« Securing the Benefits of HR Projects» for a NOC

1. « Securing the Benefits of HR Projects» for a NOC Situation & Challenge Approach / Solution Outcome An African National Oil Company wanted realign its portfolio of HR projects with new business priorities Many corporate HR initiatives were late in delivering outcomes of little or no value for lacking the appropriate structure and focus Important HR processes were no longer functioning for being stuck in an endless redefinition journey (e.g. career management) Loss of project management credibility of the corporate HR was threatening its capacity to define and implement much needed new corporate policies and systems (SAP HR) Business and HR stakeholders as well as project teams were interviewed to assess on going initiatives along 3 dimensions: - business priority and value of expected outcomes;- cultural fit, contribution to HR strategy, and organizational readiness; - ability of project team to deliver the expected results. The portfolio of HR projects was simplified and realigned with business and HR priorities. A PMO was created to implement and support much needed project management and change management techniques The number of corporate HR initiatives has been reduced by a factor of 60% Plethoric work groups struggling to implement new HR policies and processes have been replaced by three compact task forces that rolled out most critical policies and processes in 3 months New projects are launched after a review of their business alignment, expected outcomes, affordability and sustainability. Assignment of project managers and key resources has become a disciplined process that promote focus and accountability

2. We started from a review of all on going HR projects to uncover real priorities and secure short term benefits Secure Benefits Realization Assess Projects Status & Identify Quick Wins • Examine projects’ status and stakeholders’ expectations • Identify quick wins opportunities and propose adjustment to project plans • Identify candidates to strengthen the Project Leadership teams for 2005 • Speed-up value delivery for projects retained as priorities by achieving quick-wins, revisiting project plans, and adjusting staffing • Set a Program Management Office to monitor project progress, insure benefits realization and adjust resources to need/priorities

3. Short term priorities were identified through a thorough data collection, focus interviews and brainstorming with the various business and HR executives 1 2 Sonangol Priorities 3 4

4. RESULT DELIVERY PHASE Sonangol HR VP expectation was to secure short term benefits while developing result oriented project coordinators capable to work across organizational silos • Full-time project coordinators were assigned to the 3 higher priority projects. • Project coordinators started by 2 weeks of intense work to understand the diagnostic and redefine project charters to deliver simple and concrete results within a 3 to 4 months time box • Delivering results relied partly on HR process design and more critically on facilitation & change management activities: • PRH 2000 was struggling since early 2000, • Previous attempt to rollout an appraisal process failed miserably in 1996, • New SAP HR implementation was focusing on nice to have PD processes neglecting much needed PA processes and data • Developing skilled project coordinators was also a key objective for Sonangol. As a consequence, skill & methodology transfer from SBC was to be assessed/monitored as of a key outcome of each project. • Setting a PMO to facilitate transversal coordination, simplify decision making processes, monitor project progress/deliveries and spread good project management practices was also an important need

5. Desenhar a Base Inicial Comum dos Processos Corporativos Planear a Implementação Validar o Processo com um Ensaio de Implementação Implementar nas Sonair, Mercurye Sonaship Identificar, em cada subsidiária, os problemas que impedem o PRH Definir soluções e procedimentos de utilização do PRH Completar os enquadramentos e implementar o PRH no SAP Realizar a comunicação e o lançamento do PRH Completar o Blueprint para entrega no projecto SINCO Optimizar a Situação Actual dos Dados e Processos Desenvolver e Executar um Plano de Acções Correctivas Top priority projects charters were revisited to insure delivery of tangible results in 3 months The objective is to complete the rollout of PRH 2000 policies in all the subsidiaries of Sonangol and to communicate their content / benefits to all employees PRH 2000 The objective are to get reliable data for HR management and for the proper execution of basic HR processes, and to orient the new rollout on the resolution of current problems SAP RH The objective is to define a corporate baseline for the Performance Appraisal process in order to promote individual performance and development Perfor-mance Appraisal

6. RESULT DELIVERY PHASE Result orientation and skill transfers were enabled by the creation of joint teams SBC / Sonangol “Joint team” Work Organization • One consultant works with one Sonangol coordinator, creating a “joint team” • Each “Joint Team” has a project charter aimed at delivering simple and quick results • Skills transfer is part of the project charter • Each “Joint Team” fills a weekly progress report presented during a program meeting • The SBC consultant is responsible for maintaining focus and coaching his/her Sonangol partner through various project / change management situations Skill Transfer and Monitoring • Two types of skills were to be transferred: • Projects’ content-related knowledge: • SAP: blueprint, data audit, … • PRH 2000: classification, … • Performance Appraisal: processes,… • Project Management Methodologies: • Communication planning • Workshop facilitation • Interviewing • Issue analysis • Pert & Gantt,… • Every 2 weeks, Each SBC consultants assess the skills of his partner and re-assess the need for SBC support (after the first 2 months)

7. RESULT DELIVERY PHASE A “Colégio de RH” and a HR PMO were created to coordinate projects, speed-up decision making and simplify upward reporting across all subsidiaries HR Projects Governance New Project Management Practices • Every week, each team • Prepare a Project Report (ABCD) • Participate to the PMO meeting and present progress / issues • Learn and adopt new PMO tools & practices • Identify additional development plans • Every two weeks: • PMO executive dashboards is sent to all HR Directors • Every month: • HR Directors meet during the “Colégio de RH” where projects progresses are reported and important decisions are made/proposed • Board level communication are prepared during that meeting HR PMO will monitor HR projects and will re-use templates and tool from the PDO PCA Administrator PMO HR College (HR VP and Directors) PRH2000 Joint team Focal Points + Domain Experts SAP HR Joint team Subsidiaries Perf. Appraisal Joint team Technology Mastery* * The activities to be completed as planned will be monitored by the HR PMO

8. Appendix Client Confidential

9. Implementing PRH 2000 is the first step to adjust Human Resources policies to the new business environment July 2005 AQF RepositionTechnical Functions Reposition Managerial Functions MaintainAlignment toBusiness Needs 1 2 3 • AQF System • Catalogue of functionsno longer manageable • Increasing numberof functions (>400) • Confusion between functions & positions • Outdated salary grid • Limited career paths • Performance not recognized • PRH Framework • Simplified function classification (<150) • Salary bands by leveland by function • Career paths driven by performance • Governance rules to adjust functions/salaries based on business needs • Benefits • Adaptability to business conditions • Simplified cross-enterprises moves • Give employees longer term career perspective • Reward performance • Maintain employee motivations

10. Developing a culture of performance appraisal is required to develop human resources and achieve corporate objectives • Objectives • Develop the culture of giving and receiving feedback • Create motivation and improve individual performances • Feed career management • Involve managers in the development of employees • Give a corporate base thateach subsidiary will adapt 07/2005 01/2006 07/2005 01/2007 Technicians& Selected Employees Managers All Employees

11. Relative to SAP HR our priority is data cleansing to ensure that information becomes reliable for HR management and to support the execution of basic personal administration and payroll processes. This will prepare the transition to SINCO. • Focus on payroll and personal administration processes: • Data cleansing • PRH Implementation • Event based process manual • Creation of a SAP HR functional support group • Business requirements / follow-up of SINCO project