Posted tagged ‘HCM’

ADP’s Meeting of the Minds, not just an Ordinary Event

March 19, 2012

I attended ADP’s Meeting of the Minds (ADP MOTM) that happened last week March 11 to 14 in Dallas. This was my first time attending, and I didn’t quite know what to expect until I arrived—well, how about ~900 enthusiastic ADP clients. This is an annual event of which ~30% of attendees were first timers.

Sure, there were a few ADP presentations and demonstrations on ADP’s latest products and services, but many of the sessions were not conducted by ADP and were instead facilitated by HR practitioners and clients. Professional development would be a good way to summarize it. As they say, everything is bigger in Texas—how about ~170 sessions that you could attend to learn about everything from Healthcare Reform to Payroll taxes, to RPO, to best practices across a number of services, and functions including shared services, recruiting, change management, etc. There were also hands-on training sessions, of which I attended Learning, part of ADP’s Talent Management.

I could write my entire blog talking about the keynote speaker, Emmitt Smith, and the fun social events, but I’ll shift gears to talk about HRO to keep with our blog focus.

To begin, it’s important to share ADP’s three priorities, as stated by CEO Carlos Rodriguez, that are important to advance ADP as a:

  • Technical leader
  • Service leader
  • Global leader.

Regina Lee, president of ADP’s national and major accounts, GlobalView, and ADP Canada, spoke about four key areas of investments that were made by ADP:

  • Integrated Human Capital Management: including Vantage HCM and Workforce Now
  • Talent Management: including the integration of performance management, succession planning, and learning. ADP’s talent management platform has over 100 clients
  • Benefits Administration and Healthcare Management: having acquired Workscape in 2010 to strengthen ADP’s benefits administration capability, in addition to Workscape’s talent management and compensation capability. On March 8, ADP announced it has entered into an agreement to acquire SHPS Human Resource Solutions (rationale is below)
  • HR BPO, including the acquitisition of The RightThing in October 2011 (further details below).

I’ll finish my blog focusing on Benefits Administration and RPO.

The Workscape acquisition has proven to be a success, with ADP adding ~100 additional benefits clients annually. SHPS will further strengthen ADP’s benefits administration offering with capabilities including:

  • Eligibility and enrollment
  • Spending accounts administration
  • COBRA administration
  • Absence management
  • Benefits advocacy.

SHPS will strengthen ADP’s leave administration and reimbursement account administration capabilities, including HSAs and HRAs, which have become increasingly important as more employers offer high deductible benefits plans to their employees. You can read about this in my recent blog.

The RightThing – coming off its best year in 2011 – was ranked by NelsonHall in its 2011 RPO report as the top U.S. RPO provider in terms of North American revenue, bringing in ~80 clients. Prior to the acquisition, ADP provided recruitment administration and technology, but it is now a full end-to-end RPO services provider. Expect an RPO contract announcement soon and much more to come as RPO will continue to be provided as a standalone service and now also in combination with ADP’s multi-process HRO services.

Gary Bragar, HRO Research Director, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

Does HRO Help or Hurt in Achieving Human Capital Leadership?

February 24, 2012

Can employers be recognized as leadership development advocates and a great place to work and still take advantage of HRO services? Yes—and recent “best companies” announcements provide plenty of examples.

Fortune’s annual 100 Best Companies to Work For list includes a number of companies known to use HRO services. RPO examples include: American Express (Hays RPO), Edward Jones and Intuit (Manpower Group), Microsoft and Novartis (Alexander Mann Solutions), and SAS and Telefonica (Ochre House). Accenture, which provides HRO services, is on the list as an employer.

HRO clients are also among the recognized companies in the 2011 Top Companies for Leaders, another recent Fortune study in association with Aon Hewitt. PepsiCo (Aon Hewitt) and Unilever (Accenture, IBM) are among the multinationals taking the lead in developing leaders. Again we see RPO as a common talent management service selection; Eli Lily and Novartis AG (The Right Thing, An ADP Company), GE and Siemens AG (KellyOCG), and Whirlpool (Kenexa). IBM, another major HRO player, is recognized, as is Wipro. Accenture is noted on the U.S. list and Infosys is on the Asia Pacific list. ADP is included in the 2012 list of 10 Best  Companies for Leaders rankings by the Chief Executive.

Business Today has just released its 11th annual “Best Companies to Work for” in India and top companies include HRO providers such as Accenture, IBM, Infosys, Wipro, and TCS. Honeywell International (SourceRight Solutions) also made the list and is on the U.S. list for Leaders as well.

The lists go on and on and you will find companies that use HRO as well as HRO providers among the best of the best. You can be a pioneer in leadership development and use HRO in critical talent management areas. You can achieve greatness in any region of the world. You can even look to some of the HRO providers to share their own expertise as a “best company” in the human capital leadership arena.

Will HRO automatically make you the best company? No. However, HRO will not slow you down and may even provide a committed partner in accelerating your success.

Linda Merritt, Research Analyst, HRO, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

HRO 2012 Trends – The Evolution of Talent Management

January 12, 2012

The NelsonHall HRO team is pleased to once again contribute the annual HRO Today thought leaders forecast of trends that will influence the year ahead. ‘Artful Predictions’ covers a range of topics with talent management (TM) as one of the highlighted trends. We have covered the subject of talent management frequently as we see the opportunity for it to become an integral part of HR business process outsourcing.

For some time, I have called talent management a disputed ground and a potentially disruptive force that could shake up the HRO field. Why? This is because TM elements include so much of the human capital management value chain and cross over everything—from HR ERPs, software modules, HRO business process outsourcing, HR consulting and the roles of HR leaders, HR business partners, and internal shared service centers. TM includes performance management, succession and career planning, recruiting and staffing, compensation, and learning. I also include workforce planning and management under the TM umbrella.

In addition to the HR ERP vendors and the specialty TM software providers, there are HRO providers that are also building out their TM capability internally as well as through strategic partnerships and acquisitions.

  • Kenexa acquired BHI (Batrus Hollweg) a TM company. Although Kenexa has developed TM expertise internally, the company has also been enhancing its efforts over the past few years through prior acquisitions that have included:
    • Salary.com to strengthen its compensation management capability
    • The Centre for High Performance Development to further strengthen its leadership development and management training offering
    • Gantz Wiley Research to increase its employee survey research capabilities.
  • Mercer acquired Censeo Corporation to enhance its TM consulting capabilities and online platform of assessment services.
  • Both Kenexa and NGA are partnering with SkillSoft for learning content.
  • In July, Talent2 re-branded itself to simplify its talent management focus.
    • It also became a reseller of Cornerstone OnDemand, most widely used for its performance management, including succession planning and learning modules.
    • Talent2 also added advisory services as a service offering to help clients more effectively deploy the capabilities.

With recruiting as one of the core TM processes, RPO vendors are among the early leaders in developing internal as well as external TM service options. NorthgateArinso has been moving in this area as well, coming from the standpoint of bring it all together into one integrated system and services package. With the acquisition of The Right Thing, ADP signals both a stronger move into RPO and its interest in TM.

The HRO Today article also discusses whether HRO has reached the maturity stage of providing ‘true business value’. I believe that talent management evolving into a full-fledged HRO service with technology-enabled tools, data integration across the full suite of HR data, supported by analytics assistance and consulting is critical to HRO providing true business value results for clients and achieving its own full measure of success as an invaluable industry.

Linda Merritt, Research Analyst, HRO, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

Buy, Build, and Go: ADP Acquires The Right Thing

October 20, 2011

ADP maintains the momentuem of its buy, build and go strategy to become a full service HRO service provider with the acquisition of The Right Thing (TRT). Coming late to the MPHRO game, ADP is wasting no time in becoming a principal player by building out its portfolio through rapid development of proprietary HR technlogy platforms and the acquisition of leaders in adjacent human capital management service lines. (Also see ADP has a Platform for HRO Success.)

By filling in the last major piece of the MPHRO services puzzle, ADP is the first MPHRO vendor to acquire a end-to-end RPO specialist. It will continue to offer its current recruitment administration and technology services and add the option of TRT’s RPO fully featured capabilities including sourcing, onboarding, employment branding, etc. As with the 2010 acquisition of Workscape, this opens up new client markets while maintaining its line of basic services.

The cross- and up-sell opportunities are great, given ADP’s client base of over 500k. The Right Thing, an ADP Company, brings in ~80 RPO clients mostly from the large market and it gains access to ADP’s midmarket client base. ADP adds more of the richer HR services needed by larger and more complex clients, or as Terrance McCrossen, ADP Division Vice President of Startegy and Marketing said, ADP is putting  more HR in HRO.”

The RightThing is first in North American 2010 revenues and fourth globally according to NelsonHall’s Targeting RPO market analysis. The ADP global sales and distribution network will pave the way for faster multi-country growth, one of the hottest trends in RPO, and a long-term TRT ambition.

The enriched MPHRO portfolio, client bases from Workscape and TRT, along with growing acceptance of platform services moving into the large market, all will be fuel for ADP growth. With fiscal year 2011 revenues, ending June 30, at ~$9.8bn.  At that size it takes big moves to noticeably move the revenue meter. The combined ADP will yield an estimated >$10bn in FY 2012.

Major ADP news has been coming out rapid fire, but behind the scenes many of these moves were in the planning, assessment, and dating stage for some time. ADP had been researching its RPO options for as long as two years because ADP understands a company is more than a sum of its parts, portfolio, footprint and net present value. It was also looking for a cultural match in customer dedication and a leadership team that would be open to staying with it longer term because of the increased opportunities to achieve their own goals and ambitions.

The new ADP Human Capital Management additions have a focus on talent management. An important space for HRO, although the usual path is to start with consulting and add outsourcing. I can’t help but speculate that in due time a partnership or acquistion of a HR consulting company may be in ADP’s future.

Linda Merritt, Research Analyst, HRO, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

The HRO Need for an HCM Maturity Continuum

January 26, 2011

HRO service providers need to assess potential and current clients for business development just as clients assess vendors.  Evaluating HR organizational and enterprise leadership human capital management (HCM) maturity would help both buyers and providers select appropriate HRO and technology investments now and in the future.

My hypothesis – HRO vendors have more business development opportunities with a maturing client HR organization and enterprise that values and invests in its HCM capabilities.

For HRO service providers, HR is usually the direct client and knowing HCM maturity of the HR organization and the business is valuable in the initial sale and on-going relationship and revenue growth of the client relationship. Gauging client HCM maturity can guide the HRO services set selection and approach to winning and growing the business – and even determine if the opportunity is worth pursuing.

For HRO buyers, knowing realistically where you are and where you intend to go is important when selecting service providers.  The lowest cost provider of basic HRO technologies and services may meet today’s pressures for cost efficiency, but may not be able to help you improve HCM results and business outcomes in the future.  This can lead to disruptive changes in vendors and technologies or a network of vendors and services that does not sufficiently enable best in class performance for HR or the business.

There are pieces and parts available in many places and in many guises to develop a working HCM maturity model.  A wealth of internal knowledge is waiting to be tapped across the HR and HRO communities as well as within organizations.

Aberdeen Group’s “The 2011 HR Executive’s Agenda” report, which is based on findings from 439 organizations, states that HR is still spending too much time on tactical activities.  At the same time, the uncertain economy and focus on efficiency is the top HCM driver at 52%, which may then focus HR on tactical activities!  HR process standardization and automation are seen as top solutions, providing opportunity for HRO.

The second and third most important HCM drivers at 33% each are also good news for HRO: the return of interest in organic growth goals and perceived scarcity of key skills in the marketplace.  As NelsonHall has reported, increasing spend on RPO has already taken off and there is renewed interest in talent management solutions.

How HR balances conflicting drivers to be efficient and less tactical while investing in growth initiatives and upgrading the talent base may depend on the maturity of the organization itself and the enterprise leadership it supports.  “The 2011 HR Executive’s Agenda” is about and for HR executives, but it is also applicable to HRO and is helpful in understanding elements of HCM maturity.  Are you ready to assess the HCM maturity continuum and align HR service delivery investments with multiple and often conflicting business needs?  If you are, 2011 should be a good year!

Linda Merritt, Research Director, HRO, NelsonHall