systematicHR

I haven’t written about HRO for a very long time.  Part of it could be just my simple disillusionment of the space.  The outsourcing of payroll and benefit transactions make total sense to me as they are complete commodities.  If we talk about F&A (finance) the transactional side of procurement, AP and AR at the very least are all easily outsourced since once you have a process defined, the transactions are highly standardized.  Not necessarily so with HR and specifically talent management.  While it’s easy to outsource the technology, the transactions require a bit of graceful flexibility if managing your talent also means engaging them.  I’m not advocating anarchy here, but rigid adherence to “standardized best practices” may not meet that goal completely.

It appears that HP is trying to keep up with the Joneses.  IBM and Accenture have been marketing their broad scope of BPO services, although I would argue that Accenture might be ahead of IBM.  The reality is that HP never had HR BPO, and so the acquisition seems to make good sense from a services perspective.  ExcellerateHRO has a decent brand in the HRO space even though it’s uncertain how many full service HRO clients they have won.  Alternatively, EDS never seemed to make a strong push into the F&A outsourcing market which HP is significantly stronger in.

The question really comes around the cultural fit.  While I’m not in a position to comment, reports are that the cultures are significantly different and any integration will require significant change management efforts for cultural integration.  This seems like an effort that will not be easily or quickly performed.

I don’t see any reason at this point why there should be cause for concern at EHRO customers.  It’s not as if HP already had a large HRO business and will be moving customers to new platforms or service models.  I’m also making the assumption that HP is actually acquiring the EHRO business, but I suppose since it’s a joint venture, perhaps that’s more complicated than I realize.  In general, EHRO customers may have more opportunities with the new HP, and as usual, I’ll hedge with the “wait and see” statement.