Kirk Laughlin
When Keith Butterfield, Director Global HR Shared Services at Caterpillar, was told a few years ago that he would have to take a 100 person HR services center in the US and reconstitute it in Panama within a six month time frame, he knew he wouldn’t be sleeping much.
Panama has emerged as the new location of a HR shared services center, supporting Caterpillar employees throughout the Americas. (Other HR services locations are in India supporting Asia Pacific and Peterborough – outside of London – supporting the UK and Continental Europe.) Brazil and Costa Rica were also considered as potential destinations.
Key functions include pay reimbursements, recruiting support, common HR consulting and compensation and benefits management. Caterpillar runs PeopleSoft ERP across its shared services centers to maintain consistent processes.
Here are some highlights of what Butterfield says Caterpillar has learned:
- Re-engineered shared services functions in the home base of Aurora, Il.
- As part of location analysis, key factors were: skills, costs and business/ political climate.
- Landing in place like Panama was driven by awareness that Caterpillar would see continued growth as a corporation for product demand in emerging markets.
“Process execution is what it’s all about,” said Butterfield, emphasizing that both “process owners” and “delivery owners” share responsiblity in creating a dynamically aligned framework.
Butterfield said Deloitte was instrumental in keeping those two groups aligned.
“I wouldn’t recommend picking up and taking a service center and moving it in six month,” said Butterfield, noting that the company had to be extremely agile in anticipating the requirements to be up and running in such a short period.
Key takeaway: Be careful to not getting lost in a sea of data trying measuring the value of the HR shared services practice. Keep metrics simple with key topics like: people, velocity and costs.
Would be interested in knowing general labor cost differences between metropolitan US cities (e.g. Miami) and Panama City … i.e. 5x, 4x, 2x?
Primarily for shared service staff
Fast forward two years —– Cat HR Service now sucks big time! Employees from the US get less than stellar gramatical responses to e-mail questions (can't even get someone in the US any longer) – and most of the time, just plain blown off! Quality control over this "new" group is sadly lacking. Ya get what ya pay for! No doubt Cat is laughing all the way to the bank!