Lessons Learnt from Fusion Implementation at Euroclear HCM SIG March 2014 Rossi Dzhedzheva: Fusion HCM consultant (rdzhedzheva@deloitte.co.uk) Gregory Deruelle: Head of Corporate Support Roadmap (gregory.deruelle@euroclear.com)

Agenda Euroclear Presentation Implementation objectives Implementation strategy Challenges Lessons learnt Q&A We have gone Live with Goals successfully in January. Next modules going live in the coming months are Performance and Talent Best practice suggests Global HR should be the first module to implement to provide the master data for all remaining modules Euroclear’s main objective, however, was to deliver quick wins to the business, providing “visible improving steps along the way” This meant we had to adopt a unique back to front implementation strategy, starting with the most strategic modules Simple co-existence model was created to mimic HR2HR No coexistence altogether as a result

Euroclear presentation

Euroclear is… A post-trade financial market infrastructure which is user owned and user governed The Euroclear Group is the national Central Securities Depositories (CSDs) for Belgium, Finland, France, Ireland, the Netherlands, Sweden and the United Kingdom serving local clients for local transactions Euroclear bank is the leading International Central Securities Depository (ICSD) covering more than 1,000,000 securities, with access to domestic securities from over 40 markets and settlements in 53 currencies worldwide Our Clients Facts & Figures All major financial institutions in more than 90 countries and millions of retail investors. Global and local custodians, broker dealers, central banks, commercial and investment banks, investment managers, supranational organisations and a wide range of issuers. Over €540 trillion of transaction settled yearly €23 trillion of assets held in custody €700 billion of collateral mobilised daily 4

Our organisation Worldwide footprint, but Europe centric Headquarters based in Belgium 7 main countries and 8 representative/branch offices 3600 employees (4700 incl. contingent workers/vendors)

Implementation objectives

The context at Euroclear For the past two years Euroclear has been undergoing a major HR transformation The aim of the transformation is to deliver a stronger HR division in support of the business:

Compensation/Benefits Implementation objectives Euroclear chose to implement Oracle HCM Cloud as one of the main pillars of its transformation Reduce costs of maintaining current PeopleSoft solution which is heavily customized and internally hosted Have a truly global & integrated approach to Performance and Talent management Have a single source of truth for all employee data enabling global reporting and real BI trend analysis Decommission multiple disconnected and isolated HR databases which led to time consuming administrative and paper-based processes Euroclear chose to implement Oracle HCM Cloud as one of the main pillars of the HR Transformation: To reduce costs of maintaining current PeopleSoft solution which is heavily customized To have a truly global approach to Performance and Talent management To have a single source of the truth for all employee data and quickly report on it on a global scale To decommission multiple disconnected and isolated HR databases which led to time consuming administrative and paper-based processes Core HR Learning Talent Recruitment Time Compensation/Benefits Internal tool Payroll Case Management

Compensation/Benefits The future landscape at Euroclear The final objective is to move all HR applications to the Oracle cloud platform Core HR Learning Talent Recruitment Compensation/Benefits Time Core HR: Manage Workforce Structures New Hire Person Management Person Information Manage Employment Terminate Employee My Portrait/ Person Gallery Talent: Goal Management Performance Management Talent Review Succession Planning Comp: Compensation Management On-cycle compensation review Off-cycle salary and compensation changes Benefits Administration Payroll Case Management Outsourced

Implementation strategy

Traditional deployment strategy Usually Global HR is implemented first, however this wasn’t a suitable option for Euroclear Global HR is required to provide the master data for all Talent modules. If this is not implemented, a temporary coexistence model must be adopted Goal and Performance Management are heavily inter-dependent so should be implemented together Talent review and succession planning are closely linked, and typically use the data collated in the performance review cycle. Compensation can be dependent on data from all modules and so should be left until the end Why not: Due to complexity of the technical architecture in Euroclear and integration complexity, given our regulated constraints. it would have taken too long to implement Global HR first The main objective of the project was to improve HR service by prioritizing the use of more strategic modules like Performance, Talent and Succession to drive value in the organization Why this approach was not suitable for Euroclear: HR management steered to deliver added-value functionalities first Complex internal technical architecture (cloud integration)

Talent Design & Delivery Where are we in our journey To deliver quick wins to the business our implementation strategy started with the most strategic modules Module by module implementation strategy Temporary “manual” coexistence model Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Time tracking rollout Initial Design Core HR Local Design Compensation and Benefits Talent and Succession Delivery Core HR Goals, Performance & Talent Design & Delivery Taleo Learn To deliver quick wins to the business we had to adopt a module by module implementation strategy, starting with the most strategic ones – Goals, Performance, Talent and Succession A temporary coexistence model had to be adopted to maintain Core HR data mimicing HR2HR Phase complete Go-Live

Implementation methodology A hybrid methodology between Waterfall and Agile provides numerous benefits, but requires continuous planning Plan Design Build Deliver Operate Deploy to Production and Plan Confirm Design Configure Requirements Validate configuration Sprint Review Meeting Zoom on sprint Iterative approach for multiple releases of each Sprint We adopted a hybrid methodology between Waterfall and Agile (Wagile) to ensure we build, test, and validate the system in logical process groups, called ‘sprints’ Agile product delivery requires continuous planning across the lifecycle of the product, allowing business critical features to be delivered on priority High Business Value Quick delivery of working software Solutions are delivered based on business priorities Early return on investment as working code is produced early on in the process Rapid delivery of working software Develop solutions based on client business priorities Working software is the main objective of the agile team Every activity must be beneficial to the main objective The result of each Sprint is a working solution with minimal bugs High Adaptability Requirements gathered at the start of each Sprint allows for adaptability Increased opportunity for changing requirements and altering global design Multiple releases allow for continued change Adaptive evolution of requirements from high-level user stories to detailed requirements through continuous client discussion Agile methods embrace change as inevitable. Business needs are changing rapidly and agile methods do not assume that requirements can be frozen Increased client satisfaction as the system is adapted to their needs Improved system design that is simple and easy to understand (due to frequent refactoring of code) Better alignment with Cloud release management Low Delivery Risk Sprint Reviews help confirm the solution meets client expectations Collaborative self-directed teams help increase accountability Improved quality due code integration and test within each iteration Sprint Reviews after each sprint helps team confirm working software meets client needs. So end product is closer to what the client wants Continuous Improvement – Method builds in consistent feedback loop with client and internal team via Sprint Review/ Sprint Retrospective Each Sprint team able to improve High Visibility Increase project visibility and communication Daily Stand-up, Kanban Board, Burndown Chart increase project visibility and communication Cross functional, self organizing teams provide increased communication, clarity, and productivity Main objectives were: More controllable approach with tangible results Earlier adoption of the new tools by HR teams Higher adaptability to business / technical changes

challenges

Challenges There were numerous challenges along the way Challenges Impact Strategic Timelines expectations Multiple projects Global vs. local design Change management Timescales dependencies on numerous factors Project timelines and key resources involvement Aligning local countries to a global model can be a challenge Training and change management should apply to everyone Functional Simplicity Customizations Cloud release cycle Mirroring exactly what you have today creates more complexity Some areas might feel like a regression Constant changes on project planning Strategic Expectation that SaaS implementation will deliver value quickly Timescales around implementing a SaaS solution are dependent on a number of factors, some of which can be scoped at the start of the project (module scope, number of interfaces etc.) and others which are less predictable (technical challenges, stability of the application, etc.) 2. Multiple projects running at the same time Simultaneous projects significantly shift project timelines and also impact key resources involvement 3. Global vs. Local design Aligning local countries to a global model can be a challenge 4. Change management Training and change management do not only apply to main users, but also to HR staff, if they are going to be responsible for the general management of the system Functional Simplicity Mirroring exactly what you have today creates more complexity 2. Customizations are not possible in Saas to the same extent as in PeopleSoft When moving from an on-premise to a SaaS solution, some areas (particularly in the Global HR module) will feel like a regression in terms of functionality, because customizations are not possible to the same extent 3. SaaS has 2 annual releases New releases bring new functionalities, but also require substantial regression testing and can significantly impact project timelines Technical (in more detailed in lessons learnt) 1. Data migration The scope (historic data) and scale of data migration have significant impact on project planning and modules functionality – cannot make the most of Talent and Succession functionality without core HR data (jobs, positions, competencies). The cleanliness of the data can also have an impact – rubbish in – rubbish out 2. Specific skills and knowledge, time and effort are required to build complex reports in BIPublisher 3. Back to front implementation requires temporary co-existence model The complexity of the co-existence model can have a significant impact on the intended implementation schedule because of: Time spent building interfaces which are short-term only Possibility of double entry Increased probability of data inconsistency and errors Increased costs of maintaining multiple applications Technical Data migration Reporting Interfacing Back to front implementation Maturity of Fusion Significant impact on the intended implementation schedule (trial and error approach) Unclear functionality Lack of skills and knowledge on the market

Lessons learnt

What about Fusion? It’s perfect for a standalone implementation, but still needs to improve for a corporate integrated solution Fusion is functionally working fine … but technically not mature Reporting still highly technical Data Migration is very complex Interfacing seems not straight-forward Oracle reactivity is good, but Support is still in learning mode Stability/release management is not yet at par with PeopleSoft and EBS Need to train your own people, given the lack of resources on the market The Fusion Community is key to support you Need strong support from Oracle management (& development) Can be used, without compromises, for large organisations as of R8 Fusion is functionally working fine … but technically not mature Reporting still highly technical OTBI is lacking a lot of data objects BI publisher is powerful and give access to the whole Fusion DB, but it’s SQL coding Highly difficult to map fields between screens and DB/reports Data Migration is very complex. No transformation in Fusion. Highly difficult to map fields between screens and DB … “what you see is not what you have loaded” Build in data objects don’t cover the whole Fusion DB Very sensible to data issue Interfacing seems not straight-forward Oracle reactivity (Service and Enhancement requests) is rather good, but Support still in learning mode Stability/release management is not yet at par with Peoplesoft and eBS Very big functionality upgrade at each release Regression problems between release/patches Oracle moving from ad-hoc release management to factory release management but not running yet Need to train your own people, given the lack of resources on the market SI are still in learning mode Technical resources are most of the time off-shore, but Fusion not suitable for Factory approach Many larges projects are still on-going The Fusion Community is key to support you Support focusing on problems and cloud Operations Community for how-to questions Oracle developers are part of the community Need strong support from Oracle management (& development) To have preview of coming features For escalation path for problems and defects Can be used for large organisations as of R8 Enhanced features are available as of R8 (workflow, custom roles, …) 17

Lessons learnt Simplicity is key Create a global design and stick to it Assess local/regional requirements Simplify existing systems with Fusion Don’t try and build what you already have Communicate clearly the advantages that are gained Don’t get hung up on aesthetics Don’t underestimate testing Create a global design guided by the seeded functionalities in Fusion, and stick to it. The global design should only be changed in local countries for legal or regulatory reasons Start the requirements gathering piece from the vanilla system, not from a blank sheet of paper. Keep in mind that it is possible to simplify existing systems with Fusion. If the system does it, use it. If the system doesn’t do it, don’t try and force it in. It will lead to problems further down the line. When moving from an on-premise to a SaaS solution, some areas (particularly in the Core HR module) will feel like a regression in terms of functionality, because customizations are not possible. Take the time to explain to the whole team the advantages that they are gaining despite this perceived backward step. Don’t get hung up on aesthetics, such as renaming or hiding fields. This is more trouble than it’s worth, and the system appearance will more than likely change in the next release 18

Lessons learnt Implementing a new system is not a stand-alone project Implementation plans should allow for various complexities Technical challenges (data migration, interfaces) New Releases Projects in parallel Begin the technical work as early as possible Design new processes with the system in mind Don’t underestimate change management The process design, change management, functional and technical teams should work together Timescales around implementing a SaaS solution are dependent on a number of factors, some of which can be scoped at the start of the project (module and geography scope, number of interfaces etc.) and others which are less predictable (technical challenges, stability of the application, level of knowledge transfer). Implementation plans need to allow for these complexities in the same way you would with non-SaaS deployments. Include the twice-yearly new releases in your plan: they will require a lot of attention and resource time for regression testing The scope and scale of your data migration will also have significant impacts on your schedule if left for last minute. Any new required interfaces should focus purely on data items which are critical for other processes (e.g. payroll). A detailed data cleansing and validation strategy will need to be developed Simultaneous projects can add complexities, significantly shift project timelines and also impact key resources involvement. Make sure these are prioritized and planed well in advance, so people can have enough time for their day-to-day job. Begin the technical work (e.g. interfaces, data migration) as early as possible, if not simultaneously with the functional work. This is likely to be the area that causes significant delays Make sure you have clearly defined objectives of what you want to achieve through the implementation, and ensure that everybody on the project team and sponsorship are aligned with those objectives When designing new processes have the system in mind. SaaS limitations mean you will not be able to meet some of the process requirements you create if you do not know the system limitations from the start Effective management of change is too often an afterthought of transformational programmes and is often a reason why over half of major business initiatives fail to realise anticipated benefits. That’s why Proactive and on-going change management must be an integral part of the programme to help build change momentum and clearly communicate the benefits of change. A significant level of change management and training has to be delivered to HR staff if they are going to be responsible for the general management of the system The process design, change management, functional and technical teams should work team should together throughout the project as there are heavy interdependencies The project work closely with the business in order to manage expectations better on an ongoing basis and make the correct decisions. Take time to articulate early on what the business will get that it does not today 19

Any questions?