RBC says HR system overhaul will streamline future acquisitions

ORLANDO — The RBC Financial Group is the nation’s biggest bank, with a sizable IT department. But when it came to integrating three new U.S. acquisitions and two American-based departments to its corporate-wide human resources system, the institution found pre-planning was key.

“We spent a lot of time building processes and routines, and it really made the two years easy in terms of managing this project,” Chris Herndorf, the bank’s senior manager of HR services, said in a presentation at the SAP Sapphire conference here this week.

“We also fostered a continuous improvement mindset, which, no question in my mind, made it easier as we did the subsequent implementations because we applied the learnings from the early ones to the subsequent ones.”

The bank decided eight years ago to merge its disparate HR systems to SAP’s R/3 HRIS platform for the 70,000 employees it has in 31 countries, with the goal of creating a portal through which they can view and administer their human resource-related services.

Like many companies, it realized providing employees with self-serve tools can improve service to them as well as drive down the cost of performing transactions, such as registering for benefits.

By 2002 all employees were on the system, and by adding SAP’s business intelligence application “we had a fairly robust technology platform to build on,” Herndorf said. That was aided by a reorganization last year, which merged all of the institution’s IT groups.

Unfortunately, the bank is a growing corporation which, among other things, has targeted the United States as a country where it plans to grow rapidly. So it was in 2004, when RBC acquired three financial institutions. At the same time, there were two existing RBC divisions based in the U.S. which hadn’t been brought into the unified HR system.

The bank began a 30-month, $8-million program to merge the HR systems all five units with the bank’s.

Among the challenges, Herndorf said, was that the group’s didn’t know each other and there was some reluctance to adopt the bank’s enterprise-wide HR approach.

But Herndorf said it was able to prevail for a number of reasons. First, he said, “We had a clear strategy and a vision. We took a business case approach and demonstrated with could cut costs with this investment.” It was estimated IT costs from the U.S. divisions could be cut by $2.5 million a year, or half of what their existing information services and HR costs were.

The bank also hired a “very seasoned” project manager and retained IBM as an integration partner.

But he stressed they couldn’t work in isolation. “We had to engage people from the (U.S.) businesses because while we were taking an enterprise approach it was really important for them to localize it to their businesses. So engaging their communications and change management people was very important.”

SAP helped with customization problems and with testing for quality assurance and readiness when the projected neared the end.

In the end the project was finished on time and under budget, he said. He estimated the return on investment will be earned back in five years.

Meanwhile, the bank keeps on with acquisitions and reorganizations. But they don’t faze Herndorf. “While we’re challenged by these unexpected projects, we know we’re in a better position to support them and meet the needs of the business because we have such a strong technology platform in place.”

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Howard Solomon
Howard Solomon
Currently a freelance writer. Former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, Howard has written for several of ITWC's sister publications, including ITBusiness.ca. Before arriving at ITWC he served as a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times.

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