The recent troubles of the Co-Operative Group have been well documented. However, part of the turnaround plan is to invest in its people and systems.
The Co-Operative Group has had a challenging few years. The mutual brand, which is co-owned by its members, almost collapsed back in 2013 after a £1.3 billion “black hole” was discovered in the banking arm of the business.
Since then, however, the Group has sold off most of the banking operations and has begun implementing a three year turnaround plan that focuses on “placing customers and communities firmly at the heart of the Co-op again”.
Central to this plan is also the desire to make sure IT and digital better support the needs of the business – where the Group has said that it wants to “fix the plumbing”. Separately, it has also said that it wants to focus on re-engaging colleagues within the Group, by making all employees work as one team.
Knowing this, it’s unsurprising that one of the first areas the Co-Op is overhauling is HR. I got the chance to sit down with Simon Locke, head of IT at the Co-Operative Group, at Oracle OpenWorld in San Francisco this week. At the event he explained how at a central level he is working with the Co-Op’s different business functions (of which there are many, including retail, funeral care and legal services) to shift HCM to the cloud, using Oracle. Locke said:
This is not an IT led project, it’s a business led project, a HR and business led project to transform the function. They want to upscale, change their cost-base, transform their ability to work with the business areas of the co-op which is a vast, diverse organization with lots of different business areas.
Really, a HR led project supported by and enabled by IT. Underpinned by modern, purposefully integrated systems rather than our fragmented IT landscape that we have at the moment. Which is really difficult to change because of the heavy customizations and very costly to do so.
Going modular
Prior to the cloud-based HCM project, the Co-Operative Group was operating from a very highly customised Oracle EBS application. This was ineffective, largely because it didn’t have much performance management capability built into it, which wasn’t going to work with the Group’s new strategy around engaging employees.
The Co-Op assessed a number of vendors, including SAP and Workday, but landed on Oracle for two reasons. Firstly, the Co-Op already has a large Oracle skill set internally, making the transition an easier one. Secondly, Locke said that Oracle offered the easiest approach to modular implementation.
Although Locke and his team had originally planned to go with a big bang approach, it was decided that going modular would take some of the risk out of the project. Locke and his team have already worked with all the different business areas to roll-out recruitment and performance management, which went live earlier this year. And is now preparing for the core HR payroll and compensation modules to go live between January and April next year.
Locke said:
[We decided to take a] phased approach to the modules, let’s learn with some of the simpler modules of the Cloud because this is one of our first major Cloud projects as well, so we wanted to make sure we got it right with some of the more simple functionality. And then, obviously, moving to a payroll change next year.
We started off with the idea we’d go big bang approach with core HR and payroll. However, as we got into the project we started to learn some of the lessons and felt that to de-risk the project we wanted to go live with the more simple payroll first.
Once this is complete, the Co-Op intends to retire the Oracle EBS system in June or July next year. Locke said:
We need to do that to realize the benefits of the program. It’s pretty important. We cannot support 2 systems and the coexistence of those systems indefinitely. We need to cut off EBS.
A federated model
Locke said that one of the biggest challenges of the project was that the Co-Operative Group effectively operates a federated model, whereby there is a central team that works and collaborates with all of the distinct and independent businesses.
He said that the key, although it has been a challenge, is to try and make sure that the project isn’t one that is perceived to be being pushed out by central functions, but rather one that is in demand from the different business units. He said:
I sit in the group IT function and support all the what we call the enabling functions. Each of the businesses has their own IT and HR team, so we have to work very closely now. That’s a new model that came in 2 years ago so we’re now working very closely with those business teams to ensure that they’re playing a role in the implementation.
It’s very difficult. It’s been one of our major challenges. If you imagine in a food store – until recently they didn’t have WiFi. The infrastructure and the bandwidth in the stores is all different. In terms of the actual technologies in the store, there might be a PC there but it might not have access to everybody, so we’ve got to look at the mobile solutions that are out there to understand exactly how we implement it.
We’re still working out there with the business areas. One of the lessons learned that we’ve come across so far is around business change and ensuring we work much more closely with the business areas so they can pull a product as opposed to us trying to push it out as a central IT/HR implementation. All of the business benefits if we get this right.
The data problem
Two other areas that have proven to be significant challenges for Locke and his team, are around data cleansing and governance, as well as education and engagement from people across the business.
Often when listening to buyers speak about shifting their HR function to the cloud, they indicate that they underestimated that challenge of organising, sorting and cleaning the internal data for migration to the new platform. This was no different at the Co-Operative Group, where Locke said that it is a “big challenge”. He said:
When you think about it, you have got 10 years worth of data which hasn’t really been governed that well and you are having to then transition that into a cloud system which requires data in very specific formats. We underestimated that actually, despite the fact that Oracle talked to us about that quite significantly and warned us that this was going to be an issue.
The other area that buyers often underestimate with a HCM cloud projects – which more often than not pushes more self-service activity to employees – is the level of engagement, education and training that is required to make sure that staff actually use the systems to the best of their ability.
Again, Locke and his team identified this as a key challenge and is something now that the Co-Operative Group is working hard to address. He said:
Business engagement early was something that we were late in getting to, in terms of getting the business really on board. I talked before about getting that pull from a business. I think we fell foul of not getting out to the business and getting real business users hands-on with the product early enough. For core HR, payroll, now we are really keen that as soon as something is built and ready we get back from the users, before we even get into a test phase to actually try and get them to get some feedback from them.
I think the other big lesson was around assuming that people would know how to work the systems very easily. Actually, it didn’t land quite as well as we thought it would and there’s various reasons for that. I think if we’d have got users hands on it earlier we’d have been able to correct some of the things that weren’t working perfectly in initial implementation. I think that there’s a level of intuitiveness that we didn’t anticipate having to do as much training material. We thought people would be able to just get on and use it but we underestimated the amount of training we’d have to do.
I think some of these new tools are always going to land with some users negatively because they’re having to comply to a process which they didn’t have to do before. Communication is going to be really important for the next phase to ensure that we’re explaining why we’re implementing something.
Working with digital
Finally, and separate from the HR project, I was keen to hear from Locke about the Co-Operative
Group’s recent digital efforts. The Co-Op has recently built up a new digital capability, since ex-Government Digital Service director Mike Bracken joined the organisation following his shock departure from Whitehall.
Bracken took many of his senior team from GDS to the Co-Operative Group with him.
Locke said that whilst the digital team are “not part of IT”, there is increasingly close interaction. He views Bracken and his team’s involvement as a good thing, but did admit that this has brought challenges for the traditional functions. He said:
I’m trying to get to an understanding of how we work together because there is tension, but sort of healthy tension, because they’re developing things from a user-centric perspective which is something IT hasn’t traditionally done.
I don’t think using the digital team for every project would necessarily be a thing that I envisage. Fundamentally, I’m still accountable for my business areas, the enabling functions as we call them. It’s evolving, it’s fairly new for the co-op and it’s evolving.
But Locke recognises that the digital team could be useful, especially when looking at service design and designing for the user. This will play into the HR project, where the recruitment system needs some tuning for the Co-Op’s needs. He said:
A good example is in the recruitment space. We call them customer team members, it’s the people that work in the stores. The recruitment system out of the box, we don’t believe it will work out of the box to be able to cater for that volume based recruitment. We’re kicking off a separate project that is really going to be a service like design, working with the digital team, to actually advise us on that. Actually, we’re working with them closely now to help set up an agile approach to delivering that particular function for the business.
Source: http://diginomica.com/2016/09/23/oracle-openworld-2016-making-hr-a-digital-experience-at-the-co-operative-group/
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