A PROJECT REPORT ON

SAP IN WORKFORCE PLANNING

THAKUR INSTITUTE OF MANAGEMENT
STUDIES AND RESEARCH
SUBMITTED TO PROF: SRINIVASAN IYER
OPERATION PLANNING CONTROL
PGDM SEMESTER-3
BATCH 2014-2016
SUBMITTED BY:

NAME
PINTU SINGH

ROLL NO
96

INTRODUCTION

Workforce planning is all about ensuring that an organization always has the right resources with
the right skills in the right job at the right moment in the right quantity in the right place at the
right price. Thats a lot of right to be responsible forright?! Workforce planning takes many
shapes, from the long-term strategic to short-term operational, and the near term executional
planning and shift/roster scheduling.

With that mouthful, lets jump in.

Strategic workforce planning refers to a long-term horizon, and aims to construct a broad
workforce strategy and specify categories of competencies. Strategic workforce planning
addresses needs such as "to increase APAC sales, we need new strategies to hire up to 500 staff
with local language fluency over the next 3 years", in the words of one customer. Operational
planning on the other hand is more concerned with short-term headcount and budget. As another
customer put it "Finance sends us a spreadsheet and asks for next periods staff numbers".

In addressing the near-term, Roster and shift scheduling is about making sure that various
departments in the organization have the right people in the right numbers on the "floor" at any
given time. Similarly project resource staffing assures that project-based organizations have the
right people with the right skills available and assigned to do an appropriate piece of work.

This blog will address key facets that can be used to demarcate the different planning
processes, timeline, population segmentation, and skills, competencies and capabilities, and will
conclude with an overview of which SAP solutions best suit each planning process.

Timeline

Lets begin by getting more specific about the time frames we just discussed for each of the three
planning horizons. The time frame for strategic workforce planning is typically 2 to 5 years and
beyond. The precise length varies depending on the industry and organization. For example, in
mining industry planning can go as long as 30 years because of their heavy emphasis on
infrastructure and mobility. On the other hand, for high tech Industry, 2-3 years is quite common
because of the ever-changing nature of technology. For manufacturing it is typically 3-5 year
planning horizon.

Earlier we described the operational planningtimeline as short-term, which usually translates

into a time frame of 6-24 months. Because it can readily coincides the budgeting process, annual
planning is the most common time frame.

Near-term planning covers the immediate need for next days, weeks and months, and is
understandably very tactical in nature. This could include shift and roster scheduling in a retail
store, restaurant, healthcare, field service, warehouse, security guards, or on a cruise ship. Project
resource scheduling tends to be for the upcoming weeks and months, be it for a construction
project, a professional service engagement, a development or an IT project.

Figure 1 - Timeline denoting the time scope of workforce planning solutions

Population segmentation

Strategic workforce planning enables a macro view of talent, and is founded on anticipating the
future workforce mix based on top-down strategic objectives of an organization. Strategic
workforce planning is more abstract in that it focuses on critical workforce segments, jobs and
roles driving and supporting the organization strategy in terms of full time equivalent (FTE), and
not individual persons.

Operational planning offers a micro-view of talent, aligns and balances top-down organization
directives for headcount and budget with bottom-up needs of line management, and is focused on
the individual. Rather than focusing on selected groups of workers and FTEs, it encompasses the
entire workforce and is based on actual headcount needs to fill vacancies over the planning
horizon.

Shift and roster scheduling take into account employee preferences, working directives, and
regulations, seeking the optimal roster that balances organizational goals and individual
preferences based on demand for a certain time period. Project scheduling is focused on
utilizable resources - those that are eligible for assignment to projects. For example, in a
professional services organization, a consultant is considered utilizable whereas the finance
department is excluded.

Skills, competencies and

capabilities

Resource gap analysis constitutes a major part of workforce planning. As one goes from strategic
to tactical, the gap analysis becomes more granular, down to detailed skills and competencies.
Simultaneously, the precision becomes greater.

Strategic workforce planning provides directional guidance, taking into account environmental
scans and scenario planning - for example, developers are considered critical and approximately
500 are needed over the next 3 years, 100 in the first year, 150 in the second, and 250 in the third
year. Plans can and should be re-evaluated and adjusted according to changes in the organization
and in the market.

Operational planning is more precise and has financial budgets associated with it.
During operational planning the organization determines and refines exactly what type of
resources and how many are required, how much budget is available to acquire these resources,
which departments will they will be allocated to, and when during the year these resources are
expected to be fully on board. Both strategic and operational plans are primary sources for HR
managers in crafting recruitment plans.

For project based staffing, the resource requirements are more clearly defined in terms of the
nature and level of expertise as well as the seniority and logistics of the resource that will be
assigned. The same is true for scheduling shifts, where exact numbers of specific types of
resources are defined. For example, in a grocery store, scheduling for the produce department is
separate from the meat or bakery departments, and each has its own pool of resources to draw
from based on customer needs for the time of day and day of the week.

SAP solutions for workforce

planning
SAP offers end-to-end workforce planning solutions that cover strategic, operational, and day-today planning activities available on-premise or in the cloud.

Strategic workforce planning

Success Factors Workforce Planning , offered on the cloud, is SAP's solution to address
the strategic workforce planning needs of our customers. Success Factors Workforce
Planning (formerly Info hrm) is a mature and leading solution, and is complemented well with
Success Factors Workforce Analytics. It enables forecasting of skills gaps, what-if scenario
simulations and financial impact modeling. This solution delivers an extensive library of HR
strategies that you can draw on to mitigate execution risk associated with your workforce to
deliver on your business objectives and corporate initiatives.

Figure 2 SuccessFactors Workforce Planning - What-if scenarios

Figure 3 - SuccessFactors Workforce Planning - Risk assessment and HR strategies

Operational planning

SAP Operational Headcount Planning is a planned solution for delivery on-premise that takes
advantage of the scalable platform offered through SAP BusinessObjects Business Planning and
Consolidation (BPC) to provide alignment across financial budgets, headcount and salary plans,
and organization objectives. This solution enables the standardization of salary budget and
headcount planning with common definitions of terms across the organization. HR and
controlling can take defined budgets and headcount at a corporate level and cascade them along
the cost center hierarchy to ensure alignment. BPC allows cost center managers to model and
simulate the impact of changes in their organization such as promotion rate, turnover rate, etc.
Using a single tool makes it possible for controlling to consolidate and manage planning and
budgeting across the organization, and eliminates the need for disparate spreadsheets. Overall,
this process helps to reduce time for budget and headcount planning and improves the accuracy
of the budget.

Figure 4 - SAP Operational Headcount Planning - Establish guidelines and cascade down

Figure 5 - SAP Operational Headcount Planning - Aggregate report

For an even more granular perspective, SAP Personnel Cost Planning and Simulation (PCP)
available on-premise allows HR to execute detailed operational personnel cost planning along
the organization structure. HR can plan the development of various components of workforcerelated costs, such as wages and salaries, employee benefit costs, employer contributions to
social insurance, and education and training. With PCP HR can execute cost planning for
individual organizational units, parts of an organizational structure, or for the entire
organizational structure. HR can also decentralize parts of planning so that line managers can
view, change, and enhance planning for their area of responsibility.

Workforce scheduling

SAP Multiresource Scheduling (MRS) is an on-premise solution for resource management in the
service, plant maintenance and project-based businesses. It offers flexible resource planning
scenarios from manual planning up to automated and optimized planning. The work demands to
be scheduled in the Multiresource Scheduling application can come from various sources,
including:

SAP CRM Service and SAP ERP Customer Service (CS) for Field Service
SAP ERP Plant Maintenance (EAM) and SAP ERP Project Systems (PS) for Plant Maintenance
SAP ERP Project Systems (PS) or Collaboration Projects (cProjects) for Project Staffing
SAP ERP Plant Maintenance / Customer Service (PM/CS) for Workshop Planning/In-house
Repair

Figure 6 - SAP Multiresource Scheduling Utilization

Figure 7 - SAP Multiresource Scheduling Scheduling

Efficient Field Service Management Solutions from SAP help customers enable and manage
comprehensive field service processes, including resource scheduling to automate your processes
and leverage optimized scheduling functions to make the best use of your resources and meet
service-level agreements. The solutions offer the field engineers mobile access to information to
increase productivity and data quality.

SAP Workforce Management for Retail (see also, http://www54.sap.com/industries/retail.html) is

an on-premise solution that covers employee planning and scheduling for today's retail
environment. SAP Workforce Management enables the complex process of creating optimum
employee schedules utilizing business variables entered during implementation and actual
business and volume data captured throughout the day.

Figure 8 - SAP Workforce Management for Retail - Store Manager Dashboard

Figure 9 - SAP Workforce Management for Retail Schedules

Whether the objective is tactical or strategic, proper workforce planning can reduce risks and
costs, while increasing potential to generate revenue and profitability. Benefits to the business
include advance insight into workforce needs and skills gaps, which gives companies more lead
time to source talent or build internal talent, employ a diverse workforce in line with the business
strategy, and meet demands of changing markets. Furthermore, workforce planning helps to
increase retention levels, reduce turnover and hiring and overtime costs, and avoid situations
where revenue opportunities cannot be exploited or customer service cannot provided because
the right talent is not available. Regardless of time frame, there is no bad time to do workforce
planning.

SAP's offering for Workforce Planning and Analytics

There is no shortage of data, or ways to analyze it all in todays HR. Yet we constantly hear
customers and HR leaders talking about drowning in data and thirsting for insight. What we are
seeing beyond that thirst see is a deficiency in the way HR data trickles down, or bubbles up, in
the organization. More than ever, different groups within companies have different information
needs. And quite consistently, they are not getting what they need.
I think SAP has taken decisive steps in solving this problem.
To understand how there can be so much data yet such a deficiency it getting to the right users,
lets first see who these users are.

Who are these people?

Figure 1: HCM stakeholders across the organization.

Managers are the most conspicuous users of HR data. Executives and senior-level
managers need aggregated information to check the pulse of their organization at any time, and
potentially react quickly by assigning tasks to others. Middle managers need micro-analytics
(meaning targeted widgets focused on specific questions) to make operational decisions inside
the transactions they are using every day, which typically involves more detail than senior-level
managers require.
Directly supporting managers is finance and controlling. Typically, these users do not need HR
analytics in their day to day work. Yet they need visibility on HR data as far as headcount
planning is concerned. Some of the questions for which they need insight come from HR data.
How many people will the company hire next year? How much will it cost in salary and
benefits? How much will it cost in real estate or IT resources? These are not trivial questions, yet
often finance and controlling cannot address these questions without significant specialized
assistance from HR.
Such assistance comes from HR analysts, a new function we are seeing more frequently, and
who are often called upon to address needs outside of the traditional HR function. HR analysts
are professionals possessing a strong quantitative background, and are assigned to HR to help

frame decisions more quantitatively. Their previous experiences are often gained from their
tenure in in marketing or finance, and they may have considerable experience in operations or
CRM. HR professionals, whether administrators or HR business partners, are the immediate
consumer of HR analysts, obtaining detailed reports and needing some level of capability to drill
down and answer questions.
Plenty of pain to go around
All these users make unique contributions to HR strategy and execution. As mentioned earlier,
each user has different needs according to consumption level and position in the value chain.
However, we are seeing common to them all a consistent combination of five pain points.

Figure 2: Summary of challenges organizations face to leverage analytics.

Data quality
Inadequate data quality does not just refer to missing data points or coarse measures. There is
also a lack of real time information, caused by a lag between the time a report is requested and
fulfilled, during which time the data can become obsolete or irrelevant. Because data is loaded in
batches in warehouses, it is seldom up-to-date and accurate. And even worse, different people see
different versions of it.
Finding (or inventing) the most relevant metrics

Each business has a unique strategy, and therefore must monitor sets of metrics that apply to it,
but may not be comparable to similar metrics used by other companies. Therefore organizations
often fail to to calculate the metrics that make most sense for them. Arriving at an accurate
headcount report is already a challenge, and more advanced metrics such as cross-enterprise
metrics are even more difficult to get. Metrics bringing together finance and HR, or CRM and
HR, or Supply Chain and HR, or any other enterprise data and HR are nearly impossible to
calculate, much less to distribute.
Operational or strategic HR planning ? How about neither?
While all companies recognize its importance, they are often unable to perform proper HR
planning. Whether developing a strategic 5 to 10 year plan to achieve market leadership, or a 12
month plan to control hiring costs, they simply do not have the tools. Instead, they struggle with
multiple inconsistent spreadsheets and manual efforts, leading to redundant work and errors.
Its all too much
At the end of every working day, every business has untold megabytes more data than just 24
hours before, leading to decreased ability to deal with large volumes of data. Whether to find
hidden relationship between metrics, dependencies invisible to the bare eye, or whether simply to
run a payroll reports or an org structure simulation, more data means less likelihood of deriving
value from it.
Usable by the user, of all people
Last but not least, much of the information derived from data is not available in a format that can
be consumed by the various stakeholders. Middle managers need widgets inside the transactions
they use every day. Executives need dashboards they can easily access while they travel.
Business partners need an environment with which they can interact. Each of these formats is
just not there in most cases, and if in rare instance one exists, it fails to render proper data.

Three approaches to address big data pain points

SAP has three approaches for HCM solutions to address these pain points, while providing the
appropriate level of usability according to the user: reporting, analytics, and planning.

Figure 3: Summary of the reporting, analytics, and planning approaches to using big data.
Reporting: establish where you are.
The first approach deals with HR reporting. Reporting solution are designed to provide middle
managers, HR business partners and executives with the information they need to get a clear
picture about what is happening right now in the business.
For on-premise reporting, SAP offers a series of standard reports inside transactions.
Called, embedded analytics, this solution requires BOBJ tools, and has been available since
Enhancement Package 5. We also offer a series of analytics to quickly get to the root-cause of a
problem
Analytics: understand why you're there.
In a general sense, analytics refers to enhanced levels of analysis techniques aimed at
discovering, actionable, relevant, highly specific insights within organizations. However, when
described as a business solution, analytics goes a step further, providing a set of BI capabilities
that allow for a high level of interaction to detect problems, investigate root causes, and push
action to the proper persons. Both HR reporting and analytics are backward looking: they
provide clarity on how the company did and why.

Executive HR Analytics and Advanced Analytics are BW on HANA solutions. Executive HR

Analytics allows executives to check the pulse of their organizations, and quickly react to
problems they see by assigning to-dos, and other resources if necessary. Advanced Analytics is a
tool for BI analysts to answer a question asked by an executive and come to a conclusion
quickly.
Manager Insight allows users to perform analytical tasks ondevice. Reporting and analytics performed on Manager Insight have a corresponding solution on
the cloud, allowing users of SuccessFactors Talent Management andEmployee Central to access
reporting that will help them to make micro-level decisions inside the transactions they use every
day. Cloud Workforce Analytics is a powerful solution that allows customers to perform all
possible analytical tasks on the cloud. Featuring over 2000 metrics and benchmarks, we call it
the Rolls Royce of HR analytics for its refinement and sophistication.

Figure 4: SAP's solution stack and roadmap.

Planning: determine where you are going
Planning is always forward looking, whether dealing with immediate short-term planning of
shifts, 12-month planning of new skills and headcount acquisition, or strategic long-term
planning to prepare for growth and international expansion. Lets take a closer look at each of
these planning time frames.

Short-term planning or shift planning is fairly straightforward: Who will I need tomorrow
morning at 8 o'clock? How many people will I need on Saturday, etc. This type of planning is
dealt with using a partner, Roster Planning by Click Software.
The second time frame is handled by SAP Operational Headcount Planning, and is concerned
hiring plans over 12-18 months. How much will it cost in salaries? How much will it cost in
benefits? How much will it cost in IT or real estate? And how will these new hires support the
company's strategic objectives? Hiring is often done under guidelines provided by finance. With
the SAP Operational Headcount Planning solution, middle managers can plan at the level of
their team, using the average actual costs from the previous year as a starting point. They can do
so with a constant reference to the guidelines provided by finance. In case they exceed the
guidelines, the system will immediately let them know, thus eliminating painful reconciliations
and back-and-forths. This solution is deployed on-premise, and is built on the SAP Business
Planning solution, with specific content for HR.
Finally, the third time frame deals with Strategic Planning, such as a five to ten years plan for
growth, international expansion or societal demographic changes. It is delivered on the cloud
and comes pre-integrated with the SAP Operational Headcount Planning solution allowing
users for example to assess how will a 12 month hiring plan will fit into the company's five-year
plan.

Figure 5: Benefits from an integrated HR Workforce Planning and Analytics solution.

Figure 6: Examples of customers running an integrated HR Workforce Planning and

Analytics solution
Customers who already went for SAP HR analytics have realized significant benefits. Comcast
for example, directly linked its customer satisfaction increase to a reduced turnover that was
made possible by better understanding and empowering its workforce. WellPoint also achieved
some significant savings in the area of turnover by analyzing and then adjusting its hiring and
on-boarding processes. ABC hospital was able to dramatically improve the way it identified,
grew and retained top talents in-house.

SAP today counts with hundreds of customers running its Workforce Planning and Analytics, in
all lines of business and of all sizes. It is interesting to see that some companies with a very deep
quantitative culture chose SAP's Workforce Planning and Analytics instead of developing their
own solution from scratch. This validates our approach, and confirms that quantitative
techniques can be applied to HR to optimize decisions at all levels, whether for middle managers
inside the transactions they use every day, for senior executives to check the pulse of their

organization or for HR business partners to get a detailed picture of what is going on with the
workforce.

In summary, it has become clear to us that success in analytics depends as much on understand
who the users are, and what part of the value chain their contributions are most relevant. In this
blog Ive given a brief overview of how we in Workforce Planning and Analytics are directly
addressing the needs of customers. Many more updates are planned, so stay tuned. For more
general updates about HCM solutions, you can get in touch with me, or follow me on twitter at
watch the wave