Collaborating to add business value – HR and finance in concert at Xerox

In today’s age of human capital, people are at the heart of businesses and key to competitive advantage. An inspiring case study session at the CIPD conference described how HR and finance were working together to share insights that improved business performance.

HR and finance at Xerox
When he first expressed the view that HR was at an inflection point and had a vital role to play in defining the direction of business, CIPD chief executive Peter Cheese, at the beginning of his tenure, called on delegates at the organisation's 2013 conference to work closely with other business disciplines to provide better measurement and insight in order to improve performance and outcomes.Two years after that keynote speech, Louise Fisher, human resources director of Xerox Europe, and Xavier Heiss, formerly chief financial officer of Xerox Europe and now based at Xerox's US headquarters, delivered an engaging and inspiring case study to around 140 delegates. It focused on how they were working together as HR and finance heads to add real value to the multinational business service and technology company.The case study pulled together some of the big HR themes and challenges around data analytics, leadership, collaboration and building commerciality, which leaders at September's Worldwide ERC conference in Boston debated with Re:locate's Fiona Murchie.

Setting the agenda

Setting the context for the case study, Xavier Heiss and Louise Fisher began by outlining six key trends driving cross-functional collaboration with HR.Referring first to a study from consultancy EY, the department heads drew on data that showed chief financial officers (CFOs) and chief human resources officers (CHROs) both giving much more energy to cross-functional cooperation than they had three years ago.The 2014 EY study Partnering for Performance – Part 2: The CFO and HR asked 550 CFOs and CHROs about the degree of collaboration in their business. Just over four in ten (42 per cent) said they had become "much more collaborative" in the past three years, with 38 per cent becoming "a little more collaborative."Xavier Heiss explained this by acknowledging the current priority of many CFOs of "trusting the numbers" and the role of data analytics in this – a trend, he pointed out, that was running in parallel with HR, as evidenced by the fact that more than half of the sessions at this year's conference focused on data and analytics.As in global mobility and HR, finance teams are required to pay even closer attention to 'getting their house in order', with compliance and regulatory frameworks making more of an impact across both functions – the third key influence in collaboration.The evolving business environment and decisions around where to allocate resources – both financial and human – is the fourth factor positively impacting collaboration. Closer analysis by investors of what companies are doing and how they are developing their strategy is the fifth. The final factor bringing finance and HR expertise together is how a company communicates, both with the external marketplace and internally.Drawing the strands together, and echoing Peter Cheese's belief that businesses have to move beyond just accounting to accountability, Louise Fisher summed up, "The lines are blurring. HR professionals have to be good with the numbers and understanding the business, and CFOs and COOs [chief operating officers] have to be good on the people side, too."

Securing the analytics mindset

The importance of having accurate and meaningful data – and the often-arduous journey to achieving that – was regularly reinforced across many of the conference sessions.Sounding a note of caution against the danger of producing too much data, Louise Fisher and Xavier Heiss advised that analytics must be relevant to addressing a key business issue. They must also be impactful (in that they would help you to change the odds of success), from the right perspective, and provide a prescription for action.In Xerox Europe's case, the business challenge was how to stay market leader in a declining and commoditising market, where people were a significant cost. In short, the company needed to know where to invest to stay ahead of the competition. Both HR and finance shared the challenge, and the solution needed good data from both domains in order for the business to take action.Recognising that serendipity played some part in overcoming the traditional metaphorical and literal distance between the two functions at Xerox, Ms Fisher and Mr Heiss said that the fast-changing, global nature of their business, and the need for accurate facts, also brought the two into conversation on a regular basis.As the HR and finance directors' offices were next to each other, rather than on separate floors or in different buildings, proximity helped to form the basis of their highly effective working relationship. The next critical step was towards finding a common language in which to talk about the issues."From the business perspective, what really got us working together more closely was a conversation about data and a mismatch in how we measured the cost of our people," explained Louise Fisher.With little consistent data on Xerox's employees, finance, HR and different business units perhaps reporting in different ways, and often only direct headcount reported, with no analysis or link to business needs, there was an opportunity for collaboration in order for the company better to assess the value added by its people.Aiming to break down the barriers between the functions, Xavier Heiss encouraged delegates to "sit down together and talk about the challenges". CFOs, he said, were waiting for colleagues to do this. In the spirit of this suggestion, he gave a brief overview of the accounting concepts of ROIC (return on invested capital) and WACC (weighted average cost of capital – the ratio of equity to the cost of debt).

Insights into action

Xerox recruited into the HR team a finance analyst responsible for human capital data, who had access to the HR and finance systems. The analyst first worked to clean up the data, to ensure it was consistent and of good enough quality, then worked with the business and finance heads to define what was needed, and coached country HR heads on how to report data.Through standard monthly reports shared with everyone, Xerox now has regular insights into issues like sales trends, as well as diversity and inclusion. "We are now using the data to provide good insights," says Louise Fisher. "It took two years to get to us to that point, so patience is advised."Xerox's patience and two-year iterative process have paid off. With its company motto "work can work better", the company is now benefiting from data-enabled insights into the cost of key people and average labour costs by role by country, which have enabled it to make investments where there are the greatest returns.HR's collaboration with finance is also leading to greater clarity about human capital costs in the business. It is using strategic workforce planning and predictive analysis to ensure the company is meeting clients' needs and efficient in its allocation of resources.Xerox's cooperative approach is further establishing itself with Xavier Heiss – now Xerox's vice-president of financial planning, analysis and global finance shared services – and Louise Fisher bringing each other's expertise in on other projects across the business.

Tips for success

From the financial perspective, Xavier Heiss advised HR leaders "not to be shy", and to go into the CFO's office and discuss the issues.Acknowledging that both HR and finance professionals were business people first, with HR and finance likely to be the only teams in the business that "see everything," Ms Fisher and Mr Heiss advocated an approach that saw the functions work together with trust and respect to resolve problems and challenge constructively.Offering practical tips to making this happen, developing and improving CHRO/CFO collaboration, and seeking to understand the priorities and challenges of each other's function, they underlined the importance of putting yourself in the shoes of your colleagues, speaking to each other every day, removing HR and finance jargon, and identifying and investing in good data – "what EY calls the one truth."
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