Medtronic has swapped its on-premise PeopleSoft HR software with Workday’s cloud-based tools, reducing licensing complexity and simplifying the management of its 45,000-strong global workforce.
The US manufacturing firm, which saw revenues of $16 billion (£9.6bn) last year, produces a range of medical devices from insulin pumps to pacemakers, and supports a workforce of over 43,000 across 55 countries. The majority of its staff (23,000) are in North America, with the rest across Asia, South America and Europe, including 3,500 in the UK and Ireland.
As its business outside the US has grown, Medtronic’s IT systems struggled to keep pace with changing staffing structures and processes within its organisation, particularly as it replaced its single manager for international HR with regional heads. According to Henrik Hansen, global head of HR IT at Medtronic, a lack of agility was largely due to difficulties updating its highly customised, 10-year old PeopleSoft implementation, which had become costly and cumbersone to upgrade.
“At some point we came to a fork in the road and the functionality and limitations of our technology started to hit a wall. This was because Medtronic went into more rapid change of business models as it attempted to accelerate globalisation and optimise innovation,” Hansen told ComputerworldUK.
“We had good benefits from the PeopleSoft system for the years we had it, but we had customised the heck out of it and so we couldn’t change one thing anymore without impacting the whole system.
“The system was at its end because we couldn’t manage those changes anymore. From a cost perspective you would be doing big upgrades and get no value.”
In 2011 Medtronic decided to replace PeopleSoft with Workday’s cloud tools, after considering similar systems including Oracle Fusion and SAP HR. Within 12 months Medtronic has completed the first phase migration of most functions within its PeopleSoft implementation – such as payroll, time-off, talent management and salary planning – for its entire workforce.
The introduction of the software as a service tools brought about a number of operational improvements, including increasing the “low uptake” of self service tools by staff on PeopleSoft. Hansen said that during January this year, Medtronic had 14,000 unique log-ins and 46,000 login sessions on its Workday systems.
The firm is also now able to provide senior staff with data on staffing levels across the its large, international workforce.
“In the past we were not able to track all of our contract workers and consultants. Now I know that in January we had an increase of 2.6 percent in this contingent labour force, so went up to 10,675 contingent workers – this is data that we never had before.”
Oracle licensing problems
Another benefit has been the simplification of licensing arrangements, which had become a sticking point with PeopleSoft owner Oracle. Although Medtronic had a global licence for PeopleSoft, Hansen said that the company incurred unexpected charges when rolling out features in new countries.
“It took me about nine months to implement the PeopleSoft [absence management] solution and I was seriously over budget. The people from Oracle told me that if I was to go to another country I have to pay more licences. So in every single country there are extra licences and sign up costs for their module, which then completely blew off my business case,” he said.
“Also at Oracle I had to pay for extra functionality. Here at Workday it is packaged and you can use it much faster.”
Big data pilot
Having completed the first phase of the Workday rollout, the second part will involve the optimisation of software features. Medtronic also plans to incorporate more features of the software as a service tool, including a planned trial of Workday’s big data analytics functions over the next 12 months.
For Medtronic’s HR department, big data could mean analysing millions of staff records to provide better career paths to aid the development of staff by placing them into roles that have historically led to quicker progression.
“One of the scenarios we are trying to build out with big data is ‘career-pathing’,” said Hansen. “We have seven million records of job history and career history that have been built up over the years. We want to start doing some analysis on that now.
“We could look at what a successful career path has been at Medtronic historically and start analysing this data. [This could highlight] certain paths that led to success, what those factors were, and how can we potentially start integrating this into our succession planning and talent planning review.”