Weathering the HR turbulence at Boeing

A
series of mergers left the Boeing Company with four payroll systems, multiple
HR organisations and three internal benefits systems. Keith Rodgers reports on
massive project to harmonise the company’s HR information management.

Tom
Peters, director of HR information technology at the Boeing Company, has had a
chaotic past five years.

Since
1996, three acquisitions have added 93,000 employees to the human resource
function he supports, presenting the organisation with a huge change management
headache.

From
every perspective different corporate cultures, incompatible information
technology infrastructures Boeing has been grappling with one of the biggest HR
challenges on record.

Look at the 1999 organisational map
of Boeing People Systems – the 300-strong information technology and business
process division that supports the group’s HR and payroll processes – and you
begin to wonder how the company ever made any decisions. Multiple lines of
managerial influence reflect the demands of numerous functions and interests,
typified in one chain where a senior director reports up through three separate
tiers, yet also answers directly to another function that manages the lot of
them.

The challenge facing Peters and his
team was to build processes that allowed decisions to be made as rapidly as
possible in this highly complex environment, but that also responded to
ever-changing corporate demands. "There are no such things as stable
requirements," he says. "We have to create them."

Today, the Boeing Company employs
198,000 people in six core businesses, ranging from commercial and military
aircraft to space and communications, supported by a shared services group.
Some 21,000 employees came on board in 1996 when Boeing bought the aerospace
business of Rockwell. A further 63,000 were added through the 1997 merger with
McDonnell Douglas, 9,000 more came from Hughes last year, and the company
continues to add smaller acquisitions to the mix.

The cultural heritages of the merged
companies could hardly have been more different, says Peters. One business took
a highly collaborative management approach, conferring in great detail over
major issues and taking its time to reach decisions. Another was more
hierarchical, making decisions rapidly, but sometimes forced to change tack
further down the line. A third effectively operated as a collection of
individual, autonomous companies.

The post-merger landscape was a
company with four payroll systems, multiple HR organisations, five external
benefits providers and three internal benefits systems. The company was stuck
with a range of duplicate software applications and inconsistent data
architectures, in which different definitions were used for the same object.
Websites proliferated from individual sites and businesses within the group,
duplicating information and making it hard for anyone to find answers. On top
of that, many of the security systems that managed user-access were
incompatible. "From a systems perspective, we have been living in constant
chaos," says Peters.

Not surprisingly, all this
complexity made it hard to reach agreement on fundamentals in BPS. Even
defining the organisation’s core business initiatives and drivers proved
difficult. "Everyone had different views of what the end state would look
like, yet no one defined it adequately," says Peters.

As a result, there were constant
issues in determining change and scope management, communication lines were
ineffective, and there was no clear understanding of the different roles and
relationships within the overall group – who was a user, a customer, an owner
or a sponsor.

Boeing’s response was to commit to
building a common HR systems platform to support all its major businesses. It
also developed a framework to streamline decision-making within the People
Systems group, in the process defining a blueprint for managing perpetual
change within large organisations.

The starting point was to define its
enterprise-wide HR remit, pledging to provide a single source for staff to
access services via the Internet or telephone, with one secure log-on
determined by the user’s access privileges. Its aim was to provide one image
for end-users, whether employees, former employees, retirees, families or
applicants.

In IT terms alone, the scale of that
task is daunting. For three years, BPS has been rolling out Peoplesoft’s HRMS
system to form the core of its payroll and HR operations and is still only
halfway through the implementation.

En route, it has to cater for
product upgrades, accommodate changing user-requirements, and maintain its
existing "legacy" systems until operations can be moved to the new
platform.

Meanwhile, elsewhere within the BPS
division, separate systems exist for timekeeping, Web self-service systems are
being implemented, and a data warehouse has been created as the repository for
group-wide HR content.

The challenges are just as great in
organisational structure. At an operational level, the company has developed a
classic change-management structure, controlled by an executive ownership board
comprising the VPs of finance, people and shared services. A change review
board controls budgets, manages planning and oversees product decisions
affecting the core IT infrastructure, with a brief to ensure that investments
generate the expected value.

But the key to the BPS model is not
just internal operations, but the communications paths it has established to
meet line-of-business requirements. Eighteen months into the project and struggling
to build an efficient model, BPS pulled in an internal audit group to help
define the way users interact with the systems team. What has emerged is a
flexible approval structure designed to streamline authorisation of lower-level
requirements, while ensuring that major change requests are investigated,
determined and costed properly. A somewhat grandly titled Customer Integrated
Business Requirements team, consisting of four people with backgrounds in HR or
HR systems, now meets weekly to review change recommendations made by business
units within the enterprise.

Alongside this is a nine-strong HRIS
Technology Council, which helps to co-ordinate business requirements, determine
whether individual requests for change have an enterprise-wide impact, and
decide which requirements make the most business sense to meet.

Peters’ strategy is not to control
every individual Web project or IT development. Rather, the People Systems
group wanted to define the rules by which individual businesses undertook their
own projects to ensure they are consistent and, where necessary, integrated. As
a result, change is now assessed at three levels. Smaller changes to planning
timescales or products go through a fast path and are generally self-authorised
"don’t ask for permission, ask for forgiveness", says Peters. Bigger
changes that have limited impact on the enterprise can also be authorised
rapidly, while complex changes are put through the CIBR and Technology Council.

What the process has achieved is to
allow the HR systems department to piece together multiple requirements and see
where individual projects have enterprise-wide implications. As such, it helps
co-ordinate projects in an environment that is both autonomous and
entrepreneurial.

Boeing offers its businesses a large
degree of control in areas such as salary planning. As long as they meet budget
requirements and can pass data to headquarters accurately, they can implement
whatever procedures they choose.

Through the Technology Council,
process changes demanded by one group can be assessed at an enterprise level
and effectively offered across the enterprise. If one group wants to change the
way it conducts its annual salary process, the council floats its ideas through
the rest of the organisation. In practice, that caters for a range of cultures
within the business units. Some departments are ready to jump in on projects
and go, but their more conservative peers may push for initiatives to be
handled enterprise-wide so that costs can be spread.

Peters acknowledges that the process
hasn’t always been smooth. "We’ve had some successes and some failures.
We’ve had a few cases where someone tried to get a request through and it just
got bogged down, and others that have gone through very fast."

Asked what ongoing challenges he
faces, he points to continued communications issues and, more generally,
"dealing with the chaos". But, philosophically, Peters is clear about
what the issues are: "We’ve provided a structure to allow requests to come
in and be heard. We are in the midst of creating stability by receiving change."

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