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June 4, 2010

In Depth: Aviva rolls out SaaS HR

As part of its Quantum Leap strategy to get 12 European businesses acting as one, Aviva is rolling out a single, software as a service (SaaS) human resources system from Workday. "At a meeting of regional CEOs, the question was asked, 'if you were

By Cbr Rolling Blog

As part of its Quantum Leap strategy to get 12 European businesses acting as one, Aviva is rolling out a single, software as a service (SaaS) human resources system from Workday. “At a meeting of regional CEOs, the question was asked, ‘if you were starting your own company, would you run it this way?'” regales Andy Moffat, European human resources director at Aviva. “There was a stony silence.”

Long-term savings, fund management, pensions and insurance provider Aviva had something of an epiphany recently. It realised that things could hardly be run less efficiently if it tried: across Europe, it had 12 businesses that were acting almost totally autonomously, with different procedures and providers being used willy nilly in each. No function – finance, technology, procurement – was harmonised across these different European businesses, and there were yet more disparities between Europe, the US and Asian operations. When it came to human resources, Moffat says, “We had 12 different appraisal forms in different European geographies, with different procedures for each. If someone moved from one geography to another, they had a whole new set of procedures to learn. It was absolutely nuts.”

So as part of a worldwide One Aviva strategy, and a European harmonisation strategy called Quantum Leap, the various regional CEOs and their management teams began looking at how this collection of semi-autonomous businesses could start to think and act like one. Technology, as is so often the case, was critical to gaining a single view of what was going on even before any of the strategic work could begin. “Andrea [Moneta, CEO of Aviva EMEA] came to me and asked what you would think was a fairly simple question,” says Moffat. “He wanted to know how many people we had in each geography, and what they did. It took me three weeks to give him an answer, and I was then only 80% confident in the accuracy of the data.”

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The numerous, disparate HR systems in each of the 12 European businesses meant that visibility into such data was but a pipe-dream. “Our technology was like a bowl of spaghetti, and we wanted lasagne,” laughs Moffat.

The European management team decided early on that when it came to the Quantum Leap strategy, it would not simply bring in an army of consultants, but design the new strategy themselves. “We wanted to own everything we do,” Moffat explains. “This is a model built by the European management team. It isn’t a Boston Consulting model, it’s our model. That’s been key. Other parts of the business have used consultants and actually came and asked us how we had got further than they had and faster.

“The other key decision we made was that we would use labs,” Moffat continues. “If we believe we have something we are using internally, and we can scale it up, then that is what we will use once we have tested it. If we haven’t already got it, then we will pilot it with a view to rolling it out on a pan-European basis.”

Pressure mounts

The European management team were under a fair bit of pressure to get their strategy right. Not only had they designed it themselves, but the convergence programme in Europe was considered a pilot for the convergence agenda across Aviva globally. The European businesses account for the second-highest staff count, the highest number of business units and the greatest degree of diversity and complexity, due to the plethora of languages and different jurisdictions. “We also have a great range in terms of the sizes of businesses,” says Moffat, “from 4,500 people in France to 60 in Lithuania.”

From an HR perspective, key to the Quantum Leap strategy was going from numerous different HR technologies in each of the 12 European businesses to one. If the only advantage was getting a clear view of what skills the company had and where they were located, it would have been worth it, according to Moffat, but it was also about standardising HR processes and hopefully getting a better deal by having a single supplier across Europe.

So how did the company go about deciding on a single system? At first glance, it seemed Oracle’s HR software, bolstered by its PeopleSoft acquisition, was an obvious choice. Aviva already used Oracle HR in the UK, Ireland and France, and also used Oracle’s general ledger and payroll software. “But when we looked, we found actually that each geography was on different versions, so there was an upgrade issue to go pan-European anyway,” Moffat says. “There was also a general feeling that Oracle was not especially easy to use, and corporate IT definitely believed that software as a service (SaaS) was the right direction to be taking.”
Moffat and his team ended up looking at two potential options: moving the other geographies to a single version on Oracle but staying on-premise, or rolling out Saas vendor Workday. “We were looking at these two as having the potential to become the single global HR solution eventually – not just Europe,” Moffat says.

Since the firm already used Oracle it asked the firm for a straight-forward request to tender. But since Workday was an unknown quantity, it asked the firm to run a full pilot, taking over the live HR systems for Romania, Hungary and the Czech Republic, including local language support, within three months.

Moffat says the key question was not how fast the software was, but how much the users liked using it and whether they found it intuitive. The single, hosted model would anyway give Moffat that important visibility into key metrics across the units, while also saving the IT team effort in supporting local on-premise applications in each geography.

Success for SaaS

“The Workday pilot exceeded all our expectations,” Moffat says. “It got an 86% satisfaction rating from end users, which I’ve never come across, and it passed all the technology requirements around security, scalability, interfaces to other systems and so on.”
Meanwhile Oracle had showed Aviva some of its forthcoming Fusion Applications which are not yet available, and also suggested an option was to use Oracle hosted by one of its partners to get that SaaS model that Aviva favoured. But when Aviva took up references of how this had worked for other companies it heard that some had not always been satisfied when dealing with Oracle and a partner in such an arrangement.

The decision then was to roll out Workday across Europe, and then globally. Some Oracle applications may still be used temporarily where they have features not yet available in Workday, including some recruitment and learning management functions. The Workday pilot took in 500 of Aviva’s 10,500 staff in Europe. Moffat is confident that the SaaS offering will be rolled out to every European geography by the end of 2010 or early in 2011, and the intuitive nature of the software means that training is modest.

“The great thing about rolling out SaaS is the flexibility, the cost advantages, and the fact that it allows someone else to worry about things that we shouldn’t be worrying about ourselves,” says Moffat. “And we won’t need consultants to come in when we want to make a change. This time we’re not going to force-fit our processes onto a technology – we’ll use Workday’s HR processes. I don’t believe any competitors will be as joined up as we are in Europe.”



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