Posted tagged ‘Convergys’

NorthgateArinso Getting SaaS-y Starting with e-Learning Content

September 28, 2011

NorthgateArinso (NGA) has just announced its euHReka Inclusion Framework to provide transparent access to third party providers, HR professionals, and associated resources.  The euHReka platform includes payroll and talent management SaaS for learning, recruitment, performance management, compensation management, and succession planning.  It serves 80 clients and 800,000 employees, and is available in 100 countries and 32 languages.

Although NGA has been providing learning BPO (LBPO) since its acquisition of Convergys’ HR Management business in March 2010, and since learning is already a part of its euHReka platform, the company is aware of the heightened demand for e-learning content in the market.  Consequently, NGA’s first partnership on the new framework is with SkillSoft to add e-learning content to euHReka.  Subsequent content and applications will include:

  • Compensation data
  • Benefits programs
  • Job boards
  • Professional social networking sites.

NGA is wise to begin with e-learning.  In NelsonHall’s LBPO market analysis, published Q4 2010, traditional instructor-led classroom training (ILT) is expected to be reduced from ~50% of the market in terms of revenue to 40% by 2012 due to the explosion of e-learning.  As a result, content development is also rapidly growing.  NelsonHall’s LBPO report ranks content development second behind learning administration in terms of LBPO revenue and ahead of delivery, technology, and consulting. 

Some examples of e-learning contracts this year include:

  • Accenture with HSBC
  • Genpact with JobSkills in India for a 5-year content development contract (note: approximately 85% of Genpact’s courses are provided via e-learning)
  • Edvantage Group with Yara International for safety e-learning (note: Edvantage Group’s H1 2011 financial results showed a 31% increase in sales and double-digit revenue growth y-o-y with EBITA increasing 168% to 5.9m NOK, compared to 2.2m NOK in H1 2010).

I believe we will continue to see significant increased demand for e-learning content for years to come, which will be further magnified by mobile learning (i.e., m-learning), especially for accessing content for self-paced e-learning when out of the office.  However, e-learning will not replace the uptick expected for virtual instructor-led training (VLT) because of the need to actively participate and focus on the learning task at hand in VLT.  I’ll write more about contracts for VLT and web 2.0 learning portals at a later date.  In the meantime, further analysis on the useage of e-learning by region and other associated information is available from NelsonHall.

Gary Bragar, HR Outsourcing Research Director, NelsonHall

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HRO: Are you Violently Good at the Talent Process?

August 19, 2011

In following up on my recent talent management (TM) blog, Building HRO Business Value, I spoke with Marianne Langlois, Global Process Executive with NorthgateArinso (NGA).  Marianne agreed that TM has been on the back burner for many companies, but now she sees growing interest. It may even be that TM is one of several paths to climbing out of crisis.

With several lost years, simmering issues of an aging skilled workforce and new generations entering the workforce are heating up. Surveys show that succession planning has become a critical concern of senior business leaders. Creating succession plans is fine, but there is too often a cycle of identifying and/or hiring top talent and then losing them within two years.  If this is happening, then whether the tools and processes are home grown or “best of breed” doesn’t matter because they are not adding full value to the business.

We do not need to make the case here for the value of a holistic and integrated talent management system and process supported along with, as Marianne says, HR partners who are “violently good at the talent process.” We do need to discuss how to get there from where many companies are now: scattered with underutilized tools, disconnected processes, islands of related data, as well as what roll HRO plays.

For NGA, the underlying HR system is key because it helps bring all of the data together to monitor and manage talent and workforces across the enterprise. Core HRIS and payroll is a necessary part of the whole, and the sooner the base is considered, the faster and more direct the value added TM services can be built. With today’s many HR system options, TM can be added now or later as a module, hung off the side as a specialty system, or even connected via a cloud-based SaaS application.

In this environment, are organizations willing to do more than talk? Yes. For example, a major global pharmaceutical company is working with NGA to build the integrated TM platform it needs, including letting go of their earlier investments in TM systems that were not connected or fully used.

Renewals are a great opportunity for TM. NGA is working with major clients that came with the Convergys acquisition last year on plans for the future. Fifth Third Bank will be continuing with NGA for another seven years and it will also be moving to the next generation of HRO services based on SAP HCM and euHReka.

With clients looking for integrated and streamlined systems and data across the enterprise and around the world, vendor, product, and service selection need to keep glob-ability in mind. Can you get a unified view of your top talent and their compensation, appraisals, laterals and promotions, as well as development plans and activities?

Linda Merritt, Research Analyst, HRO, NelsonHall

NorthgateArinso Proving Success with Legacy Convergys Clients

June 23, 2011

When NorthgateArinso acquired Convergys’ HR management business in March 2010, my first reaction was that this was a really good deal for NorthgateArinso because it would be gaining some big brand name clients in the U.S.  Some wondered whether NorthgateArinso would be successful in retaining these legacy clients, but I was optimistic for two reasons.

First, it is mainly the same legacy Convergys employees supporting these clients, most transferred to NorthgateArinso with the acquisition.  It is well-known that the most successful ingredient in an outsourcing relationship is how well the client and service provider can work together and have an effective relationship / partnership.

Back in October 2008, I attended the Convergys Industry Analyst Day in Cincinnati where Thomas Neltner, VP of HR at Fifth Third Bank, was a guest speaker.  Thomas spoke about why Fifth Third chose Convergys, its services outsourced, and benefits obtained, including 99% utilization of employee self-service and 40,000 transactions turned paperless.  So it is no surprise to me that this week Fifth Third agreed to extend its contract with NorthgateArinso for an additional seven years.

The original contract with Fifth Third was signed in October 2003 for five years.  Services provided to the bank’s 20,000 employees included:

  • Payroll administration and processing
  • Compensation administration
  • Performance management support
  • Benefits administration
  • Time and attendance management
  • Implementation of recruitment technology and a self-service web portal.

In May 2007, the contract was extended for an additional five years for 21,000 employees and services were added including recruiting and specialized staffing and employee and manager self-service.  Now, the seven year extension through 2019 also includes upgrading the banks current SAP HCM platform to NorthgateArinso’s euHReka technology platform.

euHReka is also based on SAP but is a preconfigured multi-tenant platform that is fully integrated in providing HR and payroll services. In addition, it is used as a multi-country payroll solution, although that won’t be needed with Fifth Third, but you never know what the future may bring, which brings me to the second reason why I was optimistic about NorthgateArinso’s ability to renew legacy Convergys clients.  That is, similar to how customer service is a core competency of legacy Convergys, the same is true for technology and systems integration at NorthgateArinso.  This is a strong combination that NorthgateArinso can capitalize on when other contracts with marquee clients such as DuPont and Johnson & Johnson come up for renewal in the years ahead.  It will also help with winning new business!

Gary Bragar, Lead HRO Analyst, NelsonHall

HRO Can Help Stem Absence Management Cost Hits – But There’s More

October 21, 2010

A recent CyberShift survey found that one third of the 1,088 respondents cited absence management as a continuing top priority. Yet 53 percent of the survey participants stated they did not have an automated system in place for absence, leave, vacation and FMLA tracking. This is a pretty scary statistic, especially when, per CyberShift, unscheduled absenteeism can cost businesses more than $760,000 per year in direct payroll costs alone.

At the same time, forward-thinking buy-side companies over the past couple of years have awarded absence management contracts to HRO providers, and the vendors are beefing up their absence management offerings. Let’s take a look.

Absence Management Contracts

  • MidlandHR was awarded 10 contracts in the last two years for its iTrent HR and payroll software, including its absence management modules, by the University of Exeter, Capel Manor College, Oxford City Council, NetworkersMSB, Pentagon Investments, Preston College, Which? (yes, this is an actual company name), Manchester Fire and Rescue, Kent County Council and Farnborough College
  • Wipro implemented Oracle’s PeopleSoft Enterprise HCM 9.0 for Jammu & Kashmir Bank in India. Modules implemented include absence management and approval workflow
  • NorthgateArinso won a five-year contract with Hastings College for its ResourceLink HR platform, which supports absence management
  • Convergys entered into a five-year contract renewal for multi-process HRO services with a leading business services company; components of the contract include absence management and leave administration
  • Hewitt was awarded several unnamed contracts that include absence management
  • Raet won a 10-year contract with OSG for its online HR portal, which includes absence management

Providers’ Enhanced Absence Management Offerings

Just a couple of weeks ago, Capita acquired FirstAssist Services Holdings Ltd. to strengthen its capabilities in health and workforce management, including absence management. In January, Hewitt added participant advocacy services to its absence management offering. In August, Ceridian added Presagia’s employee leave management software to support its leave management services. And Xchanging announced an alliance with absence management specialist FirstCare through which the two parties will jointly go to market with FirstCare’s absence management and occupational health pre-employment screening services and Xchanging’s portfolio of HRO services.  

Here’s my take. Leveraging software and services for absence management tracking is a great step in the right direction when it comes to stemming costs. But equally, if not more, important is drilling down into the why’s of non-authorized and non-sick absences. This maps to blogs I’ve written over the past year that focus on rampant employee dissatisfaction. Unhappy employees are more inclined to call in sick simply because they don’t want to go to their jobs. Get to the heart of employee dissatisfaction, fix what is truly broken across the enterprise, and absenteeism will decrease. Strong leadership and performance management training is invaluable in helping determine the root of employee discontent. Corporations lacking internal training programs of this type can leverage offerings from both full-scope and pure-play learning services HRO providers.

Gary Bragar, Lead HRO Analyst, NelsonHall

The Next Shore for HRO – Finding Cultural Compatibility

September 1, 2010

HRO clients have become more open to multishoring to gain cost, scalability and flexibility advantages. And as the major HRO vendors have globalized their service delivery capabilities, some portion of the work is increasingly likely to be done offshore in order for their clients to benefit from optimized services. 

Voice services have been the most challenging area to find culturally compatible locations with a scalable English speaking talent base. According to the new NelsonHall market research report, “BPO Delivery from the Philippines,” the Philippines is a growing location for both voice-based and back-office BPO services, with more than 386,000 personnel across a growing number of service providers. The largest segment by far is customer management services for the U.S., with F&A, especially order to cash outsourcing, as the next largest.  Major BPO vendors, including Convergys, IBM, Infosys, Logica, NorthgateArinso and Wipro, are already there.

HRO services are there as well. HRO is a small, but growing, portion of the service base in the Philippines. The top HRO services supported are employee care and payroll.  With HRO service providers using sophisticated workflow technology and processes, portions of service lines can be handled from just about any location. In the Philippines, initial screenings for RPO, and enrollment and inquiries for learning BPO are supported, as are employee data management, benefits administration and mobility services.

Right now services from the Philippines are highly centered on the U.S., followed by Canada and the U.K. Future growth is expected from English-speaking Asia Pacific countries like Australia and New Zealand. In addition to organic growth for the services already located there, healthcare from both the payer and provider sides is seen as a good opportunity for expanded services.

Latin America is also growing as a BPO region. I recently spoke with country representatives from Chile and Jamaica, and both countries would like to add HRO to the other BPO service lines already migrating to Latin America as it grows as a near shore region and as its own market.

The HRO community can look forward to a wide range of shoring options and cost points. The HRO back-office location will increasingly be by vendor choice, and less and less visible to clients. HRO voice services will remain a client decision to balance cultural compatibility, scalability, flexibility and cost.

Linda Merritt, HRO Research Director, NelsonHall

Benefits Administration – Not a Lame Duck HRO Process

August 5, 2010

Although we’ve indicated that our most recent HR Outsourcing Confidence Index found benefits administration lagging behind other HR services in terms of revenue and pipeline growth, it’s important to put that into proper context:

• On the NelsonHall HRO Confidence Index scale of 1 to 5, with 5 being “strong increase” and 3 being “unchanged,” benefits admin came in at 3.6 relative HRO growth, right behind learning (3.7), and multi-process and payroll (both at 3.8)

• Benefits admin outsourcing contracts are indeed being won in 2010

For example, Mercer announced today that it added 10 new benefits admin clients – a mix of defined contribution, health and benefits, and total benefits/total retirement outsourcing – to its portfolio in 1H10. The new deals include leading brands such as CBS Corporation, Primerica and Global Equity Capital, LLC. In total per these new agreements, Mercer is now servicing nearly 190,000 additional benefits admin participants.  

Additional benefits wins announced in 2010 include:

• Xafinity, for pension administration, by BAE and Loganair

• Workscape, for both its Outsourced Benefits Administration (OBA) web-based benefits administration service and for employee call center support, by Global Imaging Services, a wholly owned subsidiary of Xerox

• Workscape, for its OBA solution, by kgb, a multi-country directory assistance and information services company

• Convergys, a contract renewal for COBRA, leave of absence and annual enrollment services, by Office Depot

And benefits is not just being awarded as a standalone service. Rather, it continues to be provided along with multi-process HRO services. For example, Ceridian earlier this year was awarded a contract by Fifth Third Processing Solutions which included payroll, health and welfare administration, HR compliance, time and attendance, leave administration and learning and recruiting technology. And Hewitt and International Paper entered into a five-year contract renewal deal which covers payroll, workforce administration, health and welfare administration, recruiting support activities, SAP application support and help desk services, call center and HR manager support activities, learning administration and flex staffing management services.

As clients continue to seek reduced costs, ensure compliance with health care reform, increase employee satisfaction, better leverage technology, and improve delivery of services to employees – including self-service capabilities – I believe we will see continued growth in benefits admin outsourcing. NelsonHall is currently conducting a Benefits Administation Market Study. When it’s complete we’ll take a deeper-dive look at just how much it’s growing, and in which specific areas.

Gary Bragar, Senior HR Outsourcing Analyst, NelsonHall

HRO Total Contract Value Jumps 38 Percent in 1H10 – Where are the Gains Coming From?

July 15, 2010

During our Quarterly BPO Index webinar last week, NelsonHall CEO John Willmott reported that HRO total contract value (TCV) revenue increased 38 percent in 1H10 in a year-over-year comparison to 1H09. While HRO’s gains weren’t as great billions of dollars-wise as other BPO segments such as multi-process or industry-specific BPO, it is good to see the start of an upturn.

So where are these gains coming from? Forty-five percent of the contracts were signed with North American organizations, 43 percent were awarded to European enterprises (of which two-thirds were based in U.K.), and organizations in Asia Pacific accounted for the remaining 10 percent. And by service type:

• Recruiting – 32 percent of deals – including contract wins by Hays, Manpower, Kenexa, OchreHouse, Pinstripe, CPH Consulting, Alexander Mann Solutions, The RightThing, KellyOCG and PeopleScout

• Payroll – 22 percent of deals – including contract wins by Capita, MidlandHR, Raet, NorthgateArinso, ADP, TDS and Ceridian

• Benefits Administration – 20 percent of deals – including contract wins by Workscape, Aon, Secova, Mercer, Convergys and Xafinity

• Multi-process HRO (MPHRO) – 14 percent of deals – including contract wins by Accenture, Ceridian, ADP, Xchanging and Hewitt

• Learning – Eight percent of deals – including contract wins by Edvantage Group and General Physics

• Other HR – Four percent of deals – including talent management-related contract wins by Kenexa

Overall, I was not surpised with the above breakdowns as they were very consistent with the predictions in our June 2010 quarterly HRO Confidence Index.

Digressing a bit here to add to the buzz about Aon’s acquisition of Hewitt…while much written and water-cooler discussed has been about benefits administration, a sizeable amount of Hewitt’s revenue comes from MPHRO. A good example of this is Hewitt’s five-year contract renewal with International Paper, announced in April 2010.The renewal will support 40,000 International Paper employees with payroll, workforce administration, health and welfare administration, recruiting support, SAP application support and help desk, call center and HR manager support, learning administration and flex staffing management services. Given the amount of revenue coming from Hewitt’s MPHRO client base, I believe Aon will not only happily want to continue to support these existing clients, but also want to continue to grow the MPHRO business.

Although most new MPHRO contacts will likely not be the mega deals of yesteryear, reducing the number of suppliers in the outsourcing portfolio continues to grow in appeal among buyers. If buyers are satisfied with their MPHRO deals, they will continue, albeit in smaller fashion, to benefit both buyers and providers.

Gary Bragar, Senior HR Outsourcing Analyst, NelsonHall