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

Welcome to 2010 and the Rise of the HRO Services Portfolio Manager

As we were moving quickly toward 2010, most leading firms in the services delivery industry were asked to make predictions for the year ahead, what trends will continue and in what new directions will we go tomorrow. NelsonHall’s (per Gary Bragar and me) HRO predictions will be published in the next issue of HRO Today magazine, and mine is already available in the Shared Services & Outsourcing Network’s article, The Year Ahead: 2010 in Shared Services & Outsourcing.

I firmly believe achieving HR services excellence today does not begin with the question of outsourcing or shared services. Rather, the question is what is the optimum mix of outsourced, shared services-based and locally delivered HR services given the current and going forward needs of the business? As a result, I see the possible, and needed, rise of a new type of HR executive…the HR services portfolio manager.

The HR services portfolio manager is a business and HR leader who blends a review of business plans and HR initiatives with internal capabilities and costs to develop a strategic plan to manage the total cost of ownership for the entire portfolio of HR services, while maximizing HR’s efficiency and effectiveness and its impact on the business. The HR services portfolio manager partners with the HR executive to gain funding and the buy-in of stakeholders.  

Another role of the HR services portfolio manager is that of HR services delivery architect. Here the responsibility lies in building out in phases the “Lego” mix and match service delivery model to ensure it is all seamlessly integrated and managed, and providing the required service quality, cost and performance. The requisite skills and competencies for this role are that of a technology leader, a vendor manager and an HR-savvy operations manager. 

While this new role represents a new possible direction rather than a solid current trend, I saw signs of it as early as 2007, and have continued to seek and see peeks and parts since then. For example, I met a European executive who was managing a large scale multi-function outsourcing portfolio, and a U.S. executive who was brought in to manage a large and challenging scale HRO engagement and help revise the retained HR services. Both were non-HR business executives.

A more rare peeks and parts sighting is the metamorphosis of existing shared services leaders into portfolio and delivery architects. The financial pressures of the recession have helped with the growth under fire of some of the skills and competencies needed for the full emergence of the HR services portfolio manager.  

Whether this describes one HR superstar, or team capabilities, we are not talking about quiet “factory” managers toiling out of the way in the back-office, taking out a few more pennies here and there. We are talking dynamic executive talent that impacts the lion’s share of the HR spend, and accelerates HR’s delivery of business results.

Happy New Year!

Linda Merritt, Research Director, HRO, NelsonHall