The HRO Phrase of the Day – Integrated Ecosystem

Can extensive multi-process HRO (MPHRO) beat a well-managed internal HRIT and shared services organization? I believe it is possible, especially if the MPHRO provider is a leader in achieving integrated services.

I am a strong proponent of strategic HR that includes a strategic plan for HR technology, processes and services. Without that foundation and the business intelligence it can provide, “strategic” HR consulting is operating with one arm tied behind its back. Why limit your ability to drive business results and be viewed as a strategic asset when technology enablement and automation can help you get there?

While specific HRO provider case studies that prove the point are still needed, at the broader level it is possible to show that the investment in and use of an integrated set of HR technologies can make a measurable difference in business results. Set aside a few minutes to study the CedarCrestone 2010-2011 HR Systems Survey.

The CedarCrestone survey is not about HRO, but its messages apply just as much, if not more so, to MPHRO vendors. MPHRO providers need to show: 1) they are farther along the path; 2) offer the best balance of cost, time, effort and return to achieve the HR systems and services that deliver operational excellence at competitive operating expense; and 3) provide the HR platform for strategic talent management, workforce management and workforce optimization that increases the rate of sales growth and revenue per employee.

The HRO community has a moment in time opportunity before it. Some activities taken up as part of addressing the economic crisis need to be reinforced if they are to become part of the new normal in HR and business operations. We saw increased demand for workforce information; who, how many, at what cost and where? As a focus on the future returns, investments will still be lean and need to be targeted to achieve the largest impact – providing an excellent opportunity for strategic HR counsel supported by fact-based data and analytical projections.

The demand is already here, and HR consulting revenues are on the rise. This is an opportunity for MPHRO as well. Organizations that slapped together a set of individual technologies and providers may have limited ability to connect the dots across important HR and business data pools. To attain maximum results, everything needs to work together and connect to all the needed data sources and repositories.

I used the term integrated ecosystem in my blog title because it takes a variety of products and providers to assemble the needed systems and services. What is “behind the curtain” matters less if you have the right MPHRO vendor managing the integrations into a seamless user experience for your business. Building and managing the comprehensive systems outlined in the CedarCrestone study has a business impact for those few companies that are just about there, but few are at the stage of full optimization. Who better than an MPHRO partner to help you get there!

Linda Merritt, Research Director, HRO, NelsonHall

Web 2.0 and HRO: A Marriage of Necessity

Google the phrase “define Web 2.0” and you’ll come up with nearly as many hits as Scottish singing sensation Susan Boyle’s YouTube views (okay, a little bit of an exaggeration, but you get the point.)

One very recent Webopedia definition I think nicely nails it: “Web 2.0 is the term given to describe a second generation of the World Wide Web that is focused on the ability for people to collaborate and share information online… includes open communication with an emphasis on Web-based communities and users, and more open sharing of information. Over time, Web 2.0 has been used more as a marketing term than a computer-science-based term. Blogs, wikis, and Web services are all seen as components of Web 2.0.”

So why am I talking about Web 2.0 in an HRO blog? Millennials in the workforce openly and adamantly “expect” Web 2.0-type capabilities in their working environment, as do their Gen X counterparts to a large extent. It’s simply an integral part of their lives. Further, it allows for enhanced connectivity and communication as workforces become increasingly global. And finally, employees and retirees alike desire more, better and easier access to information which directly impacts them and their decisions today and in the future.

The implications of Web 2.0 on HRO providers is clear…they must innovate to offer their clients’ employees Web 2.0-type services to enable the engagement and satisfy the information access requirements of today’s employers and workers. And there are a wide range of opportunities for doing so. For example:

•  Social networking sites can be incorporated into learning BPO (LBPO) arrangements to encourage collaboration and sharing of tacit knowledge across particular spheres of expertise, as can wikis for specific training needs

•  More interactive, information-rich and modeling technology-based HR portals can address the need for real-time, life event-based employee engagement in benefits administration decisions

•  Payroll processes can be “jazzed” up to enable employees to utilize mobile technology to view their payslips as soon as they are available

And let’s not forget the importance of Web 2.0-type services for HRO clients themselves. For example, executive sponsors expect better and easier access to information on their engagements’ SLAs and KPIs, increasingly via a dashboard environment; benefits administration plan sponsors are looking for enhanced, streamlined access to individual case tracking through plan sponsor-specific web portals; and wikis can potentially be utilized to develop understanding around specific issues within outsourcing contracts, leading to better client service.

We strongly believe Web 2.0 will continue to encourage – and increasingly demand – HRO suppliers to innovate around the technology offerings they provide to drive greater efficiency, effectiveness, satisfaction, information access, SLA/KPI analytics and, ultimately, cost savings into their delivered processes. Further, we believe the availability of robust Web 2.0-type services will lead to more HRO arrangements in which technology is a key driving factor not only in the initial outsourcing decision but also in the selection of the third-party provider.

Until next time, happy sourcing!                     

Helen Neale, Research Director, Human Resources Outsourcing, NelsonHall