Case Studies

Keeping an Edge

Principal Financial Group sharpens global HR practices with Oracle.

By Marta Bright

August 2011

When it comes to financial security, everyone has a dream: making sound investments in a personal portfolio, ensuring a dependable retirement income, or securing the piece of mind that comes with the right insurance policy. But to realize that dream, individuals and businesses often need the right edge—the edge that comes from a trusted financial advisor.

Giving people that edge is what the Principal Financial Group (the Principal) does best, providing millions of customers around the world with a wide range of retirement solutions, insurance, wellness programs, and investment and banking products to meet their financial goals. The Principal’s commitment to giving people an edge doesn’t extend to customers alone: the Des Moines, Iowa–based financial services leader has consistently been recognized for excellent workforce management, winning numerous awards from the likes of Fortune Magazine, Computerworld, and Working Mother as one of the best places to work.

Maintaining that status as a leader in workforce excellence, coupled with rapid global expansion into countries such as China and Brazil, led executives at the Principal to look at new IT solutions to support the company’s increasingly diverse global workforce. From managing multiple currencies and compensation planning cycles across 15 countries to identifying and developing new leaders, the Principal needed IT systems that could meet the rigorous standards of this world-class Fortune 500 reputation. Enter Oracle Fusion Applications.

Oracle Fusion Applications
Principal Financial Group
Des Moines, Iowa

Financial services

US$9.16 billion in 2010


Oracle products and services: PeopleSoft human capital management, financial management, and supplier relationship management applications; Oracle Fusion Human Capital Management, including Oracle Fusion Workforce Compensation, Oracle Fusion Goal Management, Oracle Fusion Performance Management, Oracle Fusion Talent Review, and Oracle Fusion Workforce Lifecycle Manager; Oracle Database; Oracle Real Application Clusters
SOA-Powered Oracle Fusion Applications
In IT environments where multiple applications interact, it is critical to have stable, standards-based interfaces that promote the sharing of data. Service-oriented architectures (SOA) can do just that and Oracle Enterprise Repository is a powerful metadata tool that provides a single source of information for SOA assets and their dependencies.
Oracle Enterprise Repository provides a common communication channel for the automated exchange of metadata and service information. This is critical for Oracle Fusion Applications, which are built to take full advantage of SOA benefits.
“Oracle Fusion Applications expose the directory and catalog of services within Oracle Enterprise Repository, making them browsable and illuminating how processes are using a particular set of services, both within Oracle Fusion Applications and in coexistence with existing legacy applications,” says Nigel King, vice president of functional architecture for Oracle Fusion Applications.

“The Principal is in the employee benefits business, and as a result we are expected to have high-class, high-quality HR solutions for benefits, talent management, and so on,” explains Brian Ness, CIO of the corporate services group at the Principal. “Looking at our strategic HR plans, we realized we had a choice to make. We could build a custom solution, or we could go to the market and look for a solution. Components of Oracle Fusion Human Capital Management applications presented us an opportunity to deliver to market quickly and provided us with a strategic platform to move forward.”

With operations around the world, corporate HR management often has different deployment strategies for supporting employees in Brazil or Mexico than they do for China or Malaysia, so the enterprise technology that supports these efforts must give local business leaders the flexibility to address regional needs. “Each of our businesses is growing, and we’re preparing for additional growth, so we need to prepare our corporate services to handle this growth and prepare for better business agility,” notes Ness.

In this pursuit, Ness’ department faced a common IT challenge: how to manage heterogeneous information systems, integrate disparate systems through complex business processes, and continuously refine operations to stay competitive and realize the maximum return on IT investments. What he found was an uncommon solution: applications built to address differences among IT deployments that let business managers focus on business processes—and on realizing return on their technology investments. Oracle Fusion Applications, based on open standards, are designed to coexist, integrate with, and enhance applications across Oracle’s broad application portfolio, including Oracle E-Business Suite and Oracle’s PeopleSoft, JD Edwards, Siebel, and Hyperion product lines.

High-Energy HR

“Oracle Fusion Applications are much, much more than just the next release of Oracle E-Business Suite, PeopleSoft, Siebel, or Hyperion applications,” explains Gretchen Alarcon, vice president of human capital management applications strategy at Oracle. “Oracle Fusion Applications are a merger of the best functionality from all of those applications, incorporating the top thought leadership and business practices in the HCM [human capital management] marketplace. More importantly, Oracle Fusion Applications are all based on the same new standards-based technology platform.”

Oracle Fusion Applications deliver business services in private, public, and hybrid cloud deployments. And while all Oracle Fusion Applications are designed with business and business users in mind, one family in the Oracle Fusion Applications line—Oracle Fusion Human Capital Management—is focused on the business of every company’s greatest resource: its employees.

At the Principal, changing times required a change in HR IT strategy. According to Kathleen Souhrada, assistant vice president of human resources at the Principal, the company’s workforce is seeing a surge in international hiring on track with its global expansion. While that may be exciting (and good for business), it also presents some new challenges. “We have built our systems around a domestic population, and with this rapid global growth many of our global leaders were using disparate systems,” she says. “From an overall HR perspective, we really need to transition into a global operation.”

That led Ness and his team to take a closer look at a new IT solution for the HR department. Ness turned to Oracle Fusion Human Capital Management, and specifically to Oracle Fusion Workforce Compensation, Oracle Fusion Performance Management, Oracle Fusion Goal Management, and Oracle Fusion Talent Review—all part of the Oracle Fusion Human Capital Management family.

“We worked with our business units to understand their workforce needs. We then took the outputs of that information and laid out a roadmap for our systems implementations,” says Jay Fogarty, director of information technology at the Principal. “We worked with Oracle to do that, and we also looked at Oracle Fusion Applications and how that could fit well within our roadmap.”

Model Employees

The IT staff at the Principal chose Oracle Fusion Workforce Compensation as the foundation for the company’s global compensation management platform. Working with Oracle partner PwC, the Principal took only four months to establish a pilot Oracle Fusion Human Capital Management instance for selected global users to work with. The instance was set up in a secure and private Oracle cloud computing environment to manage data about the company’s employee population.

“Working with PwC and the Principal was outstanding,” says Ness. “We were able to achieve the target dates that we set out as well as most of the project goals.”

The implementation will provide advanced functionality to HR staff around the world: automated multicurrency support and a broader organizational view. Integrated workflow and flexible configuration capabilities also support the Principal’s international growth strategy.

But most importantly, Oracle Fusion Human Capital Management allows global HR leaders to perform in-depth, real-time compensation modeling and calibration. This drives an equitable pay-for-performance culture while providing greater line-of-sight information in the budgeting and distribution cycles of annual compensation planning. The multicurrency global employment capabilities allow leaders to manage compensation across the entire global workforce.

“Our current system was designed to handle compensation planning for domestic employees. We did not have the capability to model compensation for our international employees and the compensation planning for them,” says Fogarty. “So we were using different tools, like spreadsheets, in order to support those audiences.”

Peaceful Coexistence

The Principal IT staff manages other Oracle technology, so it was critical that the Oracle Fusion Human Capital Management pilot integrate with those existing systems. Oracle’s delivered and supported coexistence strategy for Oracle Fusion Applications made it possible for IT staff at the Principal to integrate an existing on-premises PeopleSoft HCM solution with the private-cloud Oracle Fusion Human Capital Management product without custom development or dual data maintenance.

The Principal’s Oracle relationship includes PeopleSoft applications for human resources, financials, and procurement, as well as security products and an Oracle Real Application Clusters database environment. The addition of Oracle Fusion Human Capital Management to the application ecosystem provided features and deployment options that matched the Principal’s business and technology needs.

“Oracle Fusion Human Capital Management offers the Principal a way to solve some key business challenges and also get some exciting new functionality,” says Ness. “The integration with our PeopleSoft Enterprise implementation was a key consideration in our decision to adopt Oracle Fusion Human Capital Management. The flexibility to use the Oracle cloud infrastructure to quickly implement Oracle Fusion Human Capital Management made our decision even easier.”

Closing the Time Gap

Successful management strategies and solutions translate well across different resources and processes. “At the Principal, we are very good financial managers,” says the Principal’s Souhrada. “We want to provide that same level of holistic management with our human capital as well. The Oracle Fusion Human Capital Management applications really provide the business intelligence that we need to connect the dots when it comes to talent so we can drive the bottom line by increasing our performance overall.”

In addition to compressing business process times, Oracle Fusion Applications continue to make a good impression on the Principal’s management.

“Our leaders appreciate Oracle Fusion Human Capital Management applications because they can see the work loading, they understand where it is going, and they have visibility across their organization,” Ness emphasizes. He adds that overall feedback from senior leadership has been very positive, with more than 80 percent of the team expressing their willingness to be an advocate for Oracle Fusion Applications.

In the second half of 2011, the Principal will begin rolling out Oracle Fusion Performance Management and Oracle Fusion Goal Management applications within the Oracle Fusion Human Capital Management family, and by the end of the year the company plans to further expand its use of Oracle Fusion Workforce Compensation. “The overall timing is still to be determined,” explains Ness, “but we’re also looking at deploying other Oracle Fusion talent management capabilities.”

Ness’ staff is also working on a pilot of Oracle Fusion Procurement, for greater control of the Principal’s supplier and procurement processes. With embedded analytics, unified workflow, and packaged adapters for PeopleSoft applications, the goal is to have both Oracle Fusion Procurement and Oracle Fusion Human Capital Management applications in the same environment. “A single instance of Oracle Fusion Human Capital Management and procurement applications allows us to make steps forward in managing that data consistently,” says Ness.

For the time being, the hybrid environment will remain the norm for the Principal, ensuring the company will be able to confirm that processes are working well between on-premises and cloud applications. Thanks to the flexibility of Oracle’s cloud computing model, over time Ness will have the ability to deploy future applications in ways that make the most sense for the Principal’s business. “Having no lockdown through on-premises enterprise applications means I can run them either multitenant, single tenant, or in a public or a private cloud environment,” he says.

For other companies on track to move to an Oracle Fusion Applications scenario, Ness suggests the following: “Do your homework, and plan your applications roadmap and a long-term strategy up front.” He also advocates for starting with specific modules to gain experience with Oracle Fusion Applications, and urges others to “focus on internal success and build on that by championing the Oracle Fusion Applications product and helping people become evangelists as you roll it out.”

For More Information

Oracle Fusion Human Capital Management

Photography by Shutterstock