43 posts categorized "HR Strategy"

May 26, 2009

Talent Management vs. HRO – it’s not an “either or” proposition

If you've ever ventured into the brave world of HR Outsourcing (and you need to be brave...) the chances are you'll hear the views of Ceridian's Keith Strodtman.  Keith Strodtman

Keith has been a constant at the global $1.6 billion HR services and store-card solutions giant for many years now, and when he's not coaching his twin girls' fastpitch softball team (that's "rounders" for any Brits on here), he's been running Ceridian's global HRO practice.  He is also widely recognized as HRO's smoothest man, with a constant smile, never a raised word, and never a hair out of place. 

Keith has some excellent views on how companies can use third-party managed services to take on their administrative work and focus their HR executives on what they should be doing:  helping develop their organizations' talent.  Over you Keith...

I’m not sure about you, but I don’t get why some analysts and bloggers

Continue reading "Talent Management vs. HRO – it’s not an “either or” proposition" »

May 13, 2009

Wipro and Oracle partner to blow-up the BPO delivery model

Wipro-Oracle2Folks - I can exclusively reveal to you today that Wipro BPO and Oracle are shortly going to announce a partnership dubbed "simPlify", whereby Wipro will deliver PeopleSoft HR to both mid-market and high-end clients via a hosted utility BPO service, that will cater for 20 major countries.  They will also partner with The Hackett Group as part of the arrangement to provide performance benchmarks for HR processes.

The mid-market play is a true move towards "one-to-many", whereas the enterprise play will be a more customized approach.  Clients will need to invest

Continue reading "Wipro and Oracle partner to blow-up the BPO delivery model" »

Mar 07, 2009

HR outsourcing in this recession... why this makes sense for many global firms

While many firms are hunkering down tryng to ride out this turbulent year, we're also seeing an increasing number of multi-national companies use this time to develop business support infrastructures that can scale quickly with the needs of the business. It's not all about cost-reduction - it's about being nimble, and having a firmer handle on accessing critical data on your staff at a global level.   You can view the full post over at Think Global.

Jan 17, 2009

Are we demonstrating value?

Donovan McNabbWhen we talk about "change", we're not just talking about Washington or Detroit.  We also need to include OURSELVES.

The events of the past couple of months have given us all pause for thought with our careers and what we're going to be doing in a couple of years' (or weeks' / months') time. 

We had a great discussion a few months' back when we talked about the challenges of staying relevant in today's corporate climate, and this current economic shift is driving this need for relevance right down to all employees in the organization.  The "relevance" discussion now goes far deeper than roles and responsibilities, it goes right into demonstrable value-add, and the ability to impact revenue.  Whether you work in sales, operations, finance, marketing etc., you need to be able to tie what you do to your company's mission and revenue stream.

Bad recessions bring out different reactions from companies with their approaches to steadying the ship and readying themselves for sustained profitability.  These reactions nearly always result in staff reductions, reorganizations and aggressive means of reducing both variable and fixed costs.  Past recessions have resulted with most companies "snipping" costs without changing their business models, and several firms even kept hold of all their staff and rode out the downturn in anticipation of recovering much quicker and stronger than their competitors.  Most of the snipping was focused on low-performers.

This time is different.  Most companies - right now -  are snipping staff who do not directly impact their revenue, whether they be a low or high performer.  Staff who may be incredibly talented, but focus on activities that are peripheral to the company's core revenue-generation, are at risk in today's corporate environment. 

Employees at risk in today's corporate climate:

1) Staff working in new product lines which are yet to have matured, or are considered discretionary in this environment;

2) Staff in management roles that are largely administrative and have limited involvement in direct sales / client relationships;

3) Staff who are unpopular and considered to have a negative impact on revenue development;

4) Low-performers, which the company has wanted to shed for a while and now see the long cold winteras a chance to ease them off the payroll with limited reproach.

And if you are unlucky enough to get caught in the cross-fire, your next challenge is to understand why this happened.  Most likely, you were unlucky and need to find a new opportunity that aligns you with another firm's core revenue channel.  But if you dig really deep, you may have to concede that you need to develop your skills and knowledge to make yourself attractive to future employers, so you can directly impact their core businesses.  I believe we'll see many people seeking career changes in the coming year as they concede their current skills and experience are no longer as relevant as they once were. 

New growth and investment areas, such as health-care, renewable energy, new technology development, are going to be the lucky recipients of an influx of talent willing to retrain for long-term career security. Moreover, jobs in the public sector and education are now appearing far, far more attractive than they were a couple of years' ago.

All-in-all, we're moving into an environment where some industries will find their feet, others will decline and some may die altogether.  Many people will be refocusing their careers in new areas that they may not have envisaged in the recent past.  One thing is clear - we are in new era where people are going to have get used to change and learn to adapt themselves to new job roles, new routines... and new expectations.


 

Jan 13, 2009

The Horses spawns a partner: Think Global

AMR-ResearchAmigos - I'm excited to announce the launch of a sister-blog to Horses for Sources : here ariseth "Think Global", with focus on global delivery strategy, BPO, supply chain and IT services trends.  My firm, AMR Research (God bless 'em) has admirably tolerated the Horses for a long time now, until finally asking if I'll consider extending my verbosity to our research content, to which many of you do not gain access.  I've kicked this off with complimentary access to a new research article entitled "Beware of Myopic Cost Cutting: Use Outsourcing To Be More Competitive in This Economy".

I've always used the Horses platform as an outlet to knock around views, cultivate ideas and take the industry temperature.  So many of you have been part of that.  And, while we might not always have been 100% accurate, we've collectively generated so many gems of insight that I frequently read our commentary to add some color to what I am thinking - and I know many of you do the same. 

The power of the blogsphere is truly extending to the analyst world.  And while some of the other analyst firms have pushed their blog strategies for a while now, I am (for once) going to brag that none of them have come close to cracking the blogging code.  Over here we have, and it's time to take it mainstream.

Horses will not be going away, but will run in tandem with Think Global.  I hope you take a little time to pay a visit.

While you're there, please also check out the blogs from a couple of AMR's industry legends, Bruce Richardson and Kevin O'Marah.  I'll see you over there...

PF.

Jan 11, 2009

Executing effective HR in 2009: an interview with Jason Geller

Geller_Jason We've had the privilege of hearing from a host of industry leaders over the last couple of years (just look under the Outsourcing Heros category), and I'm delighted to present an interview with Deloitte's Jason Geller.  Jason has been instrumental in driving some of the largest and most complex global HR transformation initiatives over the last decade, and has gained a stellar reputation within the industry as one of HR's most prominent thought leaders and consultants.  I also had the privilege of working with Jason, and discovered he's quite a bashful chap who frequently shuns the spotlight in favor of his colleagues, so I thought I'd do something about that...

PF: Jason, in a nutshell, what do you see as the major challenges and opportunities facing HR executives today - and what measures do you recommend to address these?

JG: In these uncertain times, it is more important than ever to focus HR on activities that create business value. That means having a HR Strategy/Business Plan laser-focused on business value drivers:

  • Revenue Growth:  Business Transformation, Globalization, M&A, New Markets, Innovation  

  • Talent Strategies:  Workforce Planning, Learning & Development, Total Rewards, Mass Career, Customization, Global Mobility

  • Operational Effectiveness:  HR Policy, HR Service Delivery, HR Operations & Technology, Change and Culture, HR Analytics, Compliance

HR must deliver the HR services needed to support business strategy, such as revenue growth, talent and operational effectiveness. HR must make sure it is doing the right qqwork at the right level within the organization: By the right person; At the right location; By the right entity; Through the right delivery method; By the right HR role, which will lead to improved alignment with business goals.

Continue reading "Executing effective HR in 2009: an interview with Jason Geller" »

Dec 26, 2008

Emerging from the rubble of 2008: BPO has a breakthrough year

Much more fascinating than trying to predict what, on earth, is going to happen in global sourcing in 2009, is trying to make some sense of 2008's non-stop chain of events. Rubble2However, emerging from the rubble has been the maturing of the BPO industry, as several global service providers have striven to consolidate their market positions, anticipating further growth in BPO services in 2009.  The premise being that buyers are quickly becoming more accepting of radical change to their global business models that not only drives down operating costs, but also enhances their competitive position.  

How has BPO emerged as a vehicle to achieve these goals?

BPO matured as buyers took on a bottom-up approach to adoption.  For the first time, we have started to see BPO engagements being adopted in the right way.

Continue reading "Emerging from the rubble of 2008: BPO has a breakthrough year " »

Dec 21, 2008

Preparing for '09: It IS time to dump the term "Outsourcing"

You may recall the discussion we had earlier this year regarding whether it is time to stop using the term "Outsourcing".  The general consensus among many of you (including myself) was that we are stuck with the phrase and we shouldn't go out our way to dress-up global sourcing with other, more relevant, terminology:

"However you want to spin it, your staff will view it as outsourcing, and the more you try and disguise the taboo term, the more suspicious your staff will be that you are simply trying to ship them out for lower-cost labor"

With the dramatic changes in our corporate climate and political attitudes in recent months, I believe it's now time to change our well-worn phrase.  The core issues being:

1) Poor comprehension of global sourcing. Too many people associate "outsourcing" with greedy corporate leaders only interested in slashing costs, with little regard for employee livelihood. They have pre-conceived notions that organizations have forgotten about their people, and only care about the bottom-line.  I can assure anyone that is not the case with the majority of companies with whom I speak with daily. 

Continue reading "Preparing for '09: It IS time to dump the term "Outsourcing"" »

Dec 14, 2008

Horses outsourcing predictions for 2009

Ingsoc Yes, it's that time again folks, when analysts and other industry wannabe needle-movers come up with some profound verbiage that they think gets everyone excited for a few days, and hope no-one re-reads in 6 months.  Well... I occasionally do some research in my spare time, so here are some thoughts on what we can probably expect to see happen (just don't bookmark this page and hold it against me):

Low-hanging fruit outsourcing with immediate cost-savings will be strong.  As we discussed and surveyed here, it's areas where enterprises can streamline initial costs over a contract and get an immediate impact on the bottom-line.  That's bread-and-butter application outsourcing, high-arbitrage BPO areas such as F&A and vertical-specific analytics (that KPO stuff).  I am also expecting increased adoption of procurement BPO models as increased procurement and supply management work is moved offshore, and buyers can benefit from labor arbitrage to underpin the transformation costs that have held back adoption in the past. 

Continue reading "Horses outsourcing predictions for 2009" »

Dec 11, 2008

HRO is out of rehab

We've had many animated discussions in the past regarding the trials and tribulations of the HRO market. Britney SpearsTo cut to the chase, HRO has struggled to live up to expectations as clients struggled with poorly integrated service delivery, overly complex operational issues, the lack of common HR standards and common HR technology platforms. This often resulted in negligible cost savings and fractured service provider relationships.  Not to mention some significant write-downs by some of the providers who took on overly complex engagements.

However, new research I've been carrying out in recent weeks

Continue reading "HRO is out of rehab" »

Dec 08, 2008

Now the election is over... what about outsourcing?

Not many people are better-placed to debate the thorny issues of outsourcing and government policy than my old friend Glenn Davidson.  Glenn is synonyous in the public sector world with issues relating to human resources strategy and broader outsourcing strategy, having been one of the founding members behind Equaterra's public sector practice that was launched in 2005 and now a major part of their business.  Among several commercial roles, Glenn DavidsonGlenn previously served as one of Accenture's key executives behind their early forays HRO post their e-Peopleserve acquisition, and prior to that as a chief of staff and communications director to a Virginia governor, as the Commonwealth’s chief federal lobbyist and as a legislative director to an Ohio congressman.  

With so much heated discussion regarding the policies President-Elect Obama is going to deliver regarding the USA's future stance on offshore outsourcing and public sector contracting (which we touched upon here), I asked Glenn to put together some of his thoughts on where this will lead... over to you Mr D:

Continue reading "Now the election is over... what about outsourcing?" »

Dec 06, 2008

After the wake-up call: time to focus on our young talent

Wake-up-call As painful as this current economic climate is, we really need to start looking ahead to the positive changes that times like these can bring in the long-term when we recover. Recessions normally occur when many years of bad habits culminate, where certain things were progressing down the wrong track and, finally, the bottom fell out of the market and woke us all up. And, this time, the wake up call is a very loud one.

To correct our future, we need to focus on where our future is going to be molded - our young talent.

So how could this play out?

Continue reading "After the wake-up call: time to focus on our young talent" »

Nov 22, 2008

Investing in the right vehicles for change

This whole automotive situation is a microcosm of the broader issues facing the crumbling Western economies in this crisis market, and these issues require significant surgery to our very corporate DNA.  And outsourcing and globalization are right at the heart of the issues. 

Auto

Outsourcing provides an enabler for businesses to change, but ultimately we have to be put in a position where we have to change our corporate DNA and stop clinging to the inefficient ways of the past.  That time is now upon us and we need to embrace new ways of working, and new ways of doing this smarter.  And if it's fear that is driving us, some short-term panic, some short-term hardship, is a small price to pay to find new avenues of growth and value-creation further down the road.

And that doesn't mean businesses should go out and find outsourcing providers to save them a few dollars today, for the sake of making a quarterly target. 

Continue reading "Investing in the right vehicles for change" »

Nov 15, 2008

Getting the fundamentals right

Williams-Lowell We've had some serious - and sometimes passionate - discussions on "Horses" these last few weeks, and I laud so many of you for chiming in with your feelings and thoughts. 

We've examined the impact of our current predicament on the outsourcing industry, how globalized delivery has such a pivotal role to play in improving businesses' competitiveness, and even how struggling industries and faltering economies could embrace global delivery to create new jobs and industry.  It's proving to be a time for many of us in the outsourcing industry to reflect on how this business has developed over recent years, and why we must focus on helping enterprises compete more effectively at a global level, than simply stripping out short-term overhead.

To sum things up, my old friend Lowell Williams sent me his thoughts yesterday on the current economic situation. 

Continue reading "Getting the fundamentals right " »

Nov 08, 2008

The change imperative: it's back-to-basics time

PuppyEven though you are probably more interested in the breed of puppy Barack is going to buy his girls, I have had a chance to ponder the realities of the recession.

In a nutshell, we have reached a crucial juncture in our economic history:  gone are the days we can borrow whatever we want to subsidize ambitious business ideas, buy houses we cannot really afford, or fritter money away on expensive holidays. Walking down Boyslton Street at 7.30pm on Friday night - one of Boston's prime restaurant areas - every restaurant had vacant tables and was taking walk-ins.  It really hit home to me that things have finally changed.  Years of over-spending have finally caught up with us and we're now feeling the pinch.  But whether this was to be a rapid banking meltdown, or a long painful slowdown, this had to happen eventually. 

I recall sitting on a panel at at outsourcing conference in New York City back in 2004

Continue reading "The change imperative: it's back-to-basics time " »

Nov 02, 2008

Can flagging industries be replaced by BPO services?

British Coal-mine I had a distressing conversation regarding the future of the US automotive industry today with a guy from Detroit.  Their main concern these days is the widely-speculated acquisition of Chrysler by General Motors. 

The expectation is that if GM buys Chrysler, it will only retain the Jeep and Minivan businesses, close all the other Chrysler plants, and lay off 75% of Chrysler's engineering staff, for a direct loss of 90,000 jobs - not including ~6x more jobs at suppliers -  throughout North America. If no merger happens, one or more of the "Big 3" will go bankrupt, resulting in a total loss of all jobs - more than 120,000. One of his neighbors is putting his house on the market tomorrow, anticipating losing his job soon. Several other friends and neighbors expect to lose their jobs by the end of the year.
 
This reminds me of the situation in the UK in the 1980's when

Continue reading "Can flagging industries be replaced by BPO services?" »

Oct 28, 2008

Leading Change – the 15% Solution

The most dominant discussion thread I constantly have with clients today is about change management, and this is massively relevant in these times of rampant globalization, and this uncertain climate. 

Companies today simply cannot go out and hire teams of executives with deep outsourcing and offshoring experience - they are hard to find, expensive and often don't understand your specific business needs (horses for courses...). There simply is no defined curriculum for managing change.  Companies need their change leaders to lead from the front and bring out new qualities and skills from their existing people.  To this end, I am humbled to receive this guest article from one of the most respected practitioners in sourcing folklore...and certainly the finest to hail from Canada ;) 

In her recent past, Linda Tuck Chapman led the sourcing efforts at Fifth-Third Bank (as Chief Sourcing Officer), Scotiabank and BMO Financial Group and now runs her own boutique strategy firm called ONTALA Performance Solutions.  Linda also studied under the tutelage of my father-in-law during her MBA, and claims to have been a model student.  Anyway - over to you Linda to discuss executing a change strategy in this economy:

Continue reading "Leading Change – the 15% Solution" »

Oct 22, 2008

The challenges of moving to a global HR model

Julia Velixon at Mercer recently presented a new study conducted with the Harvard Business School, based on interviews with senior HR leaders from 60 global corporation, focused on the challenges of HR leaders moving from local to global roles within an global HR function.

Key findings from the study:

Julia_VelixonWorkforces are becoming more globally-dispersed.  The increased globalization of many of today's businesses, both in terms of their penetration into new international markets, in addition to their adoption of global sourcing models across IT and corporate support functions, is significantly increasing the need for global HR practices.  More than 50% of respondents' workforces reside outside of their corporate home country - the pressure to standardize policies and processes, manage increased workforce mobility and manage compliance needs is greater than ever. 

Many senior HR executives are stepping up into global roles, but are failing to divest of their localized issues.  45% of the executives have moved into global roles over the last two-to-three years

Continue reading "The challenges of moving to a global HR model" »

Oct 12, 2008

Dispatches from DC: Shift Happens

Here is the movie clip taken from my recent presentation "Creating a Strategic Enterprise Sourcing Strategy and Governing Change".  A special thanks to John Fisch for supplying some great content, and Mike Brown at AMR for mixing up the clip with this great soundtrack.  Enjoy.

 
And we did this before the Wall street shenanigans, just to add fuel to the fire...

Sep 19, 2008

Dispatches from DC: What's a mouse son?

MouseJason Averbrook on HR and technology:  the core theme is about how HR needs to reach outside of the organization to drive performance inside.  And technology and social networking tools arethe enabler to make this happen.  Here are some of the sound-bites:

"What we thought we were getting from technology is not what we have.  We outsourced benefits and payroll, so what are we left with - an address book, and IT tells us it'll cost a million dollars to upgrade!"

So why are people are unhappy with technology?

Continue reading "Dispatches from DC: What's a mouse son?" »

Sep 18, 2008

Dispatches from DC: going global with your HR function

Been listening to some excellent discussions at Mercer's client event, where the central theme is all about globalization.  Mercer's Jeff Miller and Julia Velixon discussed the results of their new study, conducted with the Harvard Business School, based on interviews with senior HR leaders from 60 global corporations.  Some key points of note:

  • Workforces are becoming more globally-dispersed.  More than 50% of respondents' workforces reside outside of their corporate home country - the pressure to standardize policies and processes, manage increased workforce mobility and manage compliance needs is greater than ever;
  • Many senior HR executives are stepping up into global roles, but are finding the transition challenging.  45% of the executives have moved into global roles over the last two-to-three years - many of these transitioned in the last year alone.  However, while roles are being structured globally, most of the executives have been struggling to get away from dealing with local and regional issues. 
  • Lack of standardization.  The lack of a consistent approach to governance and compliance, especially in Europe and Asia - where employment and tax laws vary widely in different jurisdictions - creates further challenges for HR leaders.  There is also a lack of standardization around the approach to global mobility, which hinder's HR's ability to apply consistent procedures to the compensation and benefits of a workforce that has been growing rapidly.  It is becoming increasingly important for companies to properly manage the logistics of moving there employees from country to country.

Food-for-thought...more to follow

Sep 17, 2008

Blogging on the road again...

Hitcher Washington D.C.this week:  I have the privilege of delivering a keynote address to Mercer's clients on the subject entitled "Creating a Strategic Enterprise Sourcing Strategy and Governing Change" (whatever will I think up next...).  I look forward to posting some banter from their conference, where the central theme is "Successfully Managing the Global Journey".  I am particularly interested to hear Jeff Miller and Juila Velixon discuss Mercer's recent study conducted with the Harvard Business School on global service delivery models.  I promise to share the findings here.  Am also looking forward to hearing Jason Averbrook (great blog by the way) attempting to tie together web 2.0, new HR technologies and outsourcing.  Big topics - I love it :)

San Francisco and New York next week: I am more excited than usual at the prospect of attending Oracle OpenWorld this year.  Both Oracle and SAP's signature events have fast taken-over as industry meets to anyone in the hi-tech and services businesses.  If you are there and want to meet up, drop me a mail.  What's exciting this year is the stage they are giving to BPO - come visit the panel discussion entitled the "The Good, The Bad and The Ugly", Moscone South, 307 at 5.30pm on Monday.  I'll be joined on the panel with my long-time industry cohorts Stan LePeak (Equaterra) and Mark Stelzner (Inflexion Advisors). I'll be spending the latter half of the week in Manhattan where I have brought together some of the leading minds in the BPO industry for a behind-closed-doors round-table (no vendors allowed...sorry).

London and India:  Am making plans to visit London and India later in November and December, so look forward to meeting up with many of you during my travels.

Aug 05, 2008

The Future Of HRM Service Delivery

I am honored to welcome one of my earliest - and long-time - mentors in the services and hi-tech advisory business to guest on Horses for Sources. It's taken me over a year to persuade her to showcase her insights here, so I guess now she has submitted me a piece is testament to the power of blogging, and the fact that it is fast-becoming a preferred medium for industry luminaries to opine their views to the industry-at-large. The fact that she felt she could be a little more "edgy" and freer to express her views here makes me feel like I am doing something useful for the outsourcing industry hosting this blog :)

Ladies and gentlemen, please welcome the honorable Naomi Bloom and her take on the future of Human Resources Management service delivery. Naomi has over four-decades of experience in HR delivery and technology in a number of advisory roles and is widely-regarded as the pre-emeninent authority in HR platform delivery. Over to you, Mrs Bloom:

Continue reading "The Future Of HRM Service Delivery " »

Jul 24, 2008

The challenge of staying relevant in today's corporate climate

Mark Stelzner recently posted some interesting statistics on the plummeting average tenure of C-suite executives:

  • CEO: A 2007 Harvard Law School study shows that a “manager CEO” of a S&P 500 firm averages 5.5 years of tenure.  Crist Associates’ 2007 Volatility Report also shows the majority of CEOs with less than 5 years of service.
  • CFOSpencer Stuart has CFO tenure at 4.3 years - and falling (Crist at 5 for all CFOs).
  • COO: Chief Operating Officer tenure is shrinking to just under 3 years, with the total number of Fortune and S&P 500 COOs diminishing at a perilous rate.  
  • CIO: According to the 2008 State of the CIO poll results, a Chief Information Officer’s average time in seat is about 4.4 years, down from 5.1 years in the prior period.
  • CMO: Spencer Stuart’s annual study shows Chief Marketing Officers at a mere 26.8 months, which is actually up from 23.2 months in the prior year.
  • CHRO:  Workforce Magazine’s analysis putting an average CHRO in their seat for approximately 3.1 years.  

    These stats got me thinking more about how organizations today are rethinking their organizational strategy in a challenging economy where talent management is ever-critical to the business, and non-core functions are becoming increasingly subjected to lower-cost outsourcing solutions.  So why are C-suite tenures all getting shorter? 

  • Continue reading "The challenge of staying relevant in today's corporate climate" »

    Jul 22, 2008

    Preparing the new organization for life after outsourcing

    I wanted to share an article from last year that discusses how enterprises today can better prepare their key staff for life after outsourcing: 

    The outsourcing debate over recent years has been dominated by the operational ability of companies to transition processes to a third-party supplier to manage. Too many companies have presumed their business will carry on as it was pre-outsourcing, but with third-party staff managing some of the business functions. However, in the majority of outsourcing efforts there is a degree of employee transition, and when this happens there are leading practices for both transitioning and restructuring the retained organization.

    Experience demonstrates that those companies that proactively prepare their management effectively to:

    (1) Modify their roles, responsibilities, and management styles,

    (2) View outsourcing as a strategic tool,

    (3) Learn new skills, and

    (4) Change their daily routine...

    ...are those that are able to achieve value from an outsourced environment.

    The full article is featured in Crossing media's HROToday magazine, and can be accessed here

    '


     

    Jul 17, 2008

    The TSA awards its HRO engagement to Lockheed Martin - an overreaction?

    There's been a lot of noise in the market this week concerning the TSA's award or their HRO contract to Lockheed Martin.  While this is clearly a bold move into HRO for Lockheed, this isn't likely to prove a major loss for Accenture.  Why?

    Continue reading "The TSA awards its HRO engagement to Lockheed Martin - an overreaction?" »

    Jun 26, 2008

    The Evolution of Captive and Outsourced delivery models for business processes: what is the right option for your company?

    Graham-Russell We are privileged to showcase the following incisive article from my good long-time friend Graham Russell, who leads Global Transaction Processing for pharma giant AstraZeneca.  Graham has been a long-established and respected authority on shared services and outsourcing for many years, and is one of a rare breed of executives who has had many years of experience managing both models.  I can't think of many other people in the industry more qualified than Graham to discuss the merits and shortcomings of both captive and outsourced delivery models.  Over to you Graham:

    Birth of captives

    Once upon a time, global and pan regional companies operated as a collection of single country businesses. Their back-office financial support was organized in the same way, with processes and systems being developed at a local level in each country. In the eighties, new global companies such as Microsoft entered the scene and were able to quickly organize their businesses and their back-office support services in a different manner since they were able to start with a clean sheet of paper, making them appear lean and nimble.

    Continue reading "The Evolution of Captive and Outsourced delivery models for business processes: what is the right option for your company?" »

    Apr 17, 2008

    HROWorld 2008: An industry re-inventing itself

    HrowBraving the annual industry HRO schmooze fest this year, I realized I was emulating Roger Federer’s extraordinary Wimbledon run by making it to my fifth-consecutive show.  Only an elite few have made all six – at least I can’t claim that honor -:)

    From the moment I stepped into Naomi Bloom’s Brazen Hussies event on Tuesday night and was ordered to eat a heavily-garlicked vol-au-vent with the instruction “we’ve all had one, and so should you”, I knew something interesting was in the air this year.

    For starters, all the industry big-guns were there; the leading HRO providers with all had their head honchos; the sourcing advisors; both SAP's and Oracle's BPO teams espousing the virtues of outsourcing on their ERP platforms; every staffing, benefits, talent management, data-something-or-other firm you’d never heard of; and even a few mercenary analysts dotted around the place.  We even had a new double-act to entertain us – the Elliot and Richard show, moderated by the vivacious and cabalistic Jay Whitehead.  This was one networking event when you just had to be there.

    So, in true HROWorld tradition, I slammed myself with 20 back-to-back meetings over the two days, supplemented with a constant supply of stale coffee and a constant stream of sales literature I will cherish for a long time (ahem). 

    My overall impression of the state of HRO is one of re-engineering to get this right.  This was the resounding message I got from several discussions with the market-makers in this industry. OK, we’ve had a few non-starters recently, but let’s emphasize these were projects that were cancelled before any implementation work had taken place, and in several cases, the contract had just never quite made it to fruition.  This doesn’t imply that HRO is failing; it implies that some businesses have made strategic decisions that now isn’t the right time to undergo open-heart HR surgery on themselves.  And do you blame some of these firms, when the bottom has fallen out of their industry and they might just have some other urgent priorities to rectify?

    I wrote a year ago that the industry crystallized around the Convergys/J&J deal, and I was right.  What I liked about this show was the serious discussion on what works in HRO versus what doesn’t.  There was a refreshing honesty from almost everyone regarding the steps suppliers and buyers need to take to make this work…and so much less hype.  In fact we had so little hype, we could have used some.  Most of the suppliers are seriously focusing on what they are good at, and crafting HRO solutions based on their core strengths.  The need for standards and common service levels was discussed at length, with several ongoing initiatives in the industry currently focused on the joint-development of common HR standards and technologies that enable a more robust, repeatable HR delivery model. 

    There was universal recognition that HRO works when solutions are crafted from the bottom-up, with services added incrementally and HR leaders having more time to develop successful governance practices, as opposed to some of these massive end-to-end “big-bang” deployments, that have often resulted in a misalignment of expectations and delivery.  This isn’t failure or disaster; it’s a 9 year-old industry testing the boundaries of what works - and what doesn’t.  I’ve been at pains recently to point-out that 97% of HRO deals have succeeded – and by succeeded, I emphasize that they are plugging away to get this right.

    Let’s be brutally honest here, this is business process outsourcing – and this is a tough complex business, where things can only go wrong.  You really cannot judge the “success” of any major outsourcing engagement until it’s at least 3 years’ along and transition has been completed.  The day of the billion-dollar mega-HRO deal may be over for now, but take some time to look at the plethora of these “bottom-up” engagements taking place, where companies like ADP and Ceridian are racking up their HRO clientele at double-digit growth rates; look at Hewitt’s re-focused strategy on centering its core benefits outsourcing business as the kernel of its HRO delivery model; and look at Accenture's and IBM’s continuing efforts to optimize their global HRO engagement models, with HR service-delivery centers employing thousands of service personnel across several global locations. The seeds of this industry have been sewn, and we’ve had our reality check.  Now it’s time to move on and watch some great companies make this thing work.

    Mar 30, 2008

    March madness: little advisors, Starbucks redux, F&A is bubbling back... and EDS gets active

    So what was the month of March all about?

    Marchmadness_2Little outsourcing advisors.  The outsourcing advisor debate continued on Deal Architect.  We opened the debate here where we discussed the plethora of small boutique outsourcing advisors that continue to be influential advising on outsourcing engagements.  We also kicked off a heated discussion thread when we discussed what enterprises should look for in an advisor.  Vinnie makes some interesting comments on why many firms find advantages with the smaller players, especially when established advisors can suffer from Stockholm Syndrome and refrain from aggressive negotiation tactics with large vendors.  Bottom-line, it's "Horses for Courses" when enterprises decide what's best for them... now where is that recurring theme from again?

    Starbucks redux.  Returning CEO Howard Schultz made a quick decision to perform a U-turn on the retailer's HR Outsourcing (HRO) engagement with Convergys, which got debated here.  HRO has proved too much of a distraction for the firm’s management and staff, as the firm goes through a major restructuring to improve its offering to its customers, close some US stores and slow down opening new ones.  With the contract only eight months old, you cannot cite operational issues as a prime reason for this reversal of strategy.  As only Convergys was involved in the initial blue-print deployment work, both parties can exit the agreement before any serious implementation efforts have started. With the press trying to find flaws in the HRO model, I have been at pains to point out that only a small handful of HRO deployments (3%) have actually been terminated.  While comprehensive HRO deals may be under continual scrutiny, the demand for smaller scope HRO solutions in transactional areas is still healthy, with ADP announcing it is servicing payroll for 100,000 of Sodexo's employees.  The fifth annual HROWorld show this year should be interesting... and yes, I will be there.

    Finance & Accounting (F&A) Outsourcing is bubbling again.  There are a number of major F&A BPO pursuits well underway at the moment, with the market showing strong signs of a pick up this year after a slowdown in the latter half of 2007.  Watch-out for my upcoming report on this market in May.  My old friend Clarence Schmitz, who runs F&A BPO specialist Outsourcing Partners International, has also been busy expanding his company's footprint.  Only a week after he announced his firm had opened a new F&A service center in Gurgaon (New Delhi), I was invited to the opening of their new 280,000 sq foot facility in Bangalore in May.  OPI now boasts three facilities in India (their other center is in Kochi),  in addition to its Central European center in Sofia, Bulgaria.  And if you ever wanted some excellent - and low-cost - skiing, don't discount Bulgaria...

    EDS is back onboard the public sector gravy train. It's been an interesting few weeks for EDS, with its contact center outsourcing and government businesses.  No sooner had it announced its joint initiative with Microsoft to develop its Dynamics CRM solutions for its call center business, that it announced it had been named one of the preferred suppliers to the General Services Administration's $2.5 bn Indefinite Delivery/Indefinite Quantity contact center services contract.  This comes hot on the heals of a mega $1.3 bn contract with the Singapore government's iDA to provide desktop services across Singapore 74 public agencies both domestically and worldwide.  Having lived and worked in Singapore, I can personally attest that the country is a true pioneer in developing Internet-enabled government services for its citizens. With EDS' recent initiatives to restructure its SAP services practice and its renewed focus on developing its legacy integration services, are we looking at a new era for the Plano TX firm?  My view is it needs to fill the F&A BPO gap in its delivery portfolio and it will have a completing array of BPO and IT services.  Don't bet against an acquisition this year to remedy this.  Drop me an email if you want to speculate further...

    And more from Blogsphere in March....

    Continue reading "March madness: little advisors, Starbucks redux, F&A is bubbling back... and EDS gets active " »

    Mar 11, 2008

    Is your industry over-networked?

    Tables Is there such a thing as being over-networked?  While it's practically impossibly to get finance professionals, for example, to do anything but worry about their work and pry them away from their offices, HR folks can't seem to get enough of seeking out the next shindig where they can listen to best-practices all day long and hobnob with their peers from other firms.

    My good friend Mark Stelzner, over on his blog Inflexion Point, has hit upon this issue with his coverage of the litany of member-based HR associations and consortiums.  I have never witnessed an industry which is as networked as HR.  Everyone knows everyone, and senior HR personnel seem to spend an exhorbitant amount of their time traveling to these conferences:

  • SHRM (The Society for Human Resource Management);
  • IHRIM (The International Association for Human Resources Information Management);
  • CLC (The Corporate Leadership Council);
  • HCI (The Human Capital Institute);
  • HR.com;
  • HROA (The Human Resources Outsourcing Association); and
  • i4cp (The Institute for Corporate Productivity)
  • It'll be interesting to hear your views on associations you frequent and whether your industry has the peer networking you need to do your job more effectively.

    Mar 01, 2008

    Managing talent in these economic conditions

    Talentmanagement_3As we reflect on enterprises' strategies for this troubled economic climate, people seem to be thinking about the same old "routine" approaches for battening down the hatches and riding this out - i.e. mass layoffs and budget slashes across the board.  This may be the case if this recession is longer and deeper than we fear, but in the shorter term, I am seeing many companies taking a different approach when bracing themselves for this forthcoming downturn than many past recessionary experiences.

    Continue reading "Managing talent in these economic conditions" »

    Feb 23, 2008

    February highlights

    Gems Some thought-provoking gems from February:

    An Industry Gone Wild on HRM Technology Deployment:  HR luminary, Naomi Bloom, is on top form as she gives us a breakdown of the evolution of the Human Resources Management (HRM) software market over the past 4 decades, and discusses the influence of how IT and Business Process Outsourcing has given companies access to delivery models and scarce talent to run HR technology platforms.  However, she doubts today's HRM software vendors will achieve the Holy Grail of a true one-to-many model with SaaS, as they cannot create the "embedded intelligence across HRM processes" and has faith in HR BPO as the preferred deployment and payment model.  Well worth a read.

    The NASSCOM 2008 Diaries: More Fog on the Windshield:  AMR Research's Chief Research Officer, Bruce Richardson, on his experiences and takeaways from the recent NASSCOM event in India.

    Renewal Strategies for ITO Relationships:  TPI's thought-provoker Peter Allen is on the money discussing options enterprises have when they enter into renewal discussions with their ITO provider.  "Incumbent providers should not be retained on the basis of predecessor agreements.  A review of the current market conditions – meaning pricing, contract terms, and scope of services – is essential. We’ve observed that some clients can become complacent and trapped by the perception that the transfer of responsibility and institutional knowledge between IT service providers, or repatriation, becomes costly.....The pricing of the existing contract should be compared to the prevailing market for like services in order to gauge the range of anticipated future pricing"  I appreciate Peter's efforts to discuss some of these options for enterprises today so openly on his blog.  My view is that enterprises today need to use renegotiation as a great opportunity to get more value (process and technology) from their provider.  More on this to follow...

    Mexico Sourcing:  That Margarita Never Looked Better:  Jason Busch on Mexico's attractiveness as a manufacturing sourcing location for US businesses.  "When it comes to the dollars and sense of importing manufactured parts and goods into the US on a total cost basis, the benefits that Mexico presents more than outweigh the risks."  Interesting discussion... builds on what we discussed here.

    You're Not Consultants Anymore:   Brian Sommer on why consultants have become "order fulfillment specialists".   "People love to call themselves consultants even when all they do is show up at the same outsourcing data center and do the same task every single day.  Likewise, you are not a consultant if you routinely install the same software package using the same methodology that is sold through a menu of pricing options from which a customer selects. No, you're not a consultant."

    Podcast:  Outsourcing in a Downturn:  And finally....yours' truly being grilled on the potential ramifications of an economic downturn on outsourcing trends by AMR Research's CEO Tony Friscia. 

     

    Feb 13, 2008

    The Human Capitalist got it right

    The_hc_3   It's been one of the best running blog discussions of recent  months, where the Human Capitalist - aka Jason Corsello - predicted that Workstream would get acquired by Empagio.  Credit also to Mark Stelzner for hitting the spot with this one.   This is one of the first times I have seen a whole host of industry experts come together in one "location" to debate who would acquire who - and when it would happen.  A great example of blogging leading the media charge on an issue like this.  Interesting times we live in...

    Jan 10, 2008

    My 10 cents on HR and seats at tables

    Boardroom_3Firstly, thanks to all of you who contributed to the lively debate following the recent post "Will the HR function have a seat at the corporate table in 2008?".  I was merely highlighting some interesting thoughts from the Inflexion blog, and didn't expect such feverish input from so many of you!  (And before I continue, I promise this will be my final rendition using the corny phrase "seat at the table").  Anyway, I have been under pressure from several people to put forward my opinion in this topic, so here we go:

    HR used to be  merely "personnel" and looked after the administrative activities related to basic employee needs.  It wasn't until the '80s when the wider berth of "Human Resources" was developed where HR would be activity involved in all issues people within a firm, and not just the basic admin, i.e. recruiting, organizational design and development, corporate culture, compensation, career planning and counseling etc.  The challenge of HR leaders was to get taken seriously at board level and prove their worth to the business.  Not an easy task where you are not directly related to revenues and there are always more "critical" issues to be discussed before people strategy.  The HR struggle had begun. 

    Then came the onset of HR suites like Peoplesoft, whereby it became vogue for HR executives to apply metrics to their organizations to help base management decisions.  Where else in the company was there a more comprehensive view of staff profiles, compensation, attrition-rates and performance than in the HRIS? Hence, where finance departments could show the board how to budget and forecast the business to aid decisions, HR could (in theory) link employee performance with the business.  Part of the problem has been that HR (unlike finance, for example) hasn't done a good enough job of embracing technology to demonstrate real value metrics to the business.  It has been stuck in the weeds of blocking and tackling, and not focused enough in areas that get real board attention.

    And then the wave of HR outsourcing hit after 9/11.  All this achieved was a very public dissection of the "strategic value of HR" as several high-profile companies grabbed at reasons to move out as many HR people as they could into service providers, or out of the firm altogether.  It has taken a few years for HRO to iron out its issues, but it had the impact of alienating many HR leaders within firms, and driving them further away from the corporate table.  However, I am convinced the HRO industry has now found its balance and the real HR issues are back at the forefront of many organizations' agendas.

    My view is centered largely on the skillset of the HR professional today - it's too focused on the legal issues, compliance, managing the basics... and not enough on delving into corporate data to provide real input into driving a talent strategy into the organization.  Moreover, we need more "business managers" in HR - people who understand the real business issues, and how to help their firm hire, manage and retain key talent.  HR is the most important function in today's organizations, but it has simply not been developing in the right manner.  Hence, my thoughts are around HR helping to instill world class HR principles and practices into today's managers.  I once managed a team of 14 senior people and it was one of the toughest challenges of my life.  I needed support, advice - and a venting outlet - to help me do this effectively.  The success of my whole business function centered on my ability to be a good manager.  This is where HR, in my opinion, comes into play.  It is there to support today's managers, who are under ever-increasing pressure, to get the best out of their people.  I have seen so many positive examples of where this works in firms... and, unfortunately, some less successful examples.

    Will it get there in 2008?  Professor Dave Ulrich, with whom I have enjoyed discussing these issues on several occasions,  outlines  excellently the roles HR departments must fulfill to deliver value.  His mantra is simple:  HR must play a role in implementing state-of-the-art strategies that are tailored to the needs of the business... an "operational executor role".  In a world of rampant change, where firms are constantly globalizing, restructuring, outsourcing, divesting and acquiring, the need for the operational executor has never been so intense.  It is my belief that we will see the roots of this happening in 2008 - otherwise businesses will struggle to survive and change in these complex times.      

    Jan 07, 2008

    The worst mistakes companies make when they evaluate BPO - and how to avoid them (Part I)

    "Best Practices" are formed through the experiences of firms innovating and trying out new ways of doing things.  So - in reality - that means they'll tell you where they messed up and give advice on how they got it right (or how they would do something differently second-time around).  BPO is no exception... in fact, it's probably a shining example of how to learn from others' mistakes :)

    Here, in my experience, are the most common mistakes companies have (and many still are) making when evaluating BPO:

    Continue reading "The worst mistakes companies make when they evaluate BPO - and how to avoid them (Part I)" »

    Jan 06, 2008

    A great debate on HR

    Folks - incase you hadn't seen it - check out the discussion thread for the recent post "Will the HR function have a seat at the corporate table in 2008?".  Some true heavyweights from the HR world have chipped in with some great insights.

    Dec 29, 2007

    Will the HR function have a seat at the corporate table in 2008?

    Mark Stelzner, author of organizational-development blog Inflexion Point (and did that gravelly voice-over for Southwest Airlines) sees 2008 as a make or break year for the role of Human Resources:

    "Like Toby on NBC’s The Office, HR continues to have a bad name in the eyes of business units, managers and employees.  Often viewed as either enforcers, legal risk mitigators or transactors, the human resources department is not the first place business leaders turn to for advice and guidance in meeting strategic goals and objectives.  They are generally perceived to lack basic business acumen (root cause analysis, business case skills, comparative analytics, etc.) despite years of trying to shift internal and external perception.  I believe this is a make-or-break year for HR.  If consistent, demonstrable examples of strategic value add do not break the glass ceiling in 2008, we will see the continued absorption of HR responsibilities into legal, finance, IT and outsourced service providers, effectively resurrecting the “personnel department” of old."

    The HR function has been under increasing scrutiny in recent years, typified by the now-infamous 2005 Fast Company article "Why We Hate HR", by Keith Hammonds.  Stelzner does hit upon a very important point that HR strategy is becoming a core competency that is needed by managers in all corporate departments.  Any successful business manager today should have a solid grounding in HR skills when managing talent, in addition to a degree of understanding of finance to allocate and determine budget for his/her area, and some understanding on the IT needs of his/her function.  Hence, "HR strategy" is not something that is silo-ed into a single HR department, but is pervasive across an organization's management.  The HR department should be the driver and facilitator of sound HR practice across the management team, and ensure these HR practices are aligned with their organizations' strategic goals.  By demonstrating this alignment between solid HR and business performance (i.e. linking customer metrics with employee performance), HR will regain it's "seat at the table" when corporate decisions are made.  Moreover, with many businesses undergoing complex change with outsourcing, globalization and this predicted economic downturn, the role of HR has never been so important as it is today (I outlined the role HR needs to play in a company's outsourcing environment in this article for the IAOP earlier this year).

    Southworst '

    '    ......not yet free to have a seat at the table

       

    Dec 28, 2007

    Is India adapting to the Night Shift?

    A new report released by the Associated Press is highlighting the issues of outsourcing jobs on Indian workers' health.  While the report lacks any hard evidence and focuses on a handful of individual cases, data released by the Indian Council for Research on International Economic Relations estimated the cost of these increased health issues, namely sleep disorders, heart disease and depression, could amount to $200bn for the Indian economy over the next 10 years "if corrective action is not taken quickly".

    As we discussed here on HFS a few weeks' ago, the business case for organizations outsourcing certain services to locations closer to home (or even at home?) is becoming increasingly appealing - especially for those services that require a high degreee of interaction between the organization and its outsourced workers (for example software development).  For those services where the offshore workers need to be operating at the same hours as US companies, for example customer support / help-desk services, the Indian workers must adapt to working swing-shifts and unsocial hours.  My concern here is that Indian culture is very family and social-centric, and these types of jobs are becoming increasingly less desirable for many workers who go into these jobs initially to enjoy the increased compensation on offer, but are quickly realizing the trade-off with their lifestyle, health and family / social issues.  As long as outsourcing providers are servicing US businesses from India that require a large degree of worker overlap, they are going to be faced with increasing issues of attrition and rising wages to keep workers in these jobs.  This is the chief reason why the Latin America region is on the cusp of a major upswing of taking on outsourced jobs that benefit from the time overlap.  At the same time, it increases the appeal of UK and European-centric services being run out of India, where the time differences are far less oppressive on the offshore workers. 

    These health and social issues are very symptomatic of a developing economy like India - and my only surprise is the speed at which they are happening.  I believe these issues will only be magnified when work is outsourced from US businesses to China, where the time differentials are even more brutal, and the language issues much tougher.  That is one of the principal reasons why China is (and will continue to be) far more successful at taking on services such as engineering and manufacturing, where these worker interaction issues between offshore staff and Western organizations and their customers are less crucial. 

    Indiainc_2   '

    '

    Is India growing up too quickly?

    Dec 22, 2007

    Globalization of labor and outsourcing will dominate Human Capital strategy in 2008

    Worldatworklogo An interesting study conducted by WorldatWork, one of the leading HR executive organizations for F500 companies, has cited firms' abilities to deploy a global strategy towards its workforce, the advancement of technology and the increase in outsourcing as having core implication for workforces in 2008. 

    "Organizations will look for ways to pull jobs apart to find pieces to outsource. Thought must be given to the motivation of workers assigned pieces of the work."

    No great surprises here, but hearing the "O" issue becoming so prevalently and openly debated by one of the most reputable HR bodies is a step forward.  The majority of other leading HR bodies are still sweeping the importance of outsourcing under the carpet, so it's a significant mind-shift to see it reaching the top of the HR agenda.  I discussed here the crucial role HR strategy must take on when companies go through the outsourcing process (earlier this year).

    Aug 01, 2007

    What do you do all day at work?

    Loved this post from Mark Stelzner's Inflexion Point....

    Are you wasting time at work?  According to the results of the latest Salary.com 2007 Wasting Time Survey, you probably are. In fact, employees waste approximately 20% of a typical 8.5 hour work day. And guess what - younger employees (ages 20-29) waste anywhere between 10-25% more time than their older colleagues.

    So what exactly are employees doing?
    * Using the internet for personal needs (34.7%)
    * Socializing with coworkers (20.3%)
    * Conducting “personal business” (17%)

    And why do they do it?
    * They don’t have enough work to do (17.7%)
    * Their hours are too long (13.9%)
    * They are underpaid (11.8%)
    * Their work isn’t challenging (11.1%)

    Personally, I thought the British went down the pub after lunch, while the Yanks spent all their time in boring meetings eating pizza....maybe times have changed?

    Stelzner

       Mark Stelzner... he knows what you're up to all day

    Jun 16, 2007

    Sticking to your guns

    Kudos to Jason Corsello (aka the "Human Capitalist") for this brave and excellent post lauding the merits of HR software firm SuccessFactors.  Jason is fast-becoming the pre-eminent industry analyst in HR technology because he says what he thinks based on his informed judgement.  Having met Lars Dalgaard myself and having had a lot of exposure to the SuccessFactors product, I can attest to the fact that Jason is spot-on here with his synopsis.  It's refreshing to have analysts unafraid to air their views.

    Corselloj Jason Corsello aka "The Human Capitalist"

    Jun 02, 2007

    The HR Outsourcing Industry Crystallizes around J&J

    • Jj_2
    • You can’t understate the importance of the 10-year $1bn Johnson & Johnson HR Outsourcing contract to the long-term sustainability of the HRO industry. When discussions began within J&J back in the summer of 2005, the key question bouncing around J&J’s leadership was “can we really do this?”.  For a company that has grown largely through acquisition, J&J today boasts a couple of hundred businesses operating under the flagship brand.  You can only begin to imagine the challenge of standardizing this global business on a common HR platform, across multiple countries, supported by centralized HR organizations.  I recall times it looked doubtful the deal would happen with all the negative publicity surrounding HRO, the contractual issues of some of the earlier engagements, and the financial difficulties experienced by some of the ambitious providers who bit off slightly more than they could initially chew.  It became abundantly clear over the last 6 months that J&J would prove to be the bellweather of the HRO industry – its very survival hinging on whether this would actually happen.

    • What is transpiring in today's industry, is that outsourcing (BPO and ITO) is providing the lever for companies to go through major change (hey – I managed to avoid saying “transformation”).  And what’s more, HR outsourcing drives business change with the investment footed by labor arbitrage, process automation and self-service technology (contrary to the mega ERP implementations of the ‘90s where the cost was borne by the shareholders).  For many global organizations, they simply cannot drive the scale of change necessary through organic process re-engineering – it’s often far too expensive, far too slow, and often far too political.  Many companies do not have the required management experience to do it either.  Going through outsourcing drives shock into system, forces change quickly and usually reduces administrative costs.  Yes, a handful of companies decided it was not for them, for various reasons, but the vast majority would never go back.  They want to work with what they have achieved and make it better, through better governance and constant innovation. 

    So what’s next for the HRO industry? – here are my snapshot predictions:

    • Global deals will continue to slow as the major providers reach capacity and absorb what they have already taken on
    • The upper middle-market will open up aggressively as firms with 5,000 – 10,000 employees pursue broader outsourcing strategies across SG&A and IT functions.  Interest in outsourcing is at an all-time high and companies are vigorously exploring sourcing models that work for them – i.e. captives / hybrid models / full scope outsourcing
    • The “Transform first, then outsource” myth is beginning to fade (but slowly).  The common plea of “we can’t do this right now until we get our act together internally first” isn’t washing as well as it used to, with more and more companies fixing their internal process and technology requirements while going through outsourcing transition.  J&J is a perfect example of that, and a bellweather for many more organizations to follow who desperately need to change.
    • HRO will become more accepted as a standard outsourcing practice, like ITO, F&A and Call Center.  My post on the Human Capitalist blog in December 2006 lays out the issues the HRO industry has had to contend with, unlike other outsourcing towers:

      Holding HR Accountable

    May 31, 2007

    The Job Trap

    Great post from Mark Stelzner's "Inflexion Point"....

    http://www.inflexionadvisors.com/blog/

    "I was looking over my contact list yesterday evening and came to a stunning (but not shocking) realization. I could only identify five people that are happy with their current job. Virtually everyone I know would jump if a better opportunity presented itself, and most are either actively or passively pursuing side interests and opportunities with the hope that one day soon, that “perfect job” will rear its glorious head.

    "Many years ago, a mentor and friend suggested that employment nirvana required three significant attributes - 1) doing something you enjoy and truly believe in; 2) the opportunity for advancement; and 3) decent cash. I would argue that a majority of my former and current colleagues can check at least one box, less than fifty percent can check two, and an increasingly small minority have found that perfect combination of passion, pay and promotion.

    "In the industries in which I’ve worked (human resources, the public sector, outsourcing, call centers), attrition is ridiculously high. Industry events turn into reunions as thousands of former colleagues emerge with new logos and titles beneath their names. Thousands more troll the trade show floor hoping to find the next job that just may be the “perfect fit”. It’s well-known lore that many industry executives use such events to lure dissatisfied workers from their current employ.

    "Paying the price in all of this are employers and families.

    "The gap between the recruiting pitch and life in the trenches approaches Grand Canyon-like proportions as employers become increasingly desperate for talent. Recruiters are typically incented on volume, not retention, so forcing a square peg into a round hole is second nature. Hiring managers are often too busy to perform proper due diligence and instead need a warm body in seat as quickly as possible. And executives stand to lose precious dollars from their P&L if preapproved headcount are not onboarded in a timely fashion.

    "Unfortunately, families pay the biggest price. Forced to endure the 24-hour lifecyle of their loved ones, the mirage of work/life balance and predictable employment is more ellusive than ever. With the new job “high” fading ever faster, loved ones must suffer through the sad realization that this, alas, was yet again not the job everyone had hoped for. And the cycle continues….

    I want to blame someone for this mess but I struggle to identify who. The job boards and recruiting technologies simply present what is entered - garbage in, garbage out. Employees feel the grass is always greener - and is often is - but everything comes at a price. Employers are not evil-doers yet cannot clearly convey what life is really like behind closed doors. This forces us to put our trust in our friends who know these firms well. And when that fails, our gut instinct is the only remaining barometer."

    I'd like to add to Mark's comments:  the work environment has changed dramatically over the last 4-5 years.  Executives are expected to check their blackberries every 30 minutes - right up to midnight, email checking is now commonplace over the entire weekend.  The work environment intensity has magnified significantly as employees become tethered, accounted, and measured like never before.  Some employees are just getting burned out and employers are getting increasinly expert at playing the "churn and burn" game.  In my opinion, the employee/employer "trust" has hit an all time low - it's all about "what can you do for me today"...  Companies need to work harder at enforcing work-life balance, or we will see increasing employee burn-out in the workplace.

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