HR Outsourcing - A Primer (And Look Back)

SHRM Webcast,[object Object],June 17, 2010,[object Object],The HR Outsourcing Evolution,[object Object]

CAUTION – Mark may make this sound easy. It’s not. Electing to hand over the keys to a third-party is one of the most difficult decisions you can make. Don’t let his deep voice lull you into visions of simplicity.,[object Object],Agenda,[object Object],2,[object Object]

What A Long Strange Trip It’s Been,[object Object],3,[object Object],“Sometimes the light’s all shining on me. Other times I can barely see. Lately it occurs to me ...” ,[object Object],~ The Grateful Dead,[object Object]

The Premise (and Promise) of HR Outsourcing,[object Object],“Given the surge in global mergers and acquisitions, the delayering of organisations around the globe and the increased speed of decision-making, HR is becoming more and more complex by the day. Many companies found their in-house resources and capabilities challenged in dealing with this complex situation.”,[object Object], ~ The Economic Times (Feb ‘02),[object Object],Internal efficiency gains are insufficient,[object Object],Economies of scale will drive down costs,[object Object],Retained staff can focus on strategic activities,[object Object],Less customization and more standardization,[object Object],Innovation will continue post go-live,[object Object],Provider sustainability is a non-issue,[object Object],4,[object Object]

The Reality (For Some) Was Quite Different,[object Object],“Your mess for less”,[object Object],Customization prevailed,[object Object],Production deadlines were missed,[object Object],Scope was too aggressive,[object Object],Shadow organizations emerged,[object Object],Provider profitability was cut short,[object Object],Third parties exited the market,[object Object],5,[object Object],“Some providers in the past have promised clients that ‘they could have their cake and eat it, too.’ They signed contracts at low price points in the belief that they could scale up and make the deals profitable later. ‘That hasn't happened. Now there is a lot of renegotiation.’”,[object Object],[object Object],[object Object]

The Business Case For Change,[object Object],7,[object Object],“When we are no longer able to change a situation, we are challenged to change ourselves.” ,[object Object],~ Victor Frankl,[object Object]

Innovation Is Extremely Important…,[object Object],8,[object Object],“… going beyond transactional/operational work to achieve new productivity gains and/or new revenue streams … through unique, creative methods.”,[object Object],~ Horses for Sources,[object Object]

… But Serious Challenges Exist,[object Object],9,[object Object]

Hope For The Future Remains High …,[object Object],10,[object Object]

… Because HR Must Innovate Every Single Day,[object Object],11,[object Object]

10 Steps To Successful HRO,[object Object],12,[object Object],“The difference between failure and success is doing a thing nearly right and doing a thing exactly right.” ,[object Object],~ Edward Simmons,[object Object]

Step One – Get Your House In Order,[object Object],Define Your Objectives,[object Object],Why are you pursuing this course of action?,[object Object],What is your desired outcome?,[object Object],How will success be defined?,[object Object],Is this proactive or reactive?,[object Object],Take Inventory,[object Object],Understand the nature of your current contracts and relationships,[object Object],Itemize all internal and external service providers,[object Object],Meet With Internal Stakeholders,[object Object],Assemble representatives from finance, IT, procurement and legal,[object Object],Assess the possible impact on your clients/business units,[object Object],Learn and benefit from outsourcing initiatives in other areas,[object Object],13,[object Object]

Step Two – Seek Market Intelligence,[object Object],Benchmark,[object Object],Assess all aspects of service delivery,[object Object],Determine what market changes have occurred since last investigated,[object Object],Beware of oranges disguised as apples,[object Object],Leverage Advisory Firms,[object Object],Do not become codependent on your advisors/consultants,[object Object],Find those willing to stand next to (or behind) you,[object Object],Extract every ounce of knowledge you can,[object Object],Network, Network, Network,[object Object],Schedule calls/meetings with your peers,[object Object],Discuss lessons learned and what they’d do differently now,[object Object],Attain guidance on service providers that worked (and those who didn’t),[object Object],14,[object Object]

Step Three – Meet With Prospective Providers,[object Object],Culture Matters,[object Object],No two organizations are the same, so embrace your uniqueness,[object Object],Assess your comfort with a provider’s philosophical market approach,[object Object],Prescreen for the likelihood of a symbiotic relationship,[object Object],People Matter,[object Object],Did they do their homework?,[object Object],Do you like your sales person?,[object Object],What did you think of their overall team?,[object Object],Did they pitch, do discovery or both?,[object Object],Process Matters,[object Object],Invite procurement (and perhaps others) to the meeting,[object Object],Think about opportunity cost,[object Object],15,[object Object]

Step Four – Regroup And Reassess,[object Object],Share Your Findings,[object Object],If your premise for HRO still valid?,[object Object],Is the market prepared to support your desired outcomes?,[object Object],Is there additional work to do prior to continuation?,[object Object],Were you unable to locate critical information?,[object Object],Do A SWOT Analysis,[object Object],Strengths and weaknesses,[object Object],Opportunities and threats,[object Object],Create An Accurate Project Plan,[object Object],Assess resource allocation,[object Object],Document time commitments,[object Object],Ensure travel and expenses are preapproved,[object Object],Notify all other stakeholders,[object Object],16,[object Object]

Step Five – Issue The (Dreaded) RFP,[object Object],Share Your Work,[object Object],Be completely transparent about your goals and objectives,[object Object],Include relevant systems inventories, base case financials and all working assumptions,[object Object],Bigger is not better,[object Object],Embrace Market Maturity,[object Object],In highly evolved segments, don’t question table stake capabilities,[object Object],Emphasize quality of Q&A over quantity,[object Object],Get past “Yes”,[object Object],Allow For Controlled Collaboration,[object Object],Give providers ample time to respond,[object Object],Manage lines of communication yet share with all,[object Object],Turn around Q&A very quickly,[object Object],Admit mistakes early and often,[object Object],17,[object Object]

Step Six – Down Select And Site Visits,[object Object],Honesty Wins The Day,[object Object],Explain your logic and reasoning to providers – they deserve candid feedback,[object Object],Choose no more than three (preferably two) for site visits,[object Object],Don’t automatically include the incumbent,[object Object],Embrace Subjectivity,[object Object],Allow team members to share their emotional responses,[object Object],Ask yourself if you want to work with the proposed team,[object Object],This reflects your legacy – proceed with caution,[object Object],Make Site Visits Meaningful,[object Object],Set a tight agenda,[object Object],Meet with those who own the outcome, not just the sale,[object Object],Don’t let a good lunch overshadow a bad performance,[object Object],18,[object Object]

Step Seven – Speak With Real References,[object Object],19,[object Object]

Step Seven – Speak With Real References,[object Object],Pay Attention To Details,[object Object],Is the provided reference on the same product/release?,[object Object],Are they in implementation or production?,[object Object],Are they at parity in terms of complexity and scope?,[object Object],What would they have done differently?,[object Object],Don’t Be Afraid To Ask For More,[object Object],Feel free to work your professional networks to get additional data,[object Object],Ask until you get the answers you want/need,[object Object],20,[object Object]

Step Eight – Establish Governance And SLAs,[object Object],This Is A Partnership,[object Object],Avoid single points of failure,[object Object],Assign clear roles and responsibilities and allocate dedicated staff, as appropriate,[object Object],Emphasize collaboration over escalation,[object Object],Service Level Agreements,[object Object],Calculate the value of each SLA and assess what you’re measuring and why,[object Object],Measure monthly and avoid quarterly averages,[object Object],Openly discuss viable scenarios,[object Object],Realize that the last thing you want is a SLA penalty payment,[object Object],Benchmark And Validate,[object Object],21,[object Object]

Step Nine – Negotiation And Contracting,[object Object],Buy On Best Value,[object Object],Model all variable inputs and anticipated changes,[object Object],Ensure the provider is engaging profitably,[object Object],Have only one person negotiate pricing,[object Object],Retain Outside Counsel,[object Object],Offers a real-time feel for marketable terms and conditions,[object Object],Compliments your general counsel staff,[object Object],Has a prior body of experience negotiating to successful outcomes,[object Object],Think Through The Business Implications,[object Object],Term and termination,[object Object],Scope and change order processes,[object Object],Key personnel ,[object Object],22,[object Object]

Step Ten – Innovate And Ideate,[object Object],That Sick Feeling Is Normal,[object Object],This is an arduous process,[object Object],Be prepared for mistakes and missteps,[object Object],Acknowledge your role in the process,[object Object],Welcome To The New Base Case,[object Object],Continuous improvement must be emphasized,[object Object],Take fat out by adding scope in,[object Object],Measure, study, improve… then repeat,[object Object],Participate Willingly,[object Object],Join the client advisory board,[object Object],Attend annual events,[object Object],Brief with executives,[object Object],You can’t outsource accountability,[object Object],23,[object Object]

Questions And Answers,[object Object],24,[object Object],“The important thing is to not stop questioning. Curiosity has it’s own reason for existing.” ,[object Object],~ Albert Einstein,[object Object]

Thank you!,[object Object],Contact Information,[object Object],Mark Stelzner,[object Object],Principal, Inflexion Advisors,[object Object],415-658-7460,[object Object],mark.stelzner@inflexionadvisors.com,[object Object],http://www.inflexionadvisors.com,[object Object],http://www.twitter.com/stelzner,[object Object],http://www.linkedin.com/in/markstelzner,[object Object],25,[object Object]

HR Outsourcing - A Primer (And Look Back)

HR Outsourcing - A Primer (And Look Back)

HR Outsourcing - A Primer (And Look Back)

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