Becoming proactive in ensuring successful due diligence and integration can avert problems. | |
| Q: The CEO has asked me to measure the performance of our HR Shared Service. What do I need to consider? |
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| A: The effectiveness of HR Shared Service Centres can be evaulated in a number of centres. Some of the parameters you could include: The feedback from employees and the managers on the service they have received from the SSC. This could be done by riolling out a Voice of Customer satisfaction survey which would include areas such as speed of responsiveness, quality and effectiveness of service, and capabilities of service team The cost of various HR processes that have been placed under the SSC such as recruitment, payroll, employee data maintenance, and benefits management Measurement against service levels and service targets. For example, error rates, time to complete HR processes and sub-processes, and feedback on the service provided The level of technology and automation, including user-friendly self-service options for both employees and managers. |
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| It's also a good idea to benchmark this performance against other leading organisations, to peg where you stand vis-a-vis industry standards. |
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| Q: Our company has recently acquired a global company. I often hear that mergers and acquisitions have resulted in failures. How can I ensure a successful post-merger integration? |
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| A: You are right in stating that mergers and acquisitions often result in failures. Studies of integration reports state that 60-70 per cent could result in failure. However, this is slowly changing, as companies become proactive in ensuring successful due diligence and integration. The M&A activity globally and in India is definitely on the upswing. There are several interventions that need to be addressed during this phase. Some of these include: Recognising and dealing with uncertainty of shareholders, customers, suppliers and employees. The idea is to win the confidence of each of these stakeholders Building a 100-day plan which involves key initiatives such as alignment of top management, instilling discipline through reporting and controls, focusing on quick wins and building employee morale Revitalising the organisation by establishing a vision and stretch goals; investing in basic skill and competence development; establishing a common culture and values; reorganising the structure, communication plan and strategy; implementing performance management and people practices Integrating people and operations by broadening the interface between the acquired and acquiring units. Planning and communication are key to the integration process. It's a good idea to read about some of the best companies which have managed this process very successfully, and have shared the lessons they have learned"" such as GE, Nicholas Piramal and Tata Motors. |
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| The author is Associate Director, PricewaterhouseCoopers. This column will appear once in four weeks, and readers may address their queries to: powerzone@business-standard.com. The answers will appear in the next instalment. |
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