is that they go only so far at the moment. i'm talking about the typical vertical structures that organizes employees according to the chain of command - the reporting structure - and the organization's financial structure. these are the structures that are typically reflected in the org charts we see today. Thomas Otter's post about org charting tools is a good read to stimulate ideas around this topic.
changing how the org structure is designed and depicted presents a good opportunity to better integrate HCM implementations with the rest of an ERP system. it's also a huge opportunity for HR to become better aligned with an organization's strategic goals. let me explain what i mean.
in the world of ERP implementations today we take a process centric approach to how businesses should organize themselves and their ERP systems. this is culminating in BPM systems becoming more and more important and it is what SAP's BPX community is about. it is at the heart of what is so important about SOA and ESA.
now if we're serious about the escalating emphasis on processes then organizational structures are going to have to start reflecting that. we'll know they do when we see horizontal structures and flatter structures on org charts more often - the structures Frank Ostroff wrote about in his book about horizonal organizations.
if organizational structures are to accurately reflect and even influence process design there will be all sorts of far-reaching implications for how SAP HCM projects are conducted. to indulge in a little SAP tech speak: to more strongly reflect an organization's core processes in the org structure we need to use more organizational management objects than just the usual ones: position, job, org unit and cost center; the work center object becomes more important, the skills and qualifications object becomes more important. these are objects that can be used to organize people into teams according to what their skillsets are. doing this will lead to more process oriented structures, which will also means a more horizontal flavor to the structures.
the great implication for HR itself is that its alignment with an organization's goals immediately takes a step forward when the org structure - an HCM component - is tied directly to the processes that serves the goals of the business.
we can take this one step further to a practical application in business process modeling: we need to get to the point where all processes in SAP are modeled not only in terms of a role, but all the way through to an actual org structure position (which would be tied to a role). in other words, not only do we define hire-to-fire processes in terms of roles and actual org structure positions, but we do the same for e.g. order-to-cash processes. it is inevitable that HR will need to be involved on some level with non-HR teams in the design of their processes when this becomes the case.
an organization that places proper focus on its processes requires performance management and rewards and recognition processes and systems to ensure the success and continual improvement of those processes. the performance of an employee in executing a process must be evaluated. and employees must be rewarded according to their performance. both performance management and reward and recognition fall in the domain of HR & Payroll, and since the the org structure does also, it means that HCM forms an integral part of transforming and measuring a business around it's core processes.
the point of this post is really to point out how important HCM's role becomes if an organization is going to focus on improving its core processes. how there's a very natural route to HR's work becoming better aligned with the strategic goals of the organization. and how the interaction between becoming more process-focused and having the org structure reflect this focus are integral parts of this process. all this is underscored by the push towards talent management implementations today. what i'm also saying is that talent management implementations will need to take a strong look at the org structure as well to be optimally successful.
we need better tools to accomplish the goal of integrating the org structure with the processes of an organization - even if this doesn't result in horizontal or even hybrid organizations. we need better tools to design organizations that best serve the needs of customers. In the ASUG HCM benchmark study a strategic best practice is for organizations to run what-if scenarios on its org structures. but the ability to run what-ifs on org structures is not a simple process and not one that's supported today to the extent that it needs to be.
i predict that before too long we'll have tools that will allow us to design org structures in a powerful way by looking at the org structure in terms of processes and by allowing org structure elements to be tied into process design. maybe these tools will allow us to adapt organizations on the fly according to how processes change. maybe even according to how the interaction between people and teams changes thanks to the collaboration platforms and other web 2.0 concepts that's seeping into the ERP world. for certain that's going to add more value than the ability to just move some org units around without knowing if that reduces the number of process handovers or reduces the process approval complexity.
Comments