Tough economic times present a variety of HR challenges and prompt companies to make corporate cutbacks, put cost-effective measures in place, and streamline operations while at the same time retaining key talent. With increasing pressure to contain costs and a high percentage of operating expenditures arising from compensation and benefits, one of the first places CFOs look to make cuts is people-related expenses. Reducing headcount may seem like an obvious way to save on costs; however, cutting key talent could seriously affect an organization’s ability to deliver on business goals.

A smart way to implement strategic corporate cutbacks is to enact rightsizing. This involves downsizing a company’s workforce to the point where the number of employees remaining is deemed to be the right size for the organization’s current condition.

SAP Talent Visualization by Nakisa (SAP TVN) allows SAP ERP HCM users to visualize, analyze, and plan their workforce. SAP TVN is a front-end solution (meaning that the solution relies on the SAP system as the back-end data source) that complements SAP ERP HCM. You can use SAP TVN on many different versions of SAP ERP HCM , all the way back to 4.7.

Execute Your Rightsizing Initiatives

I will now show you how you can use SAP TVN to perform rightsizing.

Step 1. Gain a complete visual understanding of your organization. When starting rightsizing activities, it is imperative to have a complete, unified view of your organizational structure. This gives you a good idea of where you can and cannot make cuts. Begin by going to SAP TVN’s OrgChart module by launching it from your corporate portal. (When the solution is implemented, it is configured with a URL so users can launch SAP TVN by clicking a link from their portal.)

The screen that comes up is the OrgChart module. It provides you with a high-level overview of the company structure. You can drill down into org units, jobs, and employee talent profiles, view your entire corporate structure, or focus in on a department’s specific hierarchy. By clicking any org chart box in the hierarchy view, you can retrieve more information about that specific employee, such as competencies, training, and education to evaluate their cost and value (Figure 1). In Figure 1, you can analyze the employee who currently occupies the Human Resources Director position, Anita Dion, and evaluate her competencies, career path, and reporting structure.

Figure 1

An example of a high-level org chart view and drill-down capabilities into employee talent profiles

Step 2. Analyze your talent pool. The next step in rightsizing is to get an in-depth view of your talent. For smart cutting, you need to pinpoint where your high-impact roles, top performers, and high potentials are and ensure critical skills are retained.

From your portal, go to SAP TVN’s SuccessionPlanning application. This module provides a variety of reporting options including key positions, top performers, high potentials, and positions with successors to give you easy access to critical talent planning information. A variety of display options, including graphical charts, nine-box grids, and detailed talent profiles, provide insightful perspectives into your workforce. Easily analyze your employees’ performance and potential, readiness to assume strategic roles, flight risk, and bench strength to ensure talent is aligned with business goals .

When succession planning, you want to make sure your key roles are filled with your best talent. Let me give you an example. In the SAP TVN SuccessionPlanning module, there is a key positions report that shows all of the roles that have been indicated as critical to the success of your organization. By clicking one of these key positions, you can see who is occupying that role and evaluate that person. In Figure 2, you can see the Sales Director for Denmark role has been marked as a key position. Bridget Olsen currently occupies this role and you can also see that she is a top performer with excellent proficiencies in all of her competencies. With such high marks, Bridget should be retained when rightsizing.

Figure 2

An example of a key position filled with top talent

Step 3. Model various rightsizing scenarios and ensure smooth organizational change. After analyzing your talent pool, the next step is to come up with different workforce transformation scenarios. SAP TVN offers what-if scenario modeling capabilities with the OrgModeler module. Through a drag-and-drop interface, OrgModeler enables you to move individuals to different teams, create new teams, or even eliminate roles or departments. The inclusion of key analytics in your org chart, such as departmental head counts, org units, salaries, and budgets, help you immediately see the impact of your decisions on the organization.

Open the OrgModeler application from your portal. OrgModeler guides you to start by either importing an up-to-date snapshot of your organization structure (it is important not to affect live data when planning scenarios) or returning to a previous modeling scenario. In this case, I’ll tell you how to create a new rightsizing scenario.

Suppose HR has decided to eliminate the Accounting Call Center OrgUnit. From the OrgModeler management options in the Scenario Information tab (Figure 3) go to the Analytics field. Then, you can choose to attach analytics to your rightsizing scenario by clicking Add Analytics from the drop down (Figure 4).

Figure 3

The Accounting Call Center OrgUnit before rightsizing

Figure 4

Making changes to the OrgUnit

In this case, you are adding the OrgUnit analytic. In the OrgModeler tool’s Organization Structure tab, where you perform your modeling scenario, right-click the Accounting Call Center org chart box to delete the department from the organization chart. Now you can see the effect of change on your analytics. Remember, you are not affecting live data — this scenario is simply a blueprint for how the organization could look after rightsizing.

Figure 3 shows how to delete the Accounting Call Center OrgUnit by right-clicking the org chart box. Figure 5 shows the updated analytics after deleting the org unit from the hierarchy (updated from nine org units to eight org units).

Figure 5

The overall organization after rightsizing

Step 4. Implement your rightsizing plan. With all the required talent information at hand, HR has the concrete metrics and rationale to clearly identify the healthiest cuts to make. Once organizational transformation plans have been finalized and approved by senior executives, talent planners can share plans with key stakeholders to facilitate the transition.

Once the process of rightsizing has been completed and cuts have been made, any updates made to the system are automatically reflected in SAP TVN. You can use several different ways to reflect updates, depending on your configuration. It could be an XML script that writes back to the system or you could update your system directly and have the changes reflected in SAP TVN. However, when you reflect the update, be sure to clearly communicate your organization’s newly changed structure to employees so they understand the new corporate hierarchy and are able to collaborate with colleagues.

In Figure 6, you can see an org chart view of the new corporate structure that you can use to help facilitate workforce transformation. Employees can see each org unit and get an up-to-date view of the enterprise.

Figure 6

An org chart view of the newly rightsized organization

Step 5. Maintain value and productivity. After rightsizing efforts have occurred, you are still not finished. You now need to prevent a workforce exodus and focus on developing your remaining talent. Right away, you need to create career development paths for high-potential employees to mitigate risk, retain top performers, and improve employee engagement and productivity.

Open SAP TVN SuccessionPlanning from your corporate portal and take a look at the remaining employees. Who are your high potentials and top talent? These are the people you now need to focus on. Click a report to see a listing of all individuals who make up those groups and get more information about the employees you need to develop and retain by clicking that person’s name. The employee’s talent profile then appears in the right-hand pane, allowing you to analyze their competencies, qualifications, performance, potential, and career aspirations. Through their profile, you can nominate employees as successors to key positions by clicking the Set as Successor button. Then, match them to a role and put career plans in place by clicking the Add Career Type button (on a subsequent screen not shown in Figure 7). SAP TVN SuccessionPlanning gives you the clarity you need into your workforce to cultivate and retain critical talent.

Figure 7 shows a report of Talent Groups in the organization, such as key people, leadership, top performers, and high potentials. As you can see on the left side of the screen, Ronnie Patel is part of the talent group Leadership Talent. He is currently listed as a successor for the position of Vice President of HR & Finance with a readiness and ranking of green, meaning he could assume this role today.

Figure 7

A listing of configurable reports along with a detailed employee talent profile

Susan Billings

Susan Billings is the marketing manager at Nakisa ,Inc., and is responsible for lead generation, partner marketing, branding, and communications. A specialist in marketing communications, she has worked in the software industry for nearly a decade in both sales and marketing roles, giving her a holistic approach to software marketing.

You may contact the author at susan.billings@nakisa.com.

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