Remember the days when women dragged their husbands through the stores on Saturdays because they wanted their opinion on a dress or a pair of shoes? Bored and annoyed, the men stood around in the store and spread bad vibes at best. Today, the fashion show takes place at home. Thanks to delivery services and the free returns slip, clothes and shoes are delivered to the living room and back to the supplier. There and back by barcode. IT makes it possible.
With the global growth of the industry, IT has become the central nervous system of logistics companies. Shipment tracking, delivery on the desired date, collection at the front door - it all works thanks to IT. Efficient IT has become a decisive competitive advantage for logistics companies. But how good are we compared to the competition? The HR interim manager was tasked with answering this question for one of the leading logistics groups. And to introduce demand-oriented personnel planning and HR controlling for the IT area, which should enable the management board to effectively manage the personnel in its area.
The client for the interim mandate employs more than a thousand employees in the IT area, both in IT and non-IT functions. These employees cover the entire "Plan", "Build" and "Run" spectrum. Project managers are primarily employed in the "Build" area: They manage the largely outsourced application development. In the annual planning process, the project managers act as business analysts, recording the requirements of the specialist departments for IT and translating them into requirements catalogs and specialist specifications. External application developers program the software solutions. After testing and commissioning, the "Run" department takes over the operation of the applications. The IT departments make their personnel requirements and cost plans based on the requirements of the specialist departments.
In consultation with the customer, the following procedure was chosen for the project:
- Review of the planning of the specialist departments in the past.
- Benchmark of the personnel costs of the "Build" and "Run" areas.
- Development and introduction of HR controlling.
Project planning adapted to actual requirements
Analysis of the planning for the last three years showed that the projects announced by the specialist departments at the start of the year were usually only half realized. The reason for this was that IT had also included projects in the planning that were on the specialist departments' wish list without having a budget for them. In addition, deregistered projects did not result in a correction of personnel requirements in the IT departments. And: the department heads were also rewarded for their bloated planning. In the annual reduction rounds, deregistered projects were booked as cost savings, which had a positive effect on the bonus. The more inflated the planning was at the beginning of the year, the greater the savings potential and therefore the bonus. A statistical forecast model was therefore developed in the project, which was based on past values and therefore enabled planning to be based on actual requirements.
Benchmarking to determine personnel requirements
In a quick benchmark, the HR interim manager determined key figures for calculating personnel requirements in the "Build" and "Run" areas through telephone interviews with experts from his network. At the client's request, they were validated in a benchmark by an external consulting firm. Based on the benchmark results, the interim manager developed a model for calculating the personnel requirements for the two areas. The model is calculated for a 5-year period. The analysis showed that there was a need for project managers in years 1 and 2 of the planning period, which would have had to be reduced again in year 3. The interim manager prepared analyses that showed that this requirement could be met more cost-effectively by external project managers. Fixed-term contracts were not feasible for the required profiles on the job market. The model was then mapped in the company's business intelligence system.
Hidden personnel reserves made transparent
In interviews with the heads of the specialist departments, it became clear that personnel planning was based on the method "We have a higher project volume, so I need more people". The status quo of the number of staff was not questioned. Nor was the complexity of the projects made plausible for the calculation. An analysis of the figures from the finance department also revealed that some IT departments had a hidden personnel reserve in the form of external project managers. However, these were not reported as personnel, but as application development costs. A specially created position in the IT department tracked the deployment of the external project managers. The interim manager corrected this allocation and converted the consultant costs into the number of project managers. This increased transparency for the management board and created free capacity in the controlling department. The interim manager also developed a model for calculating the need for external project managers. This allowed the IT department to save costs by using internal project managers while maintaining flexibility when fewer project managers were needed due to the discontinuation of projects.
Easy review of capacity utilization created
The assignment of external project managers was also properly mapped in HR controlling, which was developed by the interim manager. In monthly HR controlling reports, the figures for the individual departments are now shown separately for IT and non-IT functions and for internal and external personnel. Today, the productivity and capacity utilization of the individual departments can be compared with each other, as the expenses for external application development are compared with the actual costs for project management and operation. Key figures on absences, fluctuation and management spans provide an indication of the quality of management. A comparison with the month of the previous year and the cumulative period of the previous year shows starting points for optimization.
As a result, transparency with regard to the number of employees and personnel costs has been significantly increased for the Management Board. HR Controlling now provides the Executive Board with a tool for managing personnel costs.
