Posted tagged ‘business value’

Building HRO Business Value

July 27, 2011

The hockey great, Wayne Gretzky, said “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”HRO service providers and HR leaders each dream of demonstrating business value. There lies strategic relevance and pricing options above commoditization, as well as long-term relationships.

To continue our search for guideposts for the journey, this week we’ll take a look at NorthgateArinso’s 2011 Talent Management Survey. The survey analysis highlights the need for talent management(TM) tools that are integrated with workforce data to gain optimum advantage. Sixty-one percent of the global organizations surveyed have at least one TM program installed, but 64% do not have the TM tool(s) integrated with their HRIS for workforce and payroll, missing out on rich and relevant data sources.

The study also provides hints on where HR and HRO need to “skate” to be great and not just good. Overall, 60% of the respondents agreed that HR contributes to the company’s development and transformation capacity on a daily basis. Looking at data for only HR respondents, the number increased to 82%. HR sees itself as further along than other business leaders. I have always said that strategic is what your senior executives say it is – so know where their strongest interests lie to close the gap.

TM elements include performance management, succession and career planning, recruiting and staffing, compensation, and learning. Certain TM elements are of particular interest as 90% see the identification and retention of top talent as business critical for the next three years, making performance management, succession, and career planning of top concern. Also, TM is considered most critical in areas including sales, marketing, and customer relations, as well as R&D. The TM focus varies by company size. Smaller companies are concerned about enabling growth and larger companies are more focused on the strategic alignment of HR as a driver in the fulfillment of business objectives.

Moving into the TM space will be increasingly important for multi-process HRO providers. Whether the TM tools are built in-house, come from major ERP sources, or are well integrated from a leading supplier partner matters less than that the tools are present and well-supported.

There is a myriad of TM software companies that specialize in one or more TM elements. Few TM software providers currently offer a full suite of TM tools that equal some of the best single solution systems for compensation or learning, for example. There is more HRO value in combining tools and services, and if you can add consulting as well, even better. There needs to be a plan on how to bring all elements together across vendors and technologies or even the silos within HR.

Clients, whether you go best of breed with multiple vendors or use a fully integrated system from one, do you have the HRO partners that will help you advance in the journey to full business value creating strategic partnership?

Linda Merritt, Research Analyst, HRO, NelsonHall