0. Human Resources Leadership Meeting
February 11, 2005
Building the Human Resources and Payroll Environment for the Next Generation of North Carolina State Government

1. Welcome and Introductions
Human Resource Leadership
NEED LIST FROM GARY
Project Team
Linda Hudson
Shannon MacFarlane
Lowell Magee
Bradd Craver
Dorie Kehoe
Ed Brodsky

2. Agenda
Welcome, Introductions and Agenda
HR/Payroll Project Overview
Vision Overview
Process Session Reviews
NC Print Process Flows
Process Requirements
Process Summaries
Change Management/Communications
Open Discussion
Action Items Review
Adjourn

3. Program History
Session Law directed the Office of the State Controller (OSC) to determine the feasibility of developing and implementing a new business infrastructure for the State. The systems included in the State Business Infrastructure Study (SBIS) supported the following business functions: financial management, cash management, payroll, human resources, budget management, procurement, treasury, retirement, and revenue accounting.
The study concluded that continued use of the current business systems may adversely impact the fiscal integrity of state government, as well as the efficiency and effectiveness of its operations. Therefore, the State decided upon a replacement strategy that carefully weighs the risks of potential system failures with the current State budget condition and State funding priorities. The strategy involves an extended implementation approach with the first focus on replacing the Human Resources and Payroll Systems. Ratified Senate Bill 991 appropriates funds to implement this strategy.
Both summary and detail report information can be accessed on the SBIP Website which is located on the Office of State Controller web site:

4. Statewide Business Infrastructure Program (SBIP)
Past Projects
Current Project
Upcoming Projects
Future Projects
Financial & HR Business Infrastructure Study Phase 1
Inventoried present systems and provided assessment of technical and functional capabilities
HR/Payroll Planning Project
Identify process re-engineering and structure
Develop integration strategy and risk analysis
Develop business requirements
HR/Payroll Bid Preparation Project
Develop bidding document for implementation
Select Vendor for HR/Payroll Implementation
Statewide Business Infrastructure Project – Budget & Financials
HR/Payroll Implementation Project
Implementation
Financial & HR Business Infrastructure Study Phase 2
Provided a blueprint for viable implementation options and a recommended course of action
SBIP Data Warehousing Planning Project
Develop needs assessment
Confirm Scope
Develop implementation timeline and approach
Develop business requirements
Statewide Business Infrastructure Project – Tax & Revenue
SBIP Data Warehousing Implementation Project
Implementation
Legend:
Past Projects
Current Project
Upcoming Projects
Future Projects

5. What are the current risks and why should we act now?
Risk of payroll system failure resulting in delayed payments to over 80,000 state employees
Retiring HR/payroll system support staff
Inability to maintain current systems due to retirement of system support staff
Limited resources with the knowledge required to maintain existing technology
Future labor market competition and an aging state workforce
Current recruitment and retention capabilities need to be improved to address forecasted labor and skills shortages associated with retiring baby-boomers
Next generation of employees will demand online visibility to HR and payroll details
Implementation of new system will be a multi-year effort
The risks associated with the current systems will increase each year until the outdated systems are replaced
North Carolina is lagging behind state and private sector systems and process trends
State of North Carolina Employee Statistics

6. HR/Payroll Project Overview
Planning
RFP
Development
Implementation
Begins
Identify HR and Payroll business and functional requirements
Develop business process flows
Execute a formal bidding process.
Confirm HR/ Payroll strategy for implementation
Perform the implementation objectives for a new, fully automated HR/ Payroll system for the State of North Carolina
JAD Sessions – Dec 7 – April 15
May 2005
Prepare Request for Proposal for Implementation Phase
Report Progress to North Carolina General Assembly
Summer 2005
Secure funding for implementation
Fall 2005
Begin Implementation

7. High Level Project Timeline
Plan
Vision
Execute
Close
Project Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Month
Nov
Dec
Jan
Feb
March
Apr
Date 25 1 8 15 22 29 6 13 20 27 3 10 17 24 31 7 14 21 28 7 14 21 28 4 11 18 25
Project Management • • • • • • • • • • • • • • • • • • • • • • •
Change Management
Group I
Human Resources
Group II
Payroll
Technical • –
Project Status Report –
Final Deliverables –
Offsite Working/Holiday HR –
Group I HR –
Group II
Payroll
Technical •
Personnel •
Compensation •
Payroll •
High level
Administration
Management
Administration
technical •
Recruitment •
Job and Salary •
Payroll Processing
requirements •
Applicant Tracking
Surveys •
Labor Cost •
Security •
Disciplinary Action and •
Position Evaluation
Distribution •
Infrastructure
Complaint Management
Analysis •
Time Collection & •
Integration •
Incident and Accident •
Benefit
Management
Tracking
Administration •
Budget Support •
Exit Interviews •
Workforce Analytics •
Competency Based HR •
Organizational
Management
Management •
Performance •
Employee Self
Management
Service •
Training Administration •
Leave Tracking

8. HR/Payroll Project Vision and Goal
HR/Payroll Vision
A strategic business partnership supporting the human resource and payroll needs of State government, enabled by utilizing leading business practices and current technology
HR/Payroll Project Goal
Through a statewide collaborative effort, the goal of the HR/Payroll Project is to develop an enterprise-wide Human Resources/Payroll system utilizing leading industry practices to provide a foundation for effective management, increased efficiency, and the information needed to make timely and appropriate decisions

9. HR/Payroll Project Guiding Principles
Create a seamless HR/Payroll experience for employees
Provide an environment for employees to make informed decisions about their careers and employment benefits
Streamline business processes to drive efficiency
Increase productivity and make the State of North Carolina more competitive
Develop a single repository, with a common set of data elements, to successfully support the State’s reporting and management activities
Move transactions closer to the point of origin (Employee Self Service/Manager Self Service)
Provide a flexible system able to respond to changing HR/Payroll needs
Eliminate redundant systems and duplicative processing
Provide real time access to transaction activity

10. Why Transform NC’s HR/Payroll?
HR/Payroll Today
Transactional Focus
Separate and Isolated from Mission
Fragmented data prohibits meaningful reporting
Manual, paper-intensive processes
Processes and procedures vary by agency
Employees require assistance to change personal data
Inconsistent standards and forms across agencies
Duplicate entry of HR data into multiple systems
Fragmented data across agencies makes statewide reporting difficult
HR/Payroll Tomorrow
Strategic Focus
Key Part of Organizational Mission
Consistent information enables accurate enterprise reporting
Automated, technology-enabled processes
Employees can manage selected personal data
Standardization of forms and similar processes across agencies
Single HR/Payroll system to reduce data re-entry
Consolidated HR/payroll database across all agencies for better reporting
Bradd,
Should we add single employer concept to this slide?
Why do this? System at risk, aging employee population
What do you get out of it?
Business Process Reengineering
Technology Implementation

11. JAD Session Objectives
Industry
Best Practices
Process Designs
State of NC
Process Designs
Project Vision
Scope
Industry Best Practices
HR/Payroll Business Requirements
Future Processes
Business Impact/Benefits
Potential Barriers
Performance
Measurements
Review Process/Subprocesses
Identify Activities
Identify Opportunities

12. What is IndustryPrint™?
IndustryPrint™ is a tool used to represent a logical and sequential collection of best business practices in a graphic format. The three main symbols used in the graphic displays are:
Process: A group of activities in performed by an organization. Manage Human Resources is one of these processes
Manage Human Resources (HR)
Manage
Compensation
(HR-070)
Subprocess: A subprocess is a segment of a core process that focuses on a single business area. For example: Train Workforce
IndustryPrint™ enables the State to avoid ‘clean sheet’ process modeling. It provides the State with a fully-realized example of the process to jump start modeling.
The State will use IndustryPrint™ to create NCPrint. This print will be the model through which the State will ultimately define new business processes.
IndustryPrint™ includes the activities, definitions, and the appropriate activity flow diagram for the subprocess you will design
Business Activity: A business activity is a breakdown of a subprocess that produces a measurable result. For example: Deliver Training
Maintain Classifications
(HR )

13. Why Do We Use IndustryPrint™ ?
Activities are arranged in activity flow diagrams
Components of the activity
flow diagram include:
Activities
Decision points
Subprocess connectors

14. HR-070 Manage Compensation and Classification

15. HR Process Reviews HR Process JADS Process Owners Group 1
Career and Succession Planning
Pam Frazier
Manage Recruiting, Hiring, & Integration
Helen Dickens
Develop and Train Workforce
Ann Cobb
Monitor Employee Health & Safety
Mike Chapman
Manage Labor and Employee Relations
Drake Maynard
Manage Employee Separation
Betty Smith
Group 2
Plan and Manage HR Programs and Plans
Gary Fisher
Design and Maintain Organizational Structure
Joe Stroup
Manage Compensation and Classification
Duane Hinkle
Maintain Benefits Enrollment
Pani Tademeti
Administer Benefits

16. HR Leadership Pain Points
TBD – Group Discussion to identify current state HR issues

17. JAD Session Highlights Career and Succession Planning
Process Overview
Career planning is centered on developing an employee's competencies, and helping to prepare an employee for the next steps in their career.
Succession Planning involves looking at future vacancies in the organization and identifying steps the organization can take to prepare. It can include looking to fill a specific future vacancy or identifying activities to mitigate a general loss of multiple key skill leadership positions.
Improvement Opportunities
A standardized and exhaustive list of skills that span across all agencies
A consolidated procedure and process throughout the State for career and succession planning as it currently seems to be fragmented and informal
A statewide competency modeling effort rather than independent agency efforts
Potential Barriers
Moving to competency based hierarchy will be difficult
Allowing employees to enter their own skills may cause employees to ‘over-inflate’ skills when they are directly related to compensation level
High potential employees cannot be flagged and high performers cannot be groomed for a position due to legal limitations
Benefits
Ability to identify individuals within the State who may be well suited to fill upcoming leadership gaps
Allows employee to enter skills that are not related to a specific job, which will empower both employees and managers in locating needed proficiencies
Gives employee ownership of their careers and gives managers tools they did not have previously
Positions the State as a competitive employer, particularly with the coming labor shortage
Allows HR to function as it is truly intended
Improves decisions on how to most effective use a limited training budget
Enables accountability on the use of training dollars

18. JAD Session Highlights Manage Recruiting, Hiring and Integration
Process Overview
Develop and implement processes, systems and controls to ensure appropriate selection, hiring and placement of staff
Manage current and future position openings through effective processes in identifying best-qualified candidates
Manage the assimilation of new employees into the organization
Improvement Opportunities
Create a single site to submit applications to any State agency
Allow online application
Automated screening of applicants
Streamline workflow enabled position approval
Potential Barriers
New terminology (jobs vs. positions vs. classifications)
Access to computers
Subject Matter Experts felt it would “be difficult to make changes in the bureaucratic environment”
Changes in laws, policies, and processes may affect the re-design of system
Hesitation to leave current system to new consolidated system
Benefits
Less confusion for applicant
More meaningful and useful reports
Data entry process would be easier
More data consistency
More flexibility in making changes and corrections
Self-service resulting in less paper work
Improve image as an effective state government
More responsive and greater interoperability among agencies
State seen as more attractive and competitive employer
Meeting expectations of younger generation
Increased sharing of information between agencies
Ability to attach documents to records (resume)

19. JAD Session Highlights Develop and Train Workforce
Process Overview
The objective of this process is to design and deliver training, education, and development programs to effectively improve skill levels to meet current or future business plans.
This includes:
assessing current skills inventory to determine training and development requirements
creating development plans to achieve or maintain desired skills and corresponding competency levels
Improvement Opportunities
Employees directly view their training history and enroll in new courses via ESS
All internal training tracked in one consolidated system
Mandatory courses can be standardized
Pooling of trainers to teach standardized courses
Potential Barriers
Access to a computer or high speed networks
Supervisor’s fear of employees having too much independence
Elected officials and political appointees may fear the loss of control due to ESS/MSS
Benefits
Improved decision making
Comprehensive training record
Real-time data
Employees have direct access to manage their own careers
Training is linked with new competency-driven pieces
Good networking tool among agencies
Better informed supervisors
Opportunities for group purchase of training materials
Training records automatically updated upon completion of training

20. JAD Session Highlights Monitor Employee Safety and Health
Process Overview
Implement plans and practices that ensure the organization consistently meets government reporting requirements related to health and safety
Track work related incidents and their outcomes
Develop incentives that promote a safe work environment
Improvement Opportunities
Completing and approving forms via workflow
Application of SIC and more discrete codes at the job level for improved reporting
Tracking the types of incidents across jobs as well as within an agency
Potential Barriers
All employees do not have access to computers
Agreement on common data elements may be difficult
Industrial commission makes frequent changes in requirements
Need to determine who is going to pay for this going forward
Security of system if all data is in one place
DOT does not use the same Third Party Administrator that other agencies use
Benefits
Reduced clerical burden
Focus on solving problems, rather than gathering information
Better able to measure the improvements with better information
Increased efficiency
Cost savings through reduction in Worker’s Compensation overpayments
More open communications between employees and supervisors
Cost savings from electronic transactions
Save physical space with reduction in paper
Managers more involved with safety through ESS
Ability to flag salary continuation that the supervisor can turn on and off

21. JAD Session Highlights Manage Employee Relations
Process Overview
This process includes managing communications with employees as well as monitoring and resolving grievances, disciplinary actions, and discrimination complaints.
It also includes activities around performance appraisals
Improvement Opportunities
Consolidated data in one system
Automatic notifications for follow up activities
Making grievance policies more proactive
Consolidated data should make it easier to identify trends
Potential Barriers
Access to computers and other infrastructure issues
Agencies currently have different processes
People are resistant to change and will need extensive training
Terminology differences
Fear that data will be used to hold up progress, rather than for its intended purpose
Managers may not be ready for the accountability
Employees may not trust their managers
Benefits
The ability to spend more time on people activities and less time on administrative activities
Better data should make it easier to identify trends
Better business intelligence will be available
Data is more readily available for decision making
The ability to accomplish things at the lowest level
Connect previously disjointed systems

22. JAD Session Highlights Manage Employee Separation
Process Overview
The objective of this process is to manage voluntary and involuntary employee terminations, including performing exiting activities and recording separation data.
Activities may include collection of employer property, packaging of severance or other separation packages, and discontinuance of benefits
Improvement Opportunities
Sending out an acknowledgement of separation with frequently asked questions and benefits contact information
When an employee is moving between agencies, handle the process as a transfer rather than a separation
Have a checklist for hiring and separation
Workflow notifications to appropriate parties (security, fixed assets, etc.) when an employee is separated
Potential Barriers
Access to computers and computer literacy
Different technology infrastructure at agencies
Challenge to reach a consolidated decision on some issues
Employees currently see the agency as the employer, rather than the State of North Carolina as the employer
Benefits
Ability to transfer between agencies and to take employment “history” with employee
Ability to report turnover on a state level with real time information, leading to better workforce planning
Ability for employees who have a leave of absence or are rehired to keep historical information
Better tracking of property should increase recovery from separating employees
A system-generated separation letter should reduce the number of follow-up questions and grievances and provide a better information trail
More transparent and less onerous for employees
Automatic workflow notifications when someone leaves so no step is forgotten
Separating employees are left with a positive experience

23. Organizational Themes
TBD – Common themes summaries

24. What is Change Management?
Change Management, as it pertains to projects like this, is primarily about:
Building and sustaining a leadership coalition to guide successful project completion
Reducing long-term costs of the project
Fully understanding and softening the impact of changes to affected employees
Ensuring that behavioral changes brought about by the project are “made to stick”
Bringing about higher organizational performance as a result of the project
Reducing risks related to:
Disruptions in productivity and customer service
Missing project time and budget targets
Misalignment of expectations
Metaphorically, Change Management is…
The grease that makes the project (and the resulting new business processes) run more smoothly, and
The glue that gives the project a sustainable, valuable impact

25. The Change Curve – change is difficult, but it can be managed
Organizational Performance
Commitment
“This was the right thing to do.”
Adaptation
“This is hard, but we can do it.”
Baseline
Uncertainty
“What does this mean for me?”
Withdrawal
“I’ll do what is necessary to survive.”
Resistance
“I can’t work with all of this uncertainty and turmoil.”
Bail Out?
“This is not something I want to be a part of.”
Time
Key to Success: Reduce the duration of the trough, and accelerate the upslope via a well-planned and executed change management program.

26. Keys to success in Change Management programs
The keys to building and implementing a successful change management program include, among others:
Develop and adhere to a set of guiding principles to drive your change strategy
Build and foster an extensive change network of leaders and employees with clear roles in championing the case for change
Understand your stakeholders, their interests, their needs, and their motivations…and communicate with and involve them accordingly
Communicate, communicate, communicate – develop a well-thought-out communication plan and execute on it
Develop and sell a compelling business case that works at multiple levels – management, employees, and other stakeholders
Empower all project team members with a full understanding of change management and how they, as members of the “change team”, must promote the change strategy
Surface dissatisfaction and dissension and address it early

27. Change management helps projects succeed…and makes them stick
Over half of major initiatives fail to meet anticipated results due to inadequate attention to people-related issues.
Top 10 Barriers to Success
Resistance to Change
82%
Inadequate Sponsorship
72%
Unrealistic Expectations
65%
Poor Project Management
54%
Case for Change not Compelling
46%
Project Team Lacked Skills
44%
Scope Expansion / Uncertainty
44%
No Change Management Program
43%
No Horizontal Process View
41%
IT Perspective not Integrated
36% 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Percent of Organizations Responding in Each Category (multiple responses were allowed)
Source: Deloitte & Touche’s annual CIO survey
Key: People-related Issues

28. Change Management Framework: The 8 Steps of Change
Implementing and sustaining change
Engaging and enabling the whole organization
Creating a climate for change 1 2 3 4 5 6 7 8
Increase Urgency
Build the Guiding Team
Get the Right Vision
Communicate for Buy-in
Empower Action
Create Short-term Wins
Don’t Let Up
Make it Stick
5 Kotter, John P. and Cohen, Dan S. The Heart of Change. Boston: Harvard Business School Press

29. Typical approach to Change Management
Component
Typical Results
Leadership Alignment
Clear project governance and decision-making structures
Provision of resources when required
Removal of organizational roadblocks
Communication Planning and Execution
Managers and employees understand changes and embrace them at go-live
Proactive identification of resistance and risks
Wide-spread buy-in
Organizational Transition Planning
Impact of the change is understood and well-planned-for
Management agrees to changes required to sustain the new environment
Stakeholders understand how the change will specifically affect them
A more efficient organization ready to work in the new environment
End-User Training
End Users are prepared to do their new job on day one
Streamlined implementation with minimal disruption
Capability Transfer
Post-project, the state maintains internal capabilities to sustain the change
Project Team Effectiveness
Team members trained and ready to do their job
Team members rewarded for their project activities
Team members feel like part of a team

30. HR Leadership Action Items
?????March 11, 2005 – Next HR Leaders Meeting

31. Contact Information
Web Site Address:
For questions, comments, concerns, please us at: