HR in the Fast Lane at Progressive Insurance

1. HR in the Fast Lane at Progressive Insurance

2. About Progressive • Fourth largest writer of private passenger auto insurance in the US • Approximately 20,000 employees • First auto insurer to sell insurance via the Internet • Progressive leads the industry with innovative Internet offerings

3. Presentation Overview • Where We Are • How We Got Here • Where We’re Headed • Questions and Answers

4. Where We Are

5. Current Environment • Centralized call centers, field claims offices • Applications accessed via LAN, WAN, and dial-up connections • Robust corporate intranet • Centralized HR call support in the HR Service Center (HRSC) • In production with PeopleSoft HRMS 7.51

6. HR Self Service at Progressive • HR self service intranet site includes: • Printable HR forms • Links to HR content sites (compensation, travel services, policy manual) • Transactional applications • Life event and manager checklists • Most transactions must be done through self service

7. Job Requisitions Manage Candidates/New Hire Employee Requests Terminate Employees Employee Bonuses Salary/Job Changes Group Increases Performance Reviews Supervisor Changes Training Registration Skills Tracking Drill Down Delegation Manager Checklists Manager Self Service Applications

8. Manager Self Service Site

9. Terminate Employment

10. Terminate Employment

11. Termination Checklist

12. Job Opportunity List Transfer Requests Work Experience Education and Background Internal Resume Employment Application Online Paycheck Personal Data/ Emergency Contact Federal W4 Direct Deposit New Hire Orientation Benefits Enrollment Training Registration Life Event Changes Employee Self Service Applications

13. Job Opportunity Listing

14. Apply for Jobs

15. Internal Resume

16. Self Service Usage

17. How We Got Here

18. HR Strategic Direction • Support growth • Simplify HR processes • Y2k compliance • Intranet based self service • Reduce transaction costs • Reduce calls to HRSC • Eliminate paper

19. Progressive HR Systems • Mainframe based self service • Benefits Enrollment & Training Registration - Early 1990’s • Time entry - 1996 • Lotus Notes based salary changes - 1996 • HRSC created in 1996 • Converted from legacy HR/Payroll system to PeopleSoft HRMS in 1998

20. Business Case for Self Service • Identified the following benefits: • Reduction in mainframe support costs • Reduction in advertising expense, agency fees • Reduction in mailing costs, overpayments • Reduction in cycle time • Savings in recruiter, HRSC, training administrator, manager, and employee time

21. Business Case for Self Service • Identified the following costs: • Hardware • Software • Licensing • Programming • Ongoing support

22. Application Definition • Researched HR best practices • Consulted internally with all areas of HR • Identified 40 applications and analyzed importance and complexity • Started small to minimize risk and cost • Also reviewed business needs and ROI to determine deployment schedule

23. Team Structure • Started with small dedicated project team • Functional project manager and I/T technical manager • Two functional and three technical resources • Increased size of team in 2000 • Multiple areas participate in production • Used consulting when appropriate

24. Tools Selection • Factors considered: • Company standards • Ongoing support • Upgrades • Cost • Development tools include HTML, PeopleTools Web Client and Message Agent and Microsoft Active Server Pages

25. Development Challenges • Newness of technology made estimating work difficult • Network performance/bandwidth • Applications must work with various hardware and software • Display resolution settings

26. Development Strategy • Iterative development process most effective • Creation of prototypes and usability testing critical • Considered the following for all changes: • Usability • Performance • Cost/benefit of modifications

27. Usability Testing • Critical step in designing applications for casual users • Users walk through scenarios and observers record/analyze their experiences • Consistent test results • Site organization very important • Users often ignore instructions • Simple labeling most effective

28. Deployment Strategy • Rollout organization in phases • Begin with pilots • Minimize performance hit • Pull back if necessary • Support multiple processes • Allow infrastructure to catch up • Minimize negative impact • HR role in communication/training

29. Rollout Schedule • April, 1999 - Initial ESS and MSS • April, 1999 - PeopleSoft upgrade • April, 2000 - Internal Recruiting • September, 2000 - External Recruiting, New Hire and Terminations • November, 2000 - New Hire Benefits, Annual Enrollment and Training Registration • September, 2001 - On Line Pay Advices • December, 2001 - Group Salary Increases

30. Return on Investment • Total projected five year return at net present value is $5.6 million • Initial applications projected to reduce transactions costs from $14.23 to $6.23 • Changes in hire process are expected to yield savings of $75 per hire • Processors in the HRSC reduced by 65% despite 60% growth in headcount

31. Keys to Success • Management support • Minimizing development costs • Flexibility, iterative development process and usability testing • Building the necessary infrastructure • Streamlining processes

32. Ongoing Challenges • Measurement of results • User reactions are often subjective • New technology is always more attractive • Continued support of new processes • Changes in functionality visible to entire organization

33. Where We’re Headed

34. Upgrade • Conducted comprehensive functional fit/gap analysis for self service applications in 2001 • Decision was made to wait for next release • Functional fit/gap results: • Much of ESS functionality is delivered • Most of MSS functionality is not delivered • Recruiting functionality is increased but business processes are significantly different

35. Upgrade Strategy • Committed to use delivered self-service where possible • I/T currently estimating hours to reapply customizations • Effort will be significant • Degree of fit determines upgrade approach • Where fit is high, apply customizations to base pages • Where fit is low, maintain custom pages

36. Key Learnings • HRMS software changes impact self-service regardless of tool • Self service processes are still new and not clearly defined • Manager functions are more specific to each company/industry • Custom development of self service may require maintaining customizations

37. Upcoming Projects • PeopleSoft upgrade • Intranet based time entry and management • Web Reporting for Managers • Personalized content integrated with transactions • Deploy HR self service over the Internet

38. Questions and Answers