528

Part Four  Building and Managing Systems

Hitachi Consulting Moves Human Resources

H
itachi Consulting Corporation is an interna- legacy HR system needed to be replaced. One top
tional management and technology consulting priority was to improve business processes for tal-
firm headquartered in Dallas, Texas and a sub- ent acquisition and development so that Hitachi
sidiary of Hitachi Ltd. based in Tokyo, Japan. Hitachi Consulting could find the right people better, faster,
Consulting currently employs approximately 6,500 and cheaper. In the past, Hitachi Consulting waited
people in 22 countries, including the United States, until a new position opened before actively recruit-
Japan, Brazil, China, India, Portugal, Singapore, ing new talent. Its new HR function sought to cul-
Spain, the UK, Germany, and Vietnam. Because the tivate relationships with top candidates, fueled by
company provides consulting services, its employees employee referrals and social networks. Through
are its most important resource. To succeed competi- ongoing dialogues, the HR staff could identify star
tively, Hitachi Consulting must ensure that it has the talent and quickly hire these people when the time
right number of employees with the right skills and was right. Hitachi hoped that the new HR system
expertise wherever and whenever the need for its would reduce recruiting costs, improve candidate
consulting services arise. The human resources func- experience, engagement, and retention, and expand
tion is especially important in a company of this sort. recognition of Hitachi as an employer of choice.
Four years ago, Hitachi Consulting decided to Another high priority was having a single system
grow its business model to include turnkey and of record as the authoritative source of information
custom solutions combining business best practices for all of HCC’s regions with a central repository for
and leading-edge technologies such as the Internet HR data. With an enterprise-wide cloud application,
of Things (IoT) as well as traditional consulting HR and IT managers could centrally assign autho-
­services. Hitachi is doing this across many areas—rail rizations for data access based on roles and respon-
and transportation, energy, water, cities, healthcare, sibilities, while also enforcing global security and
and public safety. A key success factor is to collabo- regulatory policies. HCC’s workforce regularly works
rate with partners, clients and other stakeholders at client sites and requires access to enterprise data
across entire industries. These new offerings require and applications from tablets and smartphones, so
people with appropriate talents and skills to deliver the new solution needed to provide mobile access
Hitachi Consulting’s new solution portfolio. The as well, which was not possible with HCC’s legacy
company had to recast its Human Resources depart- systems. Other goals included expanded analytics
ment to operate more strategically so that it would and reporting capabilities, and a global platform to
have the right human resources in place to do the streamline compensation, benefits, and absence
work. management.
Hitachi Consulting was saddled with multiple dis- A steering committee composed of HR, business,
parate local human resources systems (and in some and IT leadership evaluated various technology
cases just spreadsheets) that held its valuable em- options, selecting Oracle HCM Cloud for the solu-
ployee data. These systems were not integrated with tion. Oracle HCM Cloud is a cloud-based system for
the company’s legacy Human Resources system in Human Capital Management (HCM), providing a sin-
the United States. There was no way to easily obtain gle global human resources solution to maintain em-
an enterprise-wide view of the company’s workforce. ployee records, align common HR processes, attract,
When a senior executive requested such company- develop and retain top talent, improve employee
wide data for decision making, HR staff had to manu- productivity, control labor costs, and address simple
ally assemble and aggregate the necessary data. The and complex employee compensation needs. There
process would take days. Dealing with such complex are capabilities for recruiting candidates, managing
manual processes and siloed data prevented the com- performance, developing careers, providing learning,
pany from operating under a “single source of truth.” performing talent reviews, and planning successions.
For the company to move forward, its Human Hitachi Consulting was growing quickly, and the
Resources function had to be transformed and its flexibility of cloud computing was helpful when
 Chapter 13  Building Information Systems 529

it had to quickly absorb large numbers of employ- the HR modernization project also had to perform
ees from a new acquisition. At one point, Hitachi their usual duties. Project leaders devised a time-
Consulting had less than two weeks to bring hun- sharing plan that pulled individuals into the mod-
dreds of new employees into its legacy HR system. ernization project when their expertise was most
With the old system, it was a challenge to ensure the needed, but quickly returned them to their regular
company had sufficient hardware and software re- jobs to keep HCC’s business on track.
sources to accommodate the new employees without Implementation of the Oracle Human Capital
overspending for additional infrastructure, or just as Management Cloud to serve Hitachi Consulting’s
risky, keeping a lid on infrastructure expenditures so entire global workforce has provided many benefits
that the system couldn’t handle future growth. With for Hitachi Consulting. It has reduced the time and
a cloud platform, Hitachi Consulting could simply cost to hire new employees and improved top tal-
bring the new employees into the HR application ent identification, development, and retention. The
and adjust its contract with Oracle to accommodate employee referral process used to falter because staff
the additional head count. Switching computing to members questioned whether their suggestions were
a cloud software service provider also would relieve actually implemented. With the new system, the re-
Hitachi Consulting’s IT staff from routine data center ferring party is more clearly identified and tagged for
maintenance tasks, leaving more time for strategic eventual rewards if the referral leads to a successful
business initiatives, such as creating reports and new hire. HCC’s referral rate of new talent from cur-
analyses for decision-makers. rent employees has increased from 17 to 35 percent.
Oracle HCM Cloud met all these requirements, The company was able to save $1 million in the first
and it also featured a streamlined modern interface year the system was operational by reducing pay-
that would make the system much easier for em- ments to search firms. It has become easier to absorb
ployees to use than the antiquated interface of HCC’s and integrate employees from acquisitions.
legacy system. The Oracle cloud platform’s flexibility HCC senior executives and regional managers can
also appealed to the steering committee. With many now access workforce information when making de-
cloud services, customers must adapt their processes cisions about HCC’s new business direction. For ex-
to the services’ requirements. Oracle HCM Cloud of- ample, HCC’s senior executives recently asked HCC
fers standard processes, but it also lets organizations director of service delivery Matt Revell for the com-
customize processes when necessary. pany’s employee head count and turnover trends
The HCC team steering committee also found that over the last 12 months to evaluate the investments
Oracle HCM Cloud offered tight security and regula- managers were making for people in HCC’s sales and
tory controls required to safeguard HR data, some of solutions organizations. To gather that information
which is highly sensitive. For years, many companies in the past, Revell’s staff had to request the data from
were reluctant to adopt cloud computing, concerned managers in each HCC region and then standardize
that outside service providers would not be able to the information. (This was because some defini-
safeguard sensitive data as effectively as systems tions, such as those for full-time employees versus
housed and managed on-site. Over time, cloud com- contingent staff, weren’t consistent.) Only then could
puting’s reputation for reliability and security has in- HCC’s U.S.-based analytics group aggregate the data
creased. More firms have decided that cloud security and run the final report. Oracle HCM Cloud has cen-
is on par with what they could do on premises. The tralized all of HCC’s HR information and uses a com-
HCC steering committee was convinced that Oracle mon enterprise-wide set of definitions. Reporting
is addressing the latest security threats and is doing and analytics work can be accomplished much faster
everything as well as or better than the company to and more accurately.
protect employee data. The new centralized system has also made the HR
Senior management approved the HR modern- department more efficient by replacing dozens of
ization plan in early 2014, with the new system separate processes that had been running in various
projected to go live in September 2015. The project regions with standardized practices, and enhancing
­leaders realized they would need to carefully manage the ability to strategically analyze employee data. For
the employee experience so staffers would ­become example, HCC routinely reassigns hundreds of indi-
comfortable with the changes created by the new viduals a year to posts outside their home countries
system. Both HR and IT staff directly involved with for customer engagements that require specialized
530 Part Four  Building and Managing Systems

skills. The new, streamlined global system greatly country and is investigating capabilities that enable
improved the global transfer process, and it also managers to request and approve bonus or salary in-
serves as the system of record that feeds employee creases via mobile devices.
data for many mission-critical downstream systems.
This has improved data integrity but also greatly im-
Sources: April Mazon, “Hitachi Consulting Realizes Significant
proved the global visibility of HCC’s workforce, facili- Value with HCM Cloud Transformation,” https://blogs.oracle.com,
tating strategic analysis of global employee data. accessed January 10, 2018; Alan Joch, “Disrupt Yourself,” Profit
HCC transformation experts teach clients that Magazine, Summer 2017; and www.hitachiconsulting.com, accessed
January 19, 2018.
fundamental change is an ongoing process, and that’s
a lesson the company’s HR and IT departments are CASE STUDY QUESTIONS
taking to heart. HCC leaders are now expanding their 13-14 Analyze Hitachi Consulting’s problems with
use of the compensation capabilities available within its legacy human resources system. What
Oracle HCM Cloud to more closely manage sales management, organization, and technology
force compensation. According to Sona Manzo, vice factors were responsible for these problems?
president of the Oracle HCM Cloud practice at HCC, What was the business impact of these
the company needed time to determine how it would problems?
be transforming its sales organization, so it kept sales 13-15 List and describe the major information re-
compensation as a separate initiative, quirements for Hitachi’s new HR system.
HCC is continuing to use new capabilities in 13-16 Was a cloud-based system appropriate for
Oracle HCM Cloud to help its business grow. The Hitachi Consulting? Why or why not?
new system has been able to handle complex bonus 13-17 What steps did Hitachi take to make sure its
packages tailored for salespeople in each country. new HR system was successful?
For example, “hot skill” bonuses are critical for at- 13-18 What were the benefits of the new HR sys-
tracting talent in Asia Pacific locations, but are not tem? How did it change operational activities
used in other regions such as the Americas. HCC will and decision making at Hitachi Consulting?
soon be able to track multiple bonus plans in each How successful was this system solution?

MyLab MIS
Go to the Assignments section of MyLab MIS to complete these writing exercises.
13-19 Describe four system conversion strategies.
13-20 Describe the role of end users in developing systems using the traditional systems life cycle, prototyp-
ing, application software packages, and end-user development.

Chapter 13 References
AppDynamics. “10 Things Your CIO Should Know about DevOps.” Chang, Young Bong, Vijay Gurbaxani, and Kiron Ravindran. “Infor-
www.appdynamics.com, accessed March 3, 2018. mation Technology Outsourcing: Asset Transfer and the Role
Aron, Ravi, Eric K. Clemons, and Sashi Reddi. “Just Right of Contract.” MIS Quarterly 41, No. 3 (September 2017).
­Outsourcing: Understanding and Managing Risk.” Journal of Comella-Dorda, Santiago, Swati Lohiya, and Gerard Speksnijder.
Management Information Systems 22, No. 1 (Summer 2005). “An Operating Model for Company-Wide Agile Development.”
Benaroch, Michael, Yossi Lichtenstein, and Lior Fink. “Contract McKinsey & Company (May 2016).
Design Choices and the Balance of Ex Ante and Ex Post Edberg, Dana T., Polina Ivanova, and William Kuechler. “Methodol-
Transaction Costs in Software Development Outsourcing.” ogy Mashups: An Exploration of Processes Used to Maintain
MIS Quarterly 40, No. 1 (March 2016). Software.” Journal of Management Information Systems 28, No.
Bossert, Oliver, Chris Ip, and Irina Starikova. “Beyond Agile: 4 (Spring 2012).
Reorganizing IT for Faster Software Delivery.” McKinsey & El Sawy, Omar A. Redesigning Enterprise Processes for E-Business.
Company (2015). McGraw-Hill (2001).