Canada was well represented at SAP’s annual Sapphire user conference in Orlando last month, with a number of the enterprise applications vendor’s Canadian clients sharing their SAP experiences.
Cost savings from implementing shared services across its organization enabled Royal Bank of Canada (RBC) to fund its human resources and information management operations.
An RBC executive told attendees how the bank was able to provide more than 70,000 employees in three different lines of business across North America with a single, common IT backbone to support its HR systems.
Chris Herrndorf, RBC’s director of HR services, said the strategy was to give employees and managers self-service and analytic capabilities, improve the speed and accuracy of transaction processing while driving down costs, and better harness HR data.
On the infrastructure side, RBC implemented SAP HR and SAP Business Warehouse — modules within SAP enterprise resource planning suite — SAP R/3.
The recent challenge for Herrndorf’s group came with RBC’s aggressive expansion into the U.S. Three major acquisitions brought 13,000 new employees to RBC. Each company had disparate systems and was migrated to RBC’s shared services platform and SAP infrastructure. Herrndorf said shared services reduced HR and IT costs by 50 per cent, so essentially those savings funded the infrastructure investments.
Herrndorf said a clear vision and strategy were key to the implementation’s success. RBC, he said, adopted a “business case” approach. This included demonstrating cost savings, spending a lot of time on project management and governance, hiring a seasoned project manager, getting strong executive sponsorship, and forging a tight partnership between HR operations and IT.
“We also sponsored a continual improvement mindset and there’s no question in my mind it became easier as we did subsequent implementations, because we applied learnings from the earlier ones,” Herrndorf said.
With shared services and the SAP platform in place, Herrndorf said RBC’s focus is now on building new applications and tools to leverage the Business Warehouse.
An e-learning management tool that replaced four legacy systems was rolled out in January and is expected to save US$4 million annually. Also introduced in January was “Total Rewards,” an online self-service application to give employees a real-time view of their pay and benefits. Both take advantage of RBC’s SAP infrastructure.
Businesses were not the only Canadian entities in the spotlight. The Federal Government was honoured by the Americas’ SAP Users Group (ASUG) for its implementation of SAP.
The Integrated Finance and Material System (IFMS) program office acts as the government’s research and development shop for SAP, developing standardized processes and rolling them out to different ministries across the government.
It was awarded ASUG’s 2006 Impact Award, which recognizes ASUG member companies that have achieved significant business results due to an SAP implementation.
Joe Larocque, the office’s senior director, said the government achieved at least $87 million in cost avoidance from 2002 to 2004 alone thanks to the standardization efforts. “Our ROI is really in cost avoidance, not in cost savings,” said Larocque. “It’s in how we can help departments avoid spending money.”
The government first began implementing SAP in 1997. Larocque said the ASUG award was, in large part, for the government’s upgrade project to version 4.7 of SAP’s platform.