How Hearst Rebuilt Its Finance And HR Processes From The Studs Up

The iconic Hearst Tower in midtown Manhattan consists of 44 floors of gleaming triangular glass panels built atop the company’s original six-story, stone-façade 1920s headquarters. The building is an apt metaphor for Hearst Communications, which has grown from its foundation in newspapers and magazines such as the San Francisco Chronicle, Esquire, and Cosmopolitan to include ownership of or interests in more than 360 businesses.

Among its holdings are stakes in cable TV networks (ESPN, A&E, Lifetime) and 33 TV stations. In addition, Hearst owns a range of healthcare, transportation, and other digital service businesses, as well as global financial services leader Fitch Ratings. Those software and financial companies have driven tremendous growth for Hearst over the last five years.

Yet until a few years ago, the enterprise technology supporting the Hearst organization inside that modern tower was an old Infinium green-screen finance and payroll system.

The company had minimal HR system capabilities beyond what was required to run payroll. And to make up for the lack of capabilities in its legacy finance system, Hearst had added a range of point solutions, which made updating the highly customized on-premises applications even more complex.

It had gotten to the point that onboarding new acquisitions to Infinium was challenging—and most of Hearst’s acquisitions were fast-growing, tech-savvy companies that would balk at such an archaic system. For an acquisition-focused business, this status quo just wasn’t sustainable. It certainly wasn’t efficient.

In 2016, Hearst launched Project Unifi to bring consistency to processes across the company, integrate its HR and finance systems, and make onboarding new acquisitions faster and easier.

While there was a healthy debate at the time about whether SaaS applications were mature enough to support a company of Hearst’s size, scale, and complexity, there was also recognition that old habits die hard—and if the organization went with another on-premises system, it might again get behind on upgrades and end up with another outdated and customized system.

New Cloud Attitude

Integration was key, says Debra Robinson, who had held a range of IT leadership positions since joining Hearst in 2006 and was put in charge of the company’s HR and finance transformation. Now senior vice president and CIO of Oracle technology and operations at Hearst, she is responsible for all Oracle technology and applications across the company.

“We looked at Workday, SAP, and Oracle, and Oracle was the only one that had a true SaaS solution at that time and one that was integrated,” Robinson says. Another tenet of Hearst’s move to the cloud: no customizations.

“There were so many customizations with the old system—the problem was that the tech group never said no,” she says. “All of that technical debt made it hard to support. So no customizations was the #1 rule, and I was the keeper of the guiding principles for Project Unifi.”

Hearst’s US operations went live with Oracle Fusion Cloud Human Capital Management (HCM) and Oracle Taleo in October 2017, and then moved the recruiting function from Oracle Taleo Cloud to Oracle Talent Management, part of Oracle Cloud HCM, in August 2020. On the finance side, the company started with a pilot of Oracle Fusion Cloud Enterprise Resource Planning (ERP) in one of its television stations and the Hearst Service Center in July 2017. In January 2018, Hearst went live with 17 more legal entities on the finance side and then moved all of its US operations to Oracle Cloud ERP by March 2018.

Complete Rebuild

“The HCM implementation was actually easier because there was nothing to replace,” Robinson says. “And we wanted to get all of HCM up and running because of the integration with finance.”

In finance, the lack of standardization across business groups had resulted in a proliferation of charts of accounts, processes, and requirements, says David Hovstadius, Hearst senior vice president of finance operations.

Because of all these issues, he says, “we'd stopped doing upgrades, so it was almost like being frozen in time in terms of 1990s capabilities.”

Hovstadius equates the cloud ERP implementation with renovating a house—taking it all the way down to the studs before rebuilding.

“We leapfrogged from 1990s technology right over the phases of client-server and browser-based applications, as well as 25 years of business process evolution,” he says. “We tore everything down, impacting every single process around finance, then rebuilt it all and made sure everything worked.”

Employees are apt to resist such radical changes, even if they hate the old systems. To manage the impact of change, Hearst and partner Accenture mobilized a sizable change management and training team at Hearst’s headquarters. As the company continues to roll out additional HCM and ERP modules and implements updates and new capabilities released by Oracle each quarter, the focus on change management and adoption continues.

Simplify, Simplify, Simplify

One of the big changes Hearst made after the cloud HCM rollout was to reduce its more than 8,000 different job codes, under 15 levels, to 1,700 codes and 7 levels across the organization.

Because Hearst’s Oracle Cloud HCM and ERP systems are integrated with the company’s ADP payroll system, with consistent data definitions, company executives can now perform new kinds of data analysis, such as identifying employee costs by function, region, country, and other dimensions.

Another benefit is that Hearst can now post jobs across the organization, enabling employees companywide to easily apply for them. And when onboarding acquisitions—such as in early 2018, when Hearst bought Rodale, publisher of Men’s Health, Runner’s World, and Prevention magazines as well as book titles The South Beach Diet and An Inconvenient Truth—it can get new employees on the cloud applications quickly.

See the Business Clearly

In the Infinium green-screen days, many acquired companies stayed on their existing systems. The ever-growing number of isolated systems made it difficult to parse the company’s financial standing.

We can now look across the entire company and see the digital revenue versus traditional revenue as well as our services revenue, and we can break it down by geography, by business, by B2B versus B2C. There was no way we could have done that before.

What’s more, there were more than 15 charts of accounts—which classify and distinguish financial assets, liabilities, and transactions—as well as disparate processes to manage them. It was complex and manually intensive to consolidate results, and the finance team couldn’t drill down from those results to the transaction level to understand what was happening in each business.

Today, Hearst has a single chart of accounts.

“We can now look across the entire company and see the digital revenue versus traditional revenue as well as our services revenue, and we can break it down by geography, by business, by B2B versus B2C,” Hovstadius says. “There was no way we could have done that before.”

The finance team can also analyze common expenses across Hearst’s businesses and look for opportunities to manage spending by renegotiating contracts and/or reducing the number of vendors.

Robinson and her team also produce reports and dashboards for company leaders about the number of people joining and leaving the company and associated payroll data, running that information from ADP through Oracle Autonomous Data Warehouse. That’s a long way from just a few years ago, when Hearst’s only HR system was payroll and most of the timesheets were on paper, she says.

Looking ahead, Robinson and Hovstadius agree that what excites them most are opportunities to continue to improve Hearst’s processes and operations using automation and artificial intelligence. Says Hovstadius: “We have a continuous focus on how to do things better.”