TransAlta Corporation Achieves Greater than 100 Percent ROI Implementing Human Resources Solution from SAP

TransAlta Reports Large Cost Savings and Improved Operational Efficiencies from Implementing mySAP™ Human Resources

WALLDORF, GermanySAP AG (NYSE: SAP) today announced a new independent case study that reports significant financial return on investment (ROI) as a result of implementing mySAP™ Human Resources (mySAP HR) for integrated human capital management. The case study was based on Gartner Consulting’s ROI methodology* which evaluated the mySAP HR implementation at TransAlta Corporation (NYSE: TAC), a prominent utilities company based in Alberta, Canada.

The findings indicate that TransAlta achieved a return on investment of 102 percent with a payback period of 59 months, with 10-year savings of CAD$31 million. The results demonstrate how the mySAP HR solution has the ability to help customers meet business objectives through improved operational speed, streamlined enterprise-wide collaboration and people management, and higher employee efficiency and productivity.

“The results of the TransAlta case study proves that by tightly integrating employee productivity with strategic business processes through mySAP HR, companies achieve increased employee loyalty, efficiency, and revenue,” said Deborah Schmidt, global vice president, Human Capital Management, SAP AG. “Only SAP delivers truly integrated employee-related business tools, optimizing investments in employees and aligning processes with business goals to generate real business results.”

Research Methodology
The ROI calculations used in the study took a 10-year useful-life period into consideration. In order to calculate ROI, Gartner Consulting’s methodology was used to evaluate explicit cost-savings or revenue-enhancing benefits associated with related business processes from time management to organizational management. Qualitative data was examined to extract the overarching non-quantitative benefits achieved through mySAP HR. Quantitative data was then analyzed for cost and revenue changes realized after the introduction of mySAP HR.

“Two drivers are leading to a more insightful method to measure the value of HR investments: the increased importance of HR’s alignment with strategic business value; and the need to make technology decisions that provide a justified return on investment. Enterprises need a structured approach to diagnose the real technology value and business process impact experienced by the enterprise,” said Jim Holincheck, Gartner Research Director.

TransAlta Corporation
TransAlta Corporation, Canada’s largest electric generation company, first implemented SAP in 1996 and then expanded the implementation in 2001 to include strategic activities that enhance the long-term brand image of the firm. The company implemented mySAP HR to help realize its near-term strategic goal of maintaining low-cost generation plants in the commodity-based utilities market and its long-term strategic goal of aligning employee activities to support a brand image grounded in economic, environmental, and social sustainability. mySAP HR enabled TransAlta to refocus its HR efforts on adding strategic value, including hiring and retaining quality personnel, as well as enhancing its long-term brand initiative through an emphasis on human capital management. Historically, TransAlta’s HR department focused on highly manual paper-based transactional tasks that required substantial human interaction.

TransAlta chose mySAP HR as an enabling tool to reduce transactional HR activities and decrease operational costs. By reducing the many manual tasks within the HR and payroll functions, TransAlta has reduced operational costs and also freed up its HR staff to focus on high-level strategic activities, such as recruiting and retaining key employees. The second phase of the implementation included the employee self-service (ESS) and manager self-service (MSS) capabilities of mySAP HR, which drew costs out of the human resources organization and enabled employees and managers to improve time management, training and event planning, and salary planning.

The most significant savings and the largest contributor to the overall ROI was within the salary-planning business process. The driving forces for these significant cost savings were the increased accuracy in reporting data and reductions in cycle time, which lead to the reallocation of HR staff. The automation of salary planning via manager self-service has reduced the total cycle of the salary planning process time by 85 total person days. Cycle-time reduction was measured by the ability to relinquish manually intensive tasks from the human resources department’s objectives.

In addition to the quantifiable benefits realized after the introduction of mySAP HR, TransAlta was able to refocus its HR efforts on adding strategic value. These projects focused on hiring and retaining quality personnel. Since the introduction of mySAP HR, TransAlta has been able to hire and retain many of the noteworthy forward thinkers within the electricity-generating industry. This strategic focus on human capital visionaries is the backbone of what TransAlta believes is a necessary step in developing a long﷓term brand initiative based on economic, environmental, and social sustainability.

“SAP has allowed HR to shift from traditional activities to more strategic partnerships within the organization,” said Mike Williams, senior vice president of human resources, TransAlta. “mySAP HR provides better information to our leaders which allows them to focus on planning, forecasting and managing our human capital aligned with our business needs.”

TransAlta is planning to further extend its SAP implementation by adding the e-recruiting and performance management capabilities of mySAP HR and by leveraging the data warehousing and management capabilities of SAP® Business Information Warehouse, a component of the SAP NetWeaver application and integration platform that gives companies comprehensive business insight and analysis.

SAP provides the best-suited software for helping customers win the global talent war, follow regulatory and legal requirements, and address special language needs. With more than 8,000 mySAP HR customers in over 50 countries, SAP is the global leader in the human resources market today. For more information on mySAP Human Resources, please visit http://www.sap.com/company/press/factsheets/solution/hr_sept.asp.

* The case studies are based on an ROI methodology researched and designed by Gartner. Gartner’s methodology and its use by SAP should not be deemed to be an endorsement of any SAP product or service, data, or sales technique. Gartner expressly disclaims all warranties, expressed or implied, of the fitness of its methodology for a particular purpose. Gartner does not endorse the findings of this case study, and the model results may vary from published Gartner research.

About SAP
SAP is the world’s leading provider of business software solutions. Through mySAP™ Business Suite, people in businesses around the globe are improving relationships with customers and partners, streamlining operations, and achieving significant efficiencies throughout their supply chains. The unique core processes of various industries, from Aerospace to Utilities, are supported effectively by SAP’s 23 industry solutions. Today, more than 19,600 companies in over 120 countries run more than 62,000 installations of SAP® software. With subsidiaries in over 50 countries, the company is listed on several exchanges including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at http://www.sap.com)

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