People critical to Afrox as company modernises its HR

Afrox has innovatively re-structured its human resources function, aligning it to support the company's global line of business structure and ensuring it adds real value to line management.

The project forms part of parent company BOC's (British Oxygen) globalisation and growth process, which included redefining its regional businesses. Realising that new processes could not be sustained without fundamental transformation, inter-enterprise software player SAP was chosen to aid this transformation.

"Together with our counterparts in Europe, America and Australia, Afrox had to significantly reduce its cost base," says Greg Hart, manager of HR services at Afrox. "HR had to become aligned to the new, global line of business structure, and support the new global template. As an enabling function, it had to ensure that it added real value to line management.

"We also needed to ensure that the resulting HR function was an exciting place to be," says Hart. "On the downside, we had to reduce our HR headcount by 40 percent in South Africa. We also had to reduce HR costs by 30 percent."

Afrox found of its existing HR processes, only approximately 20 percent of HR resources were really adding value to the organisation and 80 percent of HR resources were bogged down in doing transactions.

"This really alarmed us," says Hart. "When tested against what line managers wanted, we were doing the opposite. To really begin to help them with their business strategy, we needed to invert the way we did business. We had to spend more time on value-added elements, and less on transactions."

As part of the process of defining a solution, HR managers from the BOC companies spoke to a number of leading global companies, include SAP.

"We were advised to examine our HR transactions, take note of new technologies and to re-define our processes by taking advantage of new thinking," says Hart. "We could then reinvest the savings achieved.

"We discovered many of our processes had been in place since "1922", and we were taking no cognisance of new technologies such as call centres, or applications such as SAP's enterprise solution or Microsoft Office - all of which streamline processes dramatically."

Afrox re-designed its HR structure into three discrete units, namely Strategy, Functional Excellence and Application and Maintenance. Each are differentiated, but integrated, and have their own set of outputs.

"We designed this structure before going out and looking for the technology to support it," says Hart. "We needed to understand what was needed from a business point of view, before we went out to buy the toolbox."

In the new structure, line managers and employees are empowered to help themselves, with the aid of an HR knowledge base. Where they cannot help themselves, they are fully supported by the HR call centre.

"We underwent a simple, but fascinating methodology to restructure our function, during which we examined technology, organisation, policy, procedure, information and culture," says Hart. "On the technology side, we decided to use SAP, e-mail and Intranet technology. We then re-organised so that the right person was in the right place doing the required work.

"We streamlined all our processes, often re-writing the rules and regulations, and for each process we ensured there was a policy and procedure. In the past, the car allowance procedures were cluttered with paperwork, for example. This process now uses simple e-mail forms, and the only people touching the data are the requester and the authoriser.

"For every process, each line manager now has access to the policy, and the procedures."

The SAP enterprise software implementation, by business partner CS Holdings, began in July 1999, and went live in March 2000, within budget.

"We tried to do minimal customisation to the system," says Hart. "If you modify it too much, support becomes an issue.

"Too many companies invest in SAP, which you can liken to a Ferrari, and then spend months trying to panel-beat it into the 1968 Cortina they were used to. We decided to let the Ferrari run."

Hart advises those interested in a SAP HR implementation not to go into this with a "payroll mindset". "The SAP payroll module is excellent, but it is only one small element," he says.