Posted tagged ‘ADP’

Moorepay’s Roadmap to Success is in the Cloud

October 4, 2012

Linda Merritt, HRO Research Analyst, NelsonHall

Moorepay is a payroll and employment service provider in the U.K. with over 10,000 clients and it is a part of NorthgateArinso (NGA). Earlier this year I blogged about the launch of its new HR and payroll platform service for the small employer market in the U.K. This week, I spoke with Ann Fitzpatrick, Moorepay managing director, for an update.

In a brief recap, MoorepayHR is a cloud-based SaaS and BPO service built on NGA’s Preceda SaaS platform that is customized for the U.K. market and combined with Moorepay’s payroll and HR services such as employment law and health and safety advisory.

Cloud Opens the Small Employer Market

Most major HRO vendors do not attempt to reach the small employer market, which is just what Moorepay serves. Certainly small employers want professional and modern services, but until the rise of streamlined HRO platforms in the cloud, the costs were unaffordable for both clients and vendors. In the U.S., ADP has had such great success with Workforce Now, it launched a larger version called Vantage HCM. Now, employers in the U.K. can have the same level of service as larger companies at very affordable price points.

The Roadmap to Success

There are three levels of service, each with its own pricing openly displayed right on the company’s website. Payroll is available as an option with each of the service levels.  Approximately 40% of clients are currently adding payroll. In a bit of a nice surprise, ~80% of customers are choosing the highest level that comes with client services, making it a real BPO offering.

A 1Q 2013 launch is planned for the highest level of service, HR Advanced, which will add modules for talent management, recruiting, and remuneration. That will make the service more valuable for employers in the 100-400 range with more complex HR needs.

With its large base of payroll clients, Moorepay will later market the new system and services to its existing clients to allow conversion to the new system and added services.

Finally, Moorepay is receiving good support from the NGA Preceda team and they will work together to ensure the technology development roadmap is completed in the near future, including mobile and tablet access.

The Proof is in the Pudding

The new system has just reached its three-hundredth customer and all of these customers are new to Moorepay. The company now has a solid base of wins and users to move forward with its multi-stage approach to growth.

The small employer market is clearly hungry for such a service. Even before launch, there were hundreds of inquiries, and the number of inbound leads has rapidly increased. You know something is going well when customers are lining up at your door!

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The Parable of IBM and Kenexa: Part I

September 13, 2012

Linda Merritt, HRO Research Analyst, NelsonHall

I have not seen such a range of varied opinions from members of the HRO and HR tech communities as those about IBM’s acquisition of Kenexa. The commentary showed that many were taken a bit by surprise and weren’t sure how to analyze the news that IBM was acquiring Kenexa for $1.3bn.

IBM Bought Kenexa?

The surprise was not the purchase of Kenexa, which was foreshadowed by the acquisition of Taleo by Oracle and SuccessFactors by SAP. It was more about the fact that IBM was doing the purchasing.

A few  thought that ADP might make such an acquisition since it had already expanded its benefits capabilities with Workscape and SHPS and its RPO capabilities with The RightThing, so wouldn’t talent management make sense? Speculation continued, perhaps Mercer, Ceridian, or even ADP would be the target of an acquisition or merger.

IBM itself was considered likely to continue its acquisitive ways with something more in the talent management / HCM space. Likely targets mentioned included Cornerstone OnDemand, SilkRoad, SumTotal, Saba, with a few suggesting Halogen, Peoplefluent, and others. In short, someone is going to buy something else.

The Meaning of the Deal?

What does this mean we all asked, much like the tale of the Blind Men and the Elephant as was suggested by the leading light Naomi Bloom. Early viewpoints on the acquisition included:

  • Continuing IBM’s move into social media and analytics
  • Continuing IBM’s move into professional services including strengthening RPO
  • Disrupting the HCM market and becoming a talent management player
  • Delivering value to the HR executive
  • Delivering value to the C-suite and bypassing HR
  • Primarily being a HRO deal with some software attached
  • Primarily being a software deal with some HRO attached
  • Upping competition with SAP, Oracle, Salesforce.com, and even Workday
  • Selling into Kenexa’s IBM-like customer base of Fortune 500 clients.

IBM’s news crossed many markets including HRO, HCM, HR tech (software, platform, cloud, etc.), BPO, social media, talent management, and financial and market analysts. Each commenter viewed the same information through the lens of their personal perspective and professional interest, much like the blind men touching different parts of the elephant.

With so many options before it, including IBM’s own announced intentions for the addition of Kenexa, the opportunities are new and exciting. Given the inherent complexities, IBM will face many risks as well. Look for more on The Parable of IBM and Kenexa coming in Part II.

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H1 2012 HRO: Who Did What in the Large Market?

August 15, 2012

Linda Merritt, HRO Research Analyst, NelsonHall

There was a good amount of announced HRO contract awards of many sizes and services in the first half of 2012, especially in the large market. A nice volume of new work coming online will provide future revenue support for HRO service providers, where earnings have recently been lower than in 2011.

Learning: finally announced some major deals including:

  • Capita Workplace Services: awarded a competitive win for a £250m contract by the Cabinet Office to manage civil service training services in the U.K.
  • Serco: won awards with the Army in both the U.K. and the U.S.; it won a scope extension valued at $38m by the U.S. Army and a £55m training contract by the British Army
  • Genpact: won  a learning services contract by Johnson Controls, extending its record of recent learning wins; last year, it won a 7 year MPHRO contract with Nissan that included learning and it also won a 5 year content development contract by JobSkills in India.

MPHRO: activity was spread around nicely with ADP, Aon Hewitt, NorthgateArinso, and Logica all bringing in MPHRO contracts. One notable deal was IBM’s multi-tower BPO and IT deal with Cemex valued at $1bn; it includes finance and accounting BPO, HR BPO, IT infrastructure management, application development, and maintenance.

RPO:  continued to see a high volume of new contracts spread across many vendors. There were also two of the largest awards ever in RPO:

  • ManpowerGroup: awarded a $400m five year contract extension with the Australian Defense Force, continuing a relationship that started in 2003
  • Capita: won a £440m 10 year recruiting partnership contract by the British Army; it will also deliver supporting technology for the Royal Navy and the Royal Air Force, partnering with advertising agency JWT for recruitment marketing and with Kenexa for assessment and recruitment technology.

Benefits administration: contract awards were announced by Aon Hewitt, Empyrean, HP, and Xafinity Paymaster. Fidelity Investments reported the highest volume with DC contracts adding 522k new participants to its base of over 15m participants served. It also made major renewals and brought in new competitive wins. This is Fidelity’s strongest first half sales period in the last five years.

Payroll: deals in the U.K. led the way with awards going to Ceridian, Equiniti ICS, Liberata, and Mouchel. ADP won a multi-country contract from HP and will implement its GlobalView for payroll and Enterprise eTIME system for time and labor management for ~130,000 employees across 40 countries in Asia Pacific (excluding India), Europe, and the Americas (excluding U.S.) over the next five years.

With pipelines still healthy, the second half of 2012 should bring in a year of solid HRO growth and results. Congratulations to all!

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HRO Carrying On Despite Slow, Decelerating Economy

July 25, 2012

Amy L. Gurchensky, HRO Research Analyst, NelsonHall

For those of you who are not aware, NelsonHall assesses the confidence in the HRO market on a quarterly basis. The report involves surveying HRO suppliers from all disciplines to get a pulse on the market.

 From time to time, my colleagues and I will blog about these results. I thought I would take a step back and re-examine HRO supplier confidence levels since the report began.

 As the name suggests, the supplier confidence level measures how confident HRO suppliers are in the future market with a level of 100 representing no change in confidence.

Since the report began, the index has constantly shown a healthy level, despite some fluctuations in between. The following chart graphs HRO service provider confidence levels since its inception.

HRO Supplier Confidence Chart

2011 shows a major turning point in HRO vendor optimism, revealing a downward trend line that coincides with the Employment Situation report produced by the Bureau of Labor Statistics.

There is no need to panic though. It appears that supplier expectations are now more accurately aligned to pipeline activity, which showed a slight weakening in Q1 2012. Again, the most important thing to remember is that the indices are still at a healthy level.

Despite the headwinds from the economic recovery, business for HRO has carried on as evidenced in the following contract activity:

  • ADP: awarded a multi-country payroll contract by HP covering ~130,000 employees in 40 countries across Asia Pacific (excluding India), Europe, and the Americas (excluding the U.S.)
  • Fidelity: awarded a DC administration contract by the University of Washington for ~31,000 employees; it is now the sole recordkeeping provider for the university
  • Talent2: awarded a three year RPO contract by Bankwest in Australia providing full RPO services from job requisition through onboarding including employment branding, establishing an innovation program for sourcing, and more
  • IBM: awarded a learning services contract by a government entity in South Africa including content development and delivery of learning
  • Aon Hewitt: renews and expands its multi-process HR outsourcing contract with BMO Financial Group for payroll, workforce administration, H&W administration, recruitment services, and compensation administration covering 46,000 employees in the U.S. and Canada for eight years.

There will likely be continued challenges from clients such as stalled decision-making or demands for lower pricing, and some service lines will fare better than others in this slow economy that is decelerating.

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The Logic in Logica’s Focus on MPHRO

July 16, 2012

Linda Merritt, HRO Research Analyst, NelsonHall

Logica has long been an HRO service provider in the U.K. and Europe. With much of its HRO revenues from payroll, it has been a bit quiet on the multi-process HRO (MPHRO) front. So I wasn’t sure that I saw the logic in Logica’s increased investment in MPHRO capabilities, especially when there are other major MPHRO players already in the economy-constrained market.

The HRO group at Logica recognized the developing opportunity for MPHRO as some buyers, especially second generation HRO users and multi-country businesses, began to want more than just transactional low-cost contracts. This created space for an HRO partner to help clients transform HR to increase business and workforce agility in responding to rapidly changing market conditions.

Logica is emphasizing its transformational HRO capabilities by:

  • Assisting organizations to align their HR objectives and services with those of the wider organization and manage HR against business goals such as increased employee engagement
  • Change management and ensuring that change management is both carried out up-front and carried through to a detailed sub-process level using service simulations to promote operational change as necessary
  • Composing a common HR process taxonomy to be used as a common language across both outsourced processes and the retained HR processes
  • Program management and its real-time PMO tools.

In terms of process design, the company is looking to use a set of standard Logica HR processes for Logica-delivered processes; for client-retained HR processes, it will provide workflow tools. Logica is also looking to encourage innovation beyond minor process improvements by establishing jointly managed innovation funds and innovation groups with its clients.

In technology terms, Logica currently supplements Oracle’s PeopleSoft HCM 9.1 and Oracle’s E-Business Suite with specialist HR applications where necessary. It may also consider SAP-based HRMS implementations downstream.

To date, the investments are starting to pay off. BPO, including HRO, was the fastest growing segment for Logica in FY 2011, up 23.8%. In the last 12 months, Logica has also been awarded several major MPHRO contracts including:

  • BAE Systems:  a six year contract supporting 33,000 participants in the U.K. with a new single-tenant, hosted Oracle HR platform; payroll services; absence and attendance; employee care; and administration services in support of talent management functions including recruiting and learning
  • Ahold, a Dutch headquartered supermarket retailer: a nine year contract supporting ~100,000 participants in the Netherlands, Slovakia, and the Czech Republic with a new Oracle PeopleSoft 9.1 platform; HR administration services; HR service desk; and payroll services, which will be subcontracted to ADP.

Other MPHRO contracts were awarded by a British telecom and a Swedish financial services firm, both for five years.

Logica is well underway working its five year roadmap for services development, which includes strategic new services, increasing its partnership ecosystem, and practical elements like adding more mobile apps. Logica is also a relationship-focused partner, and that trust factor, along with results realization from the new wins, will help it continue to grow in MPHRO. Logical indeed!

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Asia Pacific, Talent2, and HRO

June 15, 2012

Asia Pacific is the emerging market of the most interest to HRO service providers, especially RPO vendors. Most of the big names in HRO/RPO are building or expanding scale there to take advantage of the higher than average growth rates. ADP and NorthgateArinso are well-established in the region, and Futurestep, GP, Kenexa, ManpowerGroup, Mercer, and Towers Watson have all made recent acquisitions in China, Hong Kong, India, and Australia as the fastest way to get more feet on the ground in this expanding market.

Still considered an emerging market, some Asia Pacific countries are already mature including Australia and Japan, while others are truly experiencing the first rush of growth. Each country has different needs and challenges and HRO service providers need to bring a lot of service line experience and local knowledge to the table. While one industry needs a high volume of entry-level employees to meet demand, another, a bit further on the maturity scale, needs management-level employees with the experience to manage and continue growth of a more complex enterprise.

Newer entrants should not forget that there are regional providers already on the ground; one of the largest is Talent2, which covers the entire area and a bit beyond. Talent2 has continued its solid pace of contract wins across the Asia Pacific region. An example from the public sector is contractor procurement and management for 13 agencies of the Queensland government. In the private sector, contract wins included payroll, RPO, and learning, and cover Australia, China, Hong Kong, Japan, Malaysia, and even the Middle East.

With ~1,700 employees, Talent2 supports 30 countries in 30 languages from its 46 offices and service centers located across 19 countries. With its scale and services it should be no surprise to find that Talent2 is, according to NelsonHall, the HRO leader in Asia Pacific.

Perhaps it is reasonable then that Talent2 has attracted interest from investors wanting to take it private. Morgan & Banks Investments (MBI) and Allegis Group have entered into an agreement to acquire the company, which will remain operationally as Talent2 if the deal is successful. MBI represents current major stakeholders and Allegis is already a Talent2 RPO partner. It will be interesting to see if privatization allows Talent2 to fuel even more growth in and outside of the Asia Pacific region.

Linda Merritt, HRO Research Analyst, NelsonHall

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Employment Branding: Business, Culture, and HRO

May 25, 2012

Yesterday, I participated in a very lively online Twitter discussion about employment branding. Branding is a common topic for businesses, particularly for corporate, product, and service identities. Employment branding is important to ensure the attraction and retention of employees that can deliver the business brand experience. Meghan M. Biro’s brand humanization concept is that it is all connected: the business brand, its culture, and its ability to attract and retain talent. That connectivity is a business opportunity for HRO, think RPO and employment branding services, and it is also an issue for HRO service providers as employers.

In an earlier blog this year, I concluded that HRO will not hinder and may even help clients achieve human capital leadership, using leadership and best place to work awards as evidence. Diversity award lists from DiversityInc.com and Diversity MBA magazine have just come out for 2012 and again we see recognition of HRO service providers including Accenture, ADP, and IBM, as well as many companies that use HRO. Here are examples from the world of RPO:

  • Alexander Mann Solutions: Citi and Deloitte
  • Futurestep: General Mills and Kaiser Permanente
  • KellyOCG: GE
  • Kenexa: Verizon and U.S. Navy
  • ManpowerGroup Solutions: Wells Fargo
  • Randstad SourceRight: AT&T and Capital One
  • The RightThing, an ADP Company: Kellogg and WellPoint.

As part of my long running theme on talent management, I believe strongly that HRO vendors can and should be leaders in creating the agile workforces of the future. Part of being a leader is practicing what you preach, which is largely what corporate and employment branding is about.

In HRO service providers often need to scale up and scale down quickly, while still ensuring a full slate of experienced subject matter experts. On top of that, many HRO service providers base client care centers and processing centers in talent competitive markets, which often stimulates high turnover and brings together workforces from very different cultures. This is the second challenge of employment branding for HRO, as employers, each service provide needs to build a differentiated employment brand and corporate culture to attract and retain the talent needed to fulfill its business brand.

Part of developing an employment brand is determining what attributes make a particular employer a good place to work and developing programs to ensure those elements are in the workplace and recognized by current and prospective employees and are aligned with business outcomes. Sounds simple, but it surely isn’t.

Buyers, ask your HRO service providers about their workforce practices to see if they practice what they sell. Service providers, in addition to client testimonials, engage and leverage your own employees as brand ambassadors.

Linda Merritt, HRO Research Analyst, NelsonHall

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