The Puzzling Puzzle of HR and HRO

Have you ever had a thought that was hard to express, been at a loss for words to explain something?

Sometimes I find it is helpful to first express what I can and then build piece by piece over time until I arrive at a complete construct, kind of like building a jigsaw puzzle without the picture on box.

Here are a few of the HR and HRO puzzle pieces I am trying to fit together:  

• The increasing use of HR point solutions in an intended “best of breed” mix

• The changing role of a primary multi-process vendor

• The impact platform BPO will have on the market and HR

• The role of business analytics and HR analytics

• Finding the optimum shared services balance of insourced and outsourced services

• The danger in divergent paths for HR services delivery that “free up HR generalists to do more strategic work”

• How to move up the value chain from improving operating expenses to improving the business

• The impact of cost-driven short-term investment decisions on long-term HR transformation

To be a strategic business partner, HR itself must have two strategies. The first is a strategy for how it  will create business impact, which may include initiatives to increase revenues and maximize the total cost of labor. The second is a strategy that answers how HR should be organized, and what capabilities, tools and technologies it needs to deliver results to the business.

One of the advantages of long-term strategies for HR is that they can be guiding frameworks – even when there are delays and needs for modifications due to business and economic realities – without losing sight of the final picture.

In January I introduced the concept of the HR services portfolio manager and the services delivery architect. It is the role of the services delivery architect to build out the service delivery model ensuring it is all seamlessly integrated, managed and provides the required service quality, cost and performance. The implication is that the service delivery model has been developed with both the HR operational and business impact strategies in mind.  

I was just scanning the 2009-2010 edition of Cedar Crestone HR Systems Survey, and it triggered a puzzle connection for me.  Survey respondents, seventy-four percent of which were from HR, were asked where they were spending at least twenty-five percent of their time and budget. Ranking high on both elements were business process improvements, talent management processes, and employee and manager self services. More time than budget was spent on HR systems strategy and business intelligence/workforce metrics. And even less time and budget were allotted to systems upgrades.

How targeted can you be in improving business and talent management processes if the underlying systems capabilities are not present, fully integrated and unfunded?  If there is a full architected HR systems plan, then a detour driven by the economy can be accommodated and interim plans based on existing capabilities. If there is not a plan, then short- term plans and decisions may be building a puzzle with key pieces missing. Do you have all your key puzzle pieces laid out on your planning table?

Linda Merritt, Research Director, HRO, NelsonHall

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One Comment on “The Puzzling Puzzle of HR and HRO”

  1. Allen Hoon Says:

    A couple of points in this post deserve comment.

    You accurately reinforce that “To be a strategic business partner, HR itself must have two strategies. The first is a strategy for how it will create business impact, which may include initiatives to increase revenues and maximize the total cost of labor. …”.

    The challenge HR and the HRO industry continues to face is that the accountability of the business benefit achieved from HR transformation initiatives is rarely allocated to or underwritten by business operations units. Accordingly, HR ends up having to justify the entire business case for HR transformational objectives.

    A strong set of business analytic metrics and tools is the first step in breaking through this wall. With the right analytics in place, responsibility for benefits realization can be assigned to the business operating unit(s) that derive benefit from the transformational initiatives. Of course, this assumes that the C-suite will agree to investment and benefits realization allocations to the operating units.


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