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Designing the Human Capital Architecture

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Jun 21
2010

Designing the Human Capital Architecture

Posted by: Gerhard Badenhorst in HR Transformation: The Human Capital Architecture

Gerhard Badenhorst

The work of the HR Architect starts with the analysis and mapping of all the components present in the current HR organisation, and the dynamics inherent to their interrelationships. This work is essential to establish a clear and detailed picture of the HR organisation as it exists.

The impact by entities such as customers, partners, suppliers, people, stakeholders, advisors, geographical locations, processes, delivery model, data & information, applications and technologies on the HR organisation will become clear and from a systemic perspective, the impact of the HR organisation's relationships with these entities will be evident.

All these entities need consistent and reliable services from HR in context of their specifc relationship with the HR organisation or part thereof. These information-based services should add value to these entities and their relationships with the HR function.

Customers of HR demand professional HR transactional and/or Talent Management services as their needs for such services arise. They include HR Teams themselves - according to the specific HR service delivery model and channels structure - as those teams are dependent on some of their colleagues for information-based services in order for them to offer services to their customers - this is typically the place that HR Business Partners find themselves in.

Partners of HR are those entities that partner with HR and support the HR Teams to delivery services. These are support functions such as IT, Finance, Facility Management, etc. Partners could also include the Labour Unions, the Board of Directors, and Line Managers (such as, assist HR to execute Employee Wellness programmes or take responsibility for some of the recruitment processes, and so on).

Suppliers to HR are usually external entities that provide products and services to the HR function within context of a financial transaction. These could include products and services such as Salary Surveys, Publications and Subscriptions, Skills Training Providers, Recruitment Services, etc. Depending on the specific HR service delivery strategy and structure followed, some of these services are outsourced to certain service providers and could also give specific services on behalf of the HR function to its customer groups.

People in HR refer to the all those people who are on the HR function's own payroll. Depending on the size of the HR function as well as the specific HR service delivery structure, these could include all teams working as Business Partners at the operations, Center of Excellence or Expertise staff, HR Managers, HR Shared Services staff, and the HR Executive.

Stakeholders in HR include all entities that have a vested interest in the HR function. Stakeholders could include the Board of Directors and its sub-committees, Communities where the company is operating in, Labour Unions, National Government departments such as Dep. of Labour, Revenue Services, Dep. of Health and Safety, etc. Stakeholder relationships are extremely valuable and if managed carefully, are good resources to the HR function.

Advisors to HR are usually professionals such as Lawyers and/or Business Consultants in almost every aspect of Human Resources Management. Advisors typically give services to HR on an ad-hoc or per-project basis. Companies soften contract advisors for their knowledge, skills and ability and to recommend on best practices in certain specific areas.

Locations of HR are provided where the customer groups of HR are geographically located. For HR to deliver the same quality of services to all its customers, it needs to strategize and structure its service delivery model and channels to closely match the geographical footprint of its customers. This is more than often left to the operations and/or the IT function, but HR as the custodian of HR service delivery needs to take care of this dimension all the time.

HR Business Processes are the core vehicle through which it should deliver its services. It is the lifeblood and essence of HR service delivery! These processes typically range from all the HR transactional processes - organisation management (including job design and profiling), time management, payroll administration, personnel administration (including leave administration and benefits administration) to the Talent Management processes such as Recruitment (including e-Recruitment), career & succession planning, skills training and development, performance management, employee health and safety, employee relations management, employee wellness and employee assistance programmes and exit management. Well designed HR business processes are the new way of work for HR Teams and need to be actively involved in the design process. HR Business Processes deliver HR customers results across the People Value Chain.

The HR Service Delivery Model represents the specific HR service delivery strategy and structure that the HR function will use to deliver quality HR service through well-designed HR business processes to all customer groups and stakeholders. The well-known 3-tier HR Service Delivery Model consist of a Shared Services Center for all the HR Transactional services, the Centers of Excellence or Expertise that deliver "best practices" and policy support services, and the Business Partners that are usually seconded to the operations for on-site HR service delivery, specifically non-transactional services and strategic Talent Management and OD-type services.

HR Data and information refer to all data and information that contain content that is essential for HR services. It could be structured data sets; specific HR metrics designed to measure things such as compliance to policies, number of bursaries converted into full-time equivalents, levels of health and safety incidents, etc. Reporting, especially consolidated and integrated HR data and information is the key ingredient of HR services.

HR Applications are HR information systems that supports and enables all possible Hr business processes. Due to the integrated nature of HR, it is essential that all HR activities across the People Value Chain - from HR Transactions through to Talent Management to Employee Health and Safety - are integrated on data level as the true nature of HR services are integrated information. With sophisticated pre-programmed HR information systems on the market, there is really no business imperative to design your own information system - the more standard and stable the functionality, the more the system will be user friendly.

Hint:

Compile a list of all known parties/ entitities/ people in each of the architecture categories that are mentioned above. Start by describing the current relationship that this component has with your HR organisation and what the impact of this relationship is in context of the HR strategy.

Next, describe the nature (i.e. headcount report) and frequency (i.e.weekly) of all the data and information required and/or provided to that specific entity and the business/ HR decisions that the said data and information support.

By doing this anlysis, we get a more clear picture of the expanded HR customer groups and their service needs - this is what HR in the information age is all about!

Gerhard

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