Transport for London
Integrated HR Shared Service Delivery
Shared Service delivery is becoming ever more high profile in the public sector as the government looks to achieve significant cost savings across the board. However, there is a lively debate across the wider public sector arena about the range of services that could, or should, be included within the shared services environment. Transport for London has recently reviewed its shared service for core administrative services such as HR and Finance, and this has prompted an overhaul of HR service delivery. The organisation has taken the bold step of creating a cross-organisational, full service HR implementation. This encompasses Learning and Development, People Management Advice and Resourcing as well as addressing the complex areas of payroll and reward, alongside standard administrative functions.
With the case management solution from Lagan playing a key role, HR Shared Services delivered savings across the organisation of around £1.9m in 2004/05, £0.4 million ahead of target, and subsequent savings of £8.1 million in its first full year of operation. TfL has also achieved a quantifiable improvement in the quality and timeliness of the HR service it delivers to its employees and the Lagan solution has enabled TfL to identify and implement HR best practice processes and procedures.
Complex Organisation
Every day 30 million journeys are taken in Greater London - by bus, tube, car and bicycle. The organisation responsible for overseeing this complex transport system is Transport for London (TfL). Created in 2000, the primary role of TfL - which, since 2003, has also included London Underground - is to implement the Mayor of London’s Transport Strategy and manage transport services across the Capital.
This remit includes London buses, the Underground, the Docklands Light Railway and the management of Croydon Tramlink and London River Services. TfL is also responsible for a 580km network of main roads and all of London’s 4,600 traffic lights. In addition, the organisation manages the central London Congestion Charging scheme and regulates the city’s taxis.
Bringing together so many wide ranging entities into one integrated body has been a significant achievement. While the organisation has managed rapidly to integrate the transport infrastructure, the 2003 McKinsey Report into TfL’s performance recommended that a move towards Shared Service was essential for TfL to achieve desired budget savings and merger efficiencies.
Michele Martin-Taylor, Head of HR Services, TfL, confirms, “Each of the 19 businesses brought together to create TfL had its own HR resources. Not only were skills duplicated across the organisation but there was no standardisation of processes or working practices. The Shared Service model offered clear opportunities not only for economies of scale but opened up the door for the delivery of consistent and enhanced HR services across TfL that would benefit our employees in terms of the service they receive, as well as the organisation through the identification and implementation of HR best practice.”
Shared Service
TfL’s first challenge was to determine the scope of the Shared Service. The McKinsey Report had identified around 400 people performing roles that could be pulled together into one Shared Service centre. Following extensive review, TfL extended this to over 500 employees undertaking multiple HR roles.
Michele Martin-Taylor explains, “The creation of the HR Shared Service centre was not just about achieving economy of skills. TfL also wanted to integrate processes to bring a degree of standardisation and best practice to the diverse organisational cultures.” However, while standardisation was key to ensure consistency and quality, TfL was keen to enable constituent operations to retain working practices where appropriate. “The objective was to deliver a service truly designed around the needs of our employees - our HR customers. We wanted to achieve synergy and a common platform while allowing a degree of business individuality,” she says.
Key to achieving that objective was the choice of a front-end platform that would integrate with existing SAP HR software to enable Shared Service delivery. Not only did the solution need to be flexible enough to support the important differences in working practices that would remain within the different TfL organisations but it also needed to be easy to change and adapt once in place.
She explains, “This is an evolving environment. To maximise the benefits of both the investment and Shared Service concept, TfL wanted to ensure that HR processes could continue to be automated and changed post implementation without requiring external programming expertise.”
Shared Skills
In addition to achieving financial savings, TfL also wanted to deliver a better HR service to both managers and employees. “By creating a standardised delivery platform TfL could, for the first time, ensure a more consistent service based on best practice,” she says. “In addition, with good business intelligence, TfL could gain significant understanding into the costs associated with components of HR service across the organisation, monitor Key Performance Indicators against Service Level Agreements, and spot trends in important areas such as absence, grievance and discipline.”
Following the extensive public sector review process and a full market assessment of available vendor solutions, TfL opted for a solution from Lagan. In addition to offering the ease of use and ability to make changes to scripts or processes internally, the Lagan solution included an integrated knowledge management system. This provides a central repository of information on processes, procedures and policies for both managers and employees with easy to use natural language search capabilities.
Michele says, “Critically, the Lagan solution, working with our other systems, provides a platform that has enabled TfL to deliver a full range of HR services, including People Management Advice, Resourcing and Employee Services. This ‘full service’ capability has been the key to helping us achieve the benefits that we have. In every instance - from someone coming back from maternity leave to a disciplinary issue - the workflow tracks cases and raises an alert if action is required. The level of automation and scripting enables the ‘customer’ contact team to solve 80% of issues at first call, only more complex questions are now referred to one of the specialist teams.”
Quantifiable Value
The Lagan system went live in January 2005, and is used by 250 TfL HR staff to service the organisation’s 19,000 employees - an extremely efficient ratio given the full range of HR services included within the Shared Service centre. With a centralised information source, including all scanned correspondence and a record of every ‘customer’ interaction, any authorised team member can work on a case, ensuring no delays occur due to HR staff absence and maximising the efficiency of the HR team.
Furthermore the use of Lagan’s eForms, which integrate directly with SAP, are transforming the company’s insight into the key issues of overtime, absence and lateness. TfL’s managers can now log on to the intranet and fill out an eForm to report absence, for example. The link with SAP ensures automatic data population of the eForm, significantly reducing the time taken. For TfL, with each absence linked to one of 700 sickness codes, the organisation has, for the first time, an integrated record of its employees’ health and welfare.
These forms also automatically raise a case within Lagan should, for example, an individual’s absence becomes protracted, ensuring the People Management Advice team undertake further investigation.
In addition to creating an annual cost saving of £8.1 million through overhead efficiencies, more than repaying the initial £7 million investment within a year, the
integrated platform and management information is enabling TfL’s HR services to introduce more focused training and education policies, such as manager induction training. Michele confirms, “The standardised platform enabled by Lagan is providing TfL with the efficiencies and processes that are key to delivering improved HR Services. The goal is to manage the health and well being of TfL employees; HR can only deliver effective, targeted policies if there is a clear view of HR requirements across the organisation. With the Lagan solution, that insight is now available.”
She concludes, “This is TfL’s first comprehensive, cross-organisation Shared Service. Without a doubt, the decision to go for a full service rather than just an
administrative Shared Service was key. Not only has the company gained significant efficiencies from creating one team, but by facilitating the sharing of skills andknowledge the overall level of skill within HR has increased which can only further improve the overall quality of HR services we deliver to our employees.”
