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May 26, 2009

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Christopher - Well said. Many of us who have been in the HRO field for a long time have been working toward this goal. We have more work to do.

Naomi - I agree with you. In most HR systems initiatives, whether part of an HRO model or a customer administrated solution, getting the data right is typically driven by the behavior of the data owner (the buyer). If the data owner wants to have a strategic HCM outcome they must plan for the required administrative data. If the buyer only holds the provider (HRO, SaaS, ERP, etc) accountable for administrative results then they should not expect data suitable for strategic HCM.

When you outsource the management of your administrative HRM data, you are also outsourcing the data foundations for strategic HRM (aka talent management). The great danger here, and it's all too common a problem, is that you don't consider the full data needs of strategic HRM when selecting and implementing an outsourced HRMS with the surrounding administrative HRM processes. You can get into just as much trouble on your own, with poorly selected,implemented and integrated on-premise or SaaS HRM applications, but HRO can exacerabate the inadequacy of talent management data foundations because the providers of administrative HRO are judged most often not on how well their service offerings support talent management but only on how well they deliver the within scope administrative HRM processes. And you don't get a seat at the table (or you're asked to leave the table) when you can't execute talent management processes, regardless of the technology used, because your administrative data foundations aren't sufficiently granular, properly modeled, semantically accurate, etc.

There is no question that if a company can offload its administrative burdens, it can focus on more strategic and growth opportunities. That is, if they reinvest the savings.

Unfortunately, with companies looking at outsourcing primarily (at least initially) as a cost and time saving initiative, management will count on those savings for investment elsewhere in the business or for dropping to the bottom line.

If outsourcers are successful in convincing companies to reinvest those savings into higher-level HR initiatives, then they will have accomplished a great thing. I am a firm believer that it can be done, but it is a lot of hard work....much harder than executing the outsourcing plan.

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