In one of Canada’s largest human resources outsourcing deals, CIBC has chosen EDS Canada to implement PeopleSoft Inc.’s PeopleSoft 8.0 Human Resources Management System (HRMS). This $227 million dollar, seven-year contract involves more than 40,000 employees from across the country and the replacement of two legacy systems.
According to Hugh MacDonald, vice-president of strategic alliance development, human resources division for CIBC in Toronto, it was these legacy systems that prompted the outsourcing agreement.
“As a result of reorganizing over time, we had 50,000 employees on two different HR systems. It was quite a legacy environment,” MacDonald said. “It was typical that a manager might have three employees on one system and five on another, and we had to manage salaries, bonuses, terminations, retirees, and new hires on two different systems. It wasn’t even just a question of two systems, but of two processes. Imagine the challenges.”
In 2000, CIBC set up a project to look at options and alternatives to improve the existing environment. They originally came up with a plan to have a single HRIS system to solve the problems, however, it was soon obvious that a strategy was needed to not only solve existing problems, but deal with other issues.
“We had to become more creative and solve the problem with more vision,” he said. “We began to think in terms of how to craft an HR strategy that would embrace more self service and work on multiple channels. We wanted something to deal with the needs of the company, its employees and its retirees.”
With this more strategic view, CIBC created a team that examined a number of alternatives and worked with a number of scenarios. After evaluating a number of options, the committee decided to opt for an outsourcing solution.
“It was very exciting for us and very risky,” MacDonald said. “At that time – the beginning of 2001 – there were few deals of this magnitude in existence.”
CIBC engaged in an RFP process, and of the respondents, EDS Canada won out.
“We put in a competitive bid, and CIBC knew that we could deliver in the long term,” said Mike Tustian, vice-president, business process management for EDS Canada in Toronto. “We also had a relationship with PeopleSoft and are users of the system that would be coming in. For PeopleSoft, they were dealing with two customers, and we could all communicate in a tri-party fashion.”
MacDonald explained why CIBC decided to use PeopleSoft 8.0.
“Having done an analysis of our HR systems, PeopleSoft 8.0 best met our needs,” he said. “We’re a large, multinational financial institution with multiple currencies and many systems to link to. We were interested in the self-service environment that their product provides, and all things considered PeopleSoft was the best choice.”
John Bodolai, vice-president of financial services for PeopleSoft Canada, explained that CIBC had been using PeopleSoft products before the RFP was ever issued.
“CIBC is a long-standing customer of ours and we have a clear vision of the bank,” he said. “HR is not its core competency, and they need to manage what’s important to their core competency, so at the end of the day, outsourcing made sense.”
The PeopleSoft 8.0 HRMS application suite is a pure Internet solution, that allows CIBC’s employees to perform such self-service tasks as adding a dependent to their health insurance policy, changing payroll deductions and enrolling in benefits programs.
“The pure Internet architecture opens up possibilities for CIBC,” Bodolai said. “It will help the bank expand its reach and save money in deployment costs.”
Like any undertaking of this magnitude in its infancy, its key players are optimistic about the outcome.
“One always hopes that these deals will go well,” MacDonald said. “There are always inevitable issues and conflict when there’s growth, but EDS has a great track record with retaining staff, and has grown on the basis of transition staff. They’re made up largely of people who came there as a result of a deal like this, so they understand needs, concerns and anxieties of our employees and help them deal with it.”