Everywhere around us inflection points are occurring. Inflection points are a sign that change is occurring that will create a new order of things. Whether we see them, understand their long-term implications, and leverage them to our advantage is another issue.
Social Inflection Points Impact HRO
Today the U.S. Supreme Court ruled on two issues impacting marriage law that will change who is entitled to marriage-related federal benefits.
Major social change invariably impacts HR and HRO services, and the marriage law rulings by the U.S. Supreme Court will have wide-ranging implications for workplace benefit plans in at least 12 states.
The long-term implications may take many years to become clear, but leveraging in the short term has already begun. ADP was the first HRO vendor I saw tweet about the court’s ruling by announcing an upcoming webinar on the changes to the Defense of Marriage Act (DOMA). Mercer quickly followed with a ‘benefits administration alert’ letter.
Technology Inflection Points Impact HRO
As a disruptive technology, SaaS has started a global “cloud war” that is only just beginning. HR and HRO are just a small piece of the IT landscape and we will see skirmishes as new entrants and long-term leaders battle for market share, industry leadership and shareholder value as they transform not only technology offerings, but revenue streams and business models.
Oracle’s Larry Ellison has been in the news for the last two weeks reporting on earnings that were already impacted by SaaS and the cloud war. Here was one of the industry’s titans comparing Oracle’s SaaS revenues (annualized at ~$1bn) to comparable revenues posted by perennial competitor SAP and upstart Workday!
Upgrade or rip-and-replace decisions are becoming imminent for HR clients and HRO services providers. Many vendors, including Ceridian, Mercer and Talent2, are already developing integrated service platforms and more cloud offerings for organizations of all sizes.
Client Inflection Points Impact HRO
To identify current trends in HRO customer requirements I reviewed current (2013) sources, including NelsonHall’s Targeting Payroll BPO market analysis and HR Outsourcing Confidence Index, and also HRO vendor discussions. Further, I reviewed a research survey by Mandy Sim, a University Teaching Fellow with the Business School at the University of Nottingham Malaysia Campus, entitled the HRO Adoption Survey Report 2012, which identified key Asia-Pacific HRO practices based on a survey conducted on delegates who attended the HRO Today Forum APAC 2012.
Following are my findings on what today’s HRO clients, across service lines and geographies, are wanting from prospective vendors:
- Value for price, balancing cost with improved outcomes and business impact
- Standardization of processes and technologies
- Advanced subject-matter expertise and best practices
- Scalability across services and geographies
- Access to new tools, technologies and services.
Ready or not, change is coming to HRO. Are you ready for how will it impact you and your organization?
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