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A financial services company operating across 19 legal entities engaged binder|consulting to redesign their HR IT landscape following the end-of-maintenance announcement for their core legacy system. With a one-year grace period to migrate, the need for a future-proof architectural foundation, not just a replacement, was urgent.
- Financial Services
- Industry
- Industry
- 19
- Impacted Legal Entities
- ~ 2,000
- Number of Employees
- 4 month
- Project Duration
The Initial Situation
Our client’s HR organization was in the midst of a transformation when we began our joint project. The company had already begun to respond to the needs of a younger generation of executives by implementing new secondary HR systems (such as travel expense management).
However, this journey toward modernization was not without its setbacks. A previous attempt to future-proof the core HR IT landscape with one of the market-leading HCM platforms had to be abandoned due to unresolved requirements regarding payroll functionality. The project was halted midway, and the organization was forced to continue using the legacy system for all core HR processes. However, there was a significant problem: The vendor had already declared the end of the life cycle, and our client was now in the extended maintenance phase of the HRIS, with a one-year grace period to switch to a new system.
When we were asked for our support due to this situation, we found a young, dynamic team that had already begun to intensively engage with the selection of a new system. Our task in the first step was to analyze the current situation again from a neutral perspective and, on this basis, translate the desire for a new HRIS into a future-proof HR IT architecture with clear, executable next steps.
The Critical Challenge
As we started the analysis phase, the full complexity of the HR IT landscape became clear. Our client was running all HR processes through two core systems that were barely connected to each other: the legacy system that needed to be replaced, and an SAP R/3 environment that was largely maintained by the parent company. Supporting these two systems, were more than 15 additional systems that handled the HR department’s daily tasks. The result: a fragmented architecture that had been maintained through years of workarounds and a great deal of manual labor.
In addition to the operational risks, we identified further structural challenges during the analysis phase. The migration from on-premise SAP R/3 to SAP S/4HANA had not yet been initiated by the parent company. Furthermore, there was a risk of losing several key knowledge holders who were set to leave the company due to retirement plans.
Rather than merely implementing technical changes, the goal was to create a new foundation for HR that would enable the company to scale in the long term. The client did not want a “quick fix,” but rather a strategic perspective on the entire HR IT landscape. Our mandate: to design a future-proof HR IT architecture that serves as a single source of truth for all HR data. This involved eliminating duplicate data maintenance where possible, establishing a clear role based permission governance, and, where feasible, creating interfaces between systems for seamless data transfer. At the same time, it was essential to ensure that the parent company could continue to access the data in the R/3 system until the transition to S/4 could be initiated on their end.
How We Supported the Client
To find a tailored solution for our client, we began with a structured evaluation phase. We conducted several stakeholder interviews to ensure a holistic as-is analysis that went beyond purely technical components. In doing so, we sought to understand not only what each system was supposed to do across all business areas, but also how these systems were actually being used. Our goal was to identify the workarounds, the informal detours, and the actual pain points.
In addition to the interviews, we also conducted a technical analysis of the system landscape with the client. Using semi-standardized templates that were tailored in advance to the client’s specific situation, we documented all systems, interfaces, and recurring HR process groups. Through close coordination with the client, we analyzed the greatest areas for improvement and leverage points within the current landscape.
After establishing a clear picture of the current state of business, we developed three different options for the future direction of the HR IT architecture, applying proven best practices and our proprietary HR IT framework. This involved reviewing both best-of-suite and best-of-breed approaches and comparing them against a total of 14 evaluation criteria (e.g., complexity, ROI, implementation effort). Finally, based on our understanding of the client’s situation, we provided a clear recommendation for action, including a rough outline of a high-level roadmap.
The Impact Delivered
At the end of the project, we compiled all the findings we had gathered into a presentation. It was particularly important to shift the focus from “What do we need to replace?” to “How do we need to position ourselves as an HR organization to be future-ready?” In addition to clear recommendations for action, we also provided an overview of the necessary preparatory measures to be taken before implementing a new system.
This project highlighted several principles that generally apply to large-scale HR IT modernizations. Technical end-of-life situations can trigger strategic discussions that rarely take place during stable times; success lies in focusing on “architectural thinking” particularly in such situations. The most valuable insights consistently arose from understanding how people actually work, and not just from what systems are technically capable of.
