function. This assessment includes a rigorous baseline of cost, quality and cycle time; external and internal comparisons (for example, by region or business unit) of cost and performance; and the identification of meaningful gaps. The result of this assessment is a better understanding of the HR functions cost and/or performance drivers. A second benefit of HR benchmarking is a strong foundation for HR transformation programs. An effective benchmarking initiative enables an organization to more easily identify and prioritize opportunitiesby process, region and cost driverwhich, in turn, results in more informed and relevant improvement targets and a stronger overall business case for the transformation effort. A third major benefit is a strong basis for continuous improvement. Benchmarking helps create or renew a culture of managing by metrics by enabling periodic measurement against the initial baseline. Importantly, this baseline assessment is processbased, so it remains relevant regardless of subsequent organizational changes.

Accenture Benchmarking Solutions: from insight to action

Working in close collaboration with an organizations HR leadership, Accentures skilled professionals use the comprehensive assets of Accenture Benchmarking Solutions to deliver a detailed assessment of the HR function. The Accenture team then helps the organization translate insights from the benchmarking analysis into an actionable set of initiativessupported by a business case that addresses shortcomings identified through the benchmarking processthat help drive high performance. Accentures benchmarking process involves four phases that help organizations to discover, deliver and maintain enhanced business value from their HR function (Figure 1).

Figure 1: Accenture Benchmarking Solutions helps HR organizations translate insight into action

1 Collecting data

4 Tracking improvements over time

Insight to Action

2 Performing the benchmarking comparison

3 Identifying and quantifying improvement opportunities

3

We begin the first phase by working with executives to understand their key objectives and determine the scope of the benchmarking initiative (for instance, the entire HR function, specific business units or countries, or certain processes). Next, we give the organization a predefined template to guide subsequent data-collection activities. This template provides a standardized and structured way of collecting headcount, cost and performance data across the HR life cycle. (Figure 2). The second phase entails a deep-dive analysis of the cost, quality and cycle time of the HR functions operations, which results in a median and quartile ranking of the function against data from global, cross-industry organizations in the Accenture benchmarking database. The Accenture team also conducts a

detailed qualitative assessment of the function and root-cause analysis of its performance. The output of this phase is a reporttailored to the organizations specific situationthat provides a clear picture of the functions performance relative to other organizations in our benchmarking database or, if part of the scope of the initiative, an internal comparison of performance among internal business units. With an understanding of the functions performance and the context in which to understand that performance, we next identify specific areas with potential for improvement, identify initiatives that may generate such improvement, and quantify the potential value of these initiatives to the organization. Importantly, we also provide a road map that helps the organization prioritize and execute these plans.

During the final phase of the benchmarking effort, Accenture works with an organization to establish an approach it can use to continually assess its performance against established baselines. We also can conduct periodic benchmarking to determine whether the organization is generating the desired results from its improvement initiatives and making progress toward its goals. One of the major advantages of Accenture Benchmarking Solutions is its flexibility. It can be used in a variety of settings to provide insights into a wide range of challenges. The following are just a few examples of how different organizations have used Accenture Benchmarking Solutions to gain insight into improvement opportunities in their HR function.

Figure 2: Accenture Benchmarking Solutions covers all major HR processes across the HR life cycle

Organization Management Recruiting and Deployment Performance and Development Learning Learning Administration Compensation Administration Rewards Knowledge Management

Employee Services Employee Administration Payroll Pension and Benefit Administration Mobility Services HR Customer Management HR Information Management HR Operations

Case study: Assessing the HR functions current state and opportunities for improvement
With a highly decentralized HR function operating under a loose association of HR departments, an insurance company wanted to understand its current HR functions efficiency, effectiveness and strategic value compared with other organizations delivering leading-practice HR services. The company used Accentures suite of diagnostic toolsincluding Accenture Benchmarking Solutionsto identify opportunities to reduce HR and training costs, understand where the functions more than 500 HR employees spend their time, and align HR roles to highvalue activities. Based on the analysis, the company gained insight about specific workforce activities that were ineffective and inefficientsomething prior studies had not been able to do. The diagnostic results further enabled the company to determine how best to align resources and correctly size the organization, which executives valued greatly and considered highly differentiating.

menting a long-term HR transformation program. Once the company understood its HR baseline, it focused the benchmarking analysis on key HR headcount metrics at the process level. This approach enabled HR leadership to clearly identify and prioritize specific improvement opportunities. They then reinforced this analysis with an in-depth internal benchmarking of HR performance across the companys business units, which provided visibility into targeted efficiencies that could be achieved in each area. This independent, data-driven benchmarking analysis enabled the company to gain buy-in from the business units and demonstrate targeted headcount reductions necessary for long-term sustainability.

Case study: Driving continuous improvement through targeted key performance indicators
Following the implementation of a multi-function shared services organization for HR, finance and facilities, a utilities company had an immediate need to stabilize these operations and prepare for future growth. Using Accenture Benchmarking Solutions for both HR and finance, the company conducted a comprehensive multi-function benchmarking analysis of the new shared services organization. The benchmarking findings clearly identified target areas for long-term standardization and continuous improvement initiatives. The company combined this analysis with HR shared services leading practices to identify key performance indicators it could use to track and monitor the success of internal change programs.

Case study: Reducing HR headcount to deliver HR sustainability

Challenged by a high-cost, low-valueadding HR function, an energy company mandated a reduction of HR headcount by 30 percent and a drive toward a sustainable HR operating model. Using Accenture Benchmarking Solutions, the company assessed and validated the business case of imple-

Why Accenture?
Accenture is uniquely qualified to help private- and public-sector organizations improve their HR operations through the application of Accenture Benchmarking Solutions. For starters, we focus on more than just the numbers. In other words, while benchmark comparisons highlight gaps in cost and performance, these comparisons should be considered directional rather than definitive, and descriptive rather than prescriptive. Indeed, various factors can influence an organizations performance on the key HR metrics being evaluated, including the number of countries in which the organization operates, which business units the HR function supports, the range of languages used across the organization, and the types of workforces in the organization (for instance, the percent of the workforce that is unionized, the percent that is professional versus clerical, and the percent of permanent versus temporary employees). Thus, while benchmarks are valuable in identifying cost and performance gaps, they do not by themselves explain why gaps exist, define how to improve performance or reveal organizationspecific nuances (for instance, there may be good reasons for some gaps). This is why Accenture builds a qualitative assessment into every benchmarking project. This qualitative analysis provides the appropriate context for the cost and performance data that are uncovered by a quantitative benchmarking exercise. Such context is critical to distilling the true meaning of cost and performance data and identifying initiatives an organization can pursue to help it become more efficient and effective and, consequently, increase the value HR generates for the larger enterprise. In addition to this synthesis of qualitative and quantitative analysis, Accenture has unparalleled depth and breadth of experience and highly skilled professionals working on HR benchmarking projects. Accenture has a long track record of working collaboratively with HR executives to drive successful change in their organizations that can generate greater value for the larger enterprise. We also have a dedicated talent and organization performance practice, which is focused

Figure 3: Four stages of HR mastery

Effectiveness improvement (Strategic HR workforce)

Transformed HR Strategic solutions, High Performing Workforce Increased revenue per FTE Improved employee satisfaction Reduced voluntary turnover Increased retention of key talent Improved workforce performance Evolved HR Reorganized, proactive services Increased ability of HR to focus on strategic tasks Reduced cost per hire Reduced time to proficiency Increased customer satisfaction levels Lower HR influenced costs Streamlined HR Reduced cost to serve Reduced HR operating costs per FTE Decreased manager time per HR transaction Decreased cycle time per HR transaction Traditional HR Rules & compliance focused, manual, back office function Efficiency improvements (Technology-enabled service delivery)

Finally, Accenture Benchmarking Solutions also benefits from having access to a comprehensive inventory of HR processes, assembled from our extensive experience gained from working with clients around the world. This inventory underpins our standardized data collection tools that ensure organizations capture and consolidate relevant data for every project as well as help clients undertake a holistic and complete assessment of their HR processes.

On the journey to high performance

Continued globalization and an unpredictable economy are introducing considerable complexity into how organizations attract, retain, develop and deploy talentwhich, in turn, is putting the HR function under a cost and performance microscope. Providing genuine business value in such an environment requires HR executives to truly understand the current state of their function and develop a clear vision of where they want their function to be in the future. This is where benchmarking can prove invaluable. By using Accenture Benchmarking Solutions, HR executives can get an accurate picture of the cost and performance of their HR function and how these figures compare with other organizations. In doing so, executives can see where improvement is needed and, importantly, the changes necessary to drive that improvementboth in the short and the long term. With Accentures help, HR executives can use benchmarking as a critical first step in transforming their HR function into a streamlined and highly efficient organization that makes a significant contribution to the overall enterprises drive toward high performance.

on all aspects of a companys talent management agenda and which includes a dedicated core of professionals deeply experienced in HR function operations. Indeed, our industry-specific insights, global market access and skilled practitioners help organizations across all industries and geographies develop a deeper understanding of their HR capabilities and drive transformational change. Furthermore, our highly experienced people have access to detailed tools and assets that differentiate Accenture Benchmarking Solutions from other approaches. We use a proven project methodology with a rigorous process for data collection, consolidation and comparison, as well as results analysis and interpretation. For example, our quantitative and qualitative assessment tools include a formal list of more than 250 cross-HR and processspecific metrics for cost, headcount, quality, cycle time and volume across

16 key HR and learning areas. We also use a proprietary Accenture database covering leading organizations across all industries, geographies and sizes that provides the external perspective required to compare an organization with others. To provide additional context in which to evaluate an organization, Accenture Benchmarking Solutions also includes HR mastery scales, which help a company determine the maturity of its HR function. Such determination is critical given that one of the biggest factors influencing performance is the maturity of the HR organization being assessed. HR functions typically fall into one of four categories of maturity or mastery: traditional, streamlined, evolved and transformed (Figure 3). Each of these types of functions has distinctly different characteristics that must be understood when assessing the functions current state and comparing it with external benchmarks.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company. Combining capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become highperformance businesses and governments. With approximately 177,000 people serving clients in more than 120 countries, the company generated net revenues of US$21.58 billion for the fiscal year ended Aug. 31, 2009. Its home page is www.accenture.com.

About Talent & Organization Performance

The Accenture Talent & Organization Performance practice provides solutions that enable clients to improve the performance of their people, their organization and their business. This group of skilled professionals has extensive experience across a range of talent, organization, human resources, change management, analytics, collaboration and learning capabilities. Backed by a comprehensive research program, global resources with deep knowledge and insights and unparalleled tools and assets, Accenture collaborates with thousands of clients every year, including many of the FORTUNE500 companies, to multiply their workforce talent and organizational capabilities into a strategic force that can drive high performance. For more information, visit www.accenture.com.

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Contact
For more information about how Accenture Benchmarking Solutions can help your human resources organization move from insight to action to high performance, please contact: Ian Page ian.page@accenture.com Talent & Organization Performance Charles Wise charles.p.wise@accenture.com Finance & Performance Management