1. Leadership Map for
High performing
Companies
Sudhakar Rao
Director, SAP India

2. SAP ERP HCM – Thoroughly Proven
SAP – World Market Leader in Enterprise
Software
31 years business experience
25 industry solutions
Worldwide ecosystem
SAP HCM
#1 Market Leader
20 year commitment to HCM
Over 20,000 HR customers worldwide
Over 500+ India HR custoemrs
Over 54 Million Employees supported with SAP HR
Over 11 million ESS users
© SAP 2007

3. Today - Organization challenges
Global economy (Monkey on the back – CHINA)
Economic Downturn, Cash Flow
Increasing focus on innovation and growth
Quality combined with mass production
Faster ROI demands (high quality assets)
Drive performance and improve efficiency
Higher costs of attraction and retention
A unique set of business challenges requires a new
way of managing the workforce and its talent

4. Human Capital Challenges for the future
Based on SHRM 2007 study of global HR executives, priorities are listed below:
1. Succession Planning
2. Recruiting and Selecting Talented Employees (HIPO/HIPE – Top 2-3%)
3. Engaging and Retaining Talented Employees
4. Providing Leaders with Skills to be Successful
5. Rising benefits Costs
6. Creating/Maintaining a Performance-based Culture
*Source: McKinsey “Making Talent a Strategic Priority”, Jan’2008

5. Are You Ready to Move-the-Needle?
What-if analysis aligned with growth strategy
(Simulation of current and future strategy)
Company
Low High
12.2%
Employee1 Cost %
ABX 19.1% 0.8% XYZ
of Revenue
0.50
Opr. Income per
XYZ 0.09 1.52 ABC
Employee (Rs. Cr)
153.79
Production per
ABX 100.93 4,191.88 XYZ
Employee (tons)
13.5%
Prod. per Emp.
BAD -7.3% 16.3% ABC
Growth Y-o-Y, FY – 08
• This conversation leads to focus on core competency improvement areas.
• People Strategy

6. Significant Opportunity for Further Value
Addition Exists
Function Potential for Value
Creation Through
IT/Best Practices
Enablement
Drive HR Strategy and Leadership
Effectiveness -M&A Execution
-Talent Management
-Consolidated IT Platform
-Global Shared Services/ Workflows
Strategic/
Decision Support
“Innovate”
Compensation/ Benefits Planning
Performance Management
Expertise Workforce Planning
Based Activities
“Grow Business” Recruitment and Staffing
Training and Development
Compensation/ Benefits Administration
Personnel Data Management
Drive
Efficiency Transactional
Payroll Administration
Activities
“Maintain Status-Quo” Time and Attendance Recording
Self-services and Work-flows
High Potential of Value Creation through IT Sufficient Potential of Value Creation through IT High IT Maturity – Value Creation Potential in Selected Areas

7. How SAP is supporting?
Automate
Manpower
Planning Improve
Create Skills
Training/
Inventory
Development
Consistent
Automate
Performance
Transactions
Management
Better Integrated
Reporting/ HR IT
Analytics Landscape
Note 1 - Source: Based on SAP interviews with Tata Steel HR function owners and key process leads

8. Example: Create Skills Inventory
Map skills inventory for each
position and employee
Assign training programs
and development plan
using Talent Review.
Monitor progress
Visibility of key talent
demand and supply
needs
Define and assign
job-rotations within / Global internal talent
outside domains pool
using training
module. Identify
mentors in system
Insight into global workforce = ability to tap into employee potential = leadership
continuity and alignment with key business objectives

9. Example: End-to-End Talent Management
Connect Employee Performance Management, Succession Planning and
Employee Management to maximize workforce potential.
Head of HR
Line of Business Manager Line of Business Manager CLO, LoB Mgr & Employees
Employee Performance
Succession Planning Employee Development
Management
Conduct Participate in
LOB Enter Self- Appraisal Maintain classroom &
Book Training
Assessment Feedback Talent Profiles e-learning
Employees Discussion training
Review Appraise Conduct
LOB Identify Conduct Approve Monitor
Objectives Performance Appraisal Recommend
Potential Talent Review Booking learning
and & Assess EE’s Feedback Trainings
Line Manager Successors Meeting Activities progress
Achievements Potential Discussion
Define Training
HR Start Central Create Talent Identify
Calibrate Identify Key Opportunities
Appraisal Review Potential for Top
HR Specialist/HR Appraisals Position
Process Meeting Successors Performers
Business Partner
Create, Manage
HR or Training Integrate & Publish
External Training Catalog
Training and Development
Training Administrator Planning

10. Implications of Higher Investment in Strategic HR
Cross Industry Analysis
HR Cost as % Sales - 29%
Operating Income/
Employee + 74%
16% 10%
Strategy/
Leadership
Talent Management/
Expertise Based 48%
60%
Support
Transactional 36%
Business Support 30%
Average Company Top Performer
Source: ASUG/ SAP benchmarking

11. How Do Companies with Leading HR
Practices Differentiate Themselves?
Leading companies assess training effectiveness in line with overall corporate goals and link compensation planning
to performance management
Best Practice: Automated training effectiveness
assessment by correlating corporate KPIs to training
results
44 Evaluation of training
Training Hours per
83%+ needs during
Employee
24 performance appraisal
helps increase training
effectiveness by 4 times
Peer Group World Class
Best Practice: Automated compensation plan impact
analysis and reporting
Automated
34% compensation
Employee Cost
adjustments based on
(% of Op. Ex)
56%-
15% performance ratings lead
to 35% lower employee
cost overhead and 85%
Legend:
lower churn rate
Peer Group World Class
Avg. Company
World-class/ Leading Company
Note 1 - Source: Based on statistical analysis of best practice adoption levels and KPI performance for over than 250 participants in the SAP ASUG (America SAP User Group)
Human Capital Management benchmarking initiative. Participants range across diverse industry verticals with varying employee numbers

12. How Do Companies with Leading HR
Practices Differentiate Themselves?
Best Practice: Web-based tool to record time & Higher employee engagement levels leads to more
attendance with automated reporting productivity (revenue earned per employee)
Revenue per Employee
Avg. Admin. Costs for
T&E Recording per
0.61
Employee (US$)
61
53%-
(US$ million)
29
91%-
0.32
Peer Group World Class Low High
Engagement Engagement
Best Practice: Balance Score-card based employee goal
alignment with org. strategy
Organizations that
Turn-over Rate (%)
14% 36%-
9% support personalized
and effective learning
experience a 65%
reduction in turnover rate
Peer Group World Class
Legend:
Avg. Company
World-class/ Leading Company
Note 1 - Source: Based on statistical analysis of best practice adoption levels and KPI performance for over than 250 participants in the SAP ASUG (America SAP User Group)
Human Capital Management benchmarking initiative. Participants range across diverse industry verticals with varying employee numbers

13. Shared Services Drives Value
Net Cost Savings % Effectiveness Improvement %
STAGES OF MATURITY
32%
23%
15% 14%
8%
5%
1% 0.5%
No Shared Service Emerging Established Leaders
TYPICAL PROFILE
Fragmented Centralized Automated Transactions Highly Automated
Varying Processes Mostly Standard Processes Consistent Service Levels Highly Integrated
Varying Service Levels Efficiency Metrics System Consolidation
Comprehensive Metrics
Governance
Source: ASUG/SAP 2006 Shared Services Study

14. SAP is Investing in Driving Next-
Generation HCM Capabilities
Focus Area Business Value
Workforce Closed loop execution on
1 Planning and
Analytics
Modeling and simulation
of workforce needs
Business Reason
people strategy
Talent Ensuring future leaders are
2 Management
The right people in the
right roles when needed
identified, developed, and
ready
Service
3 Delivery
Efficient delivery of HR
services
Increased quality of HR
Services at lower TCO
Scheduling and
4 Deployment
Optimizing workforce
utilization
Workforce efficiency and
productivity
Collaboration & Enabling structured and
5 Learning unstructured knowledge sharing
A more connected and
educated workforce

15. Thank you!
© SAP Summit 08 / Page 15