From time to time companies exhibit moments of organizational maturity not often enough seen in the market.\u00a0 This week\u2019s moment comes to us courtesy of Hewitt Associates\u2019 Mike Wright, global HRO sales co-leader, during his presentation last month at the Conference Board’s 2006 Human Resource Outsourcing Conference in Chicago.<\/p>\n
Thank you (again) to Jessica Marquez at Workforce.com for bringing this to our attention with her fine and timely reporting in a piece entitled Hewitt Shifts Course After Recent Missteps<\/a>.\u00a0 I write about it today not merely as a follow up to my previous articles here<\/a> and here<\/a>, but rather because Mike Wright\u2019s comments are shocking in their clarity and instructive anyone looking at the HRO business today.<\/p>\n The article and Wright\u2019s comments actually provide material for me to do a multi-part series over the next two months, but come to think of it, much of what is said I\u2019ve already written about.\u00a0 In any case, it\u2019s refreshing to see a service provider to recognize these lessons that Hewitt has seemingly learned (that\u2019s learnt for those of you across The Pond):<\/p>\n I\u2019d like, now, to take a closer look at each of these lessons.<\/p>\n Client involvement<\/u><\/strong><\/p>\n Wright acknowledges that in the past, Hewitt has had a tendency to try to plow through problems encountered in an insular way.\u00a0 After all, as the leader in outsourcing they could figure out the solutions, right?\u00a0 Now, Wright stresses the importance of involving the client in the process more, including having customers visit its service centers and offer ideas on how to address problems.<\/p>\n For many of us, this is not a revolutionary idea.\u00a0 In fact, as a standard, I recommend that clients retain legacy staff long enough into the \u201cpost-implementation shake out\u201d to have staff at the vendor service center for at least a month after go-live just to walk the floor.\u00a0 They should be listening in on phone calls, recommending improvements to process, reviewing help text, performing culture training, etc.\u00a0 This is true client involvement that can help ensure a successful relationship from the beginning.<\/p>\n Aligning Goals and Expectations<\/u><\/strong><\/p>\n As I\u2019ve written before<\/a>, managing expectations is critical to success.\u00a0 After all, at its root success is defined as a function of the attainment of expectations, isn\u2019t it?\u00a0 It\u2019s about more than just hitting the SLAs that have been agreed to.\u00a0 It\u2019s about determining the SLAs in a collaborative way.\u00a0 It\u2019s about determining roles and responsibilities.\u00a0 It\u2019s about defining the future state and being nimble enough to make adjustments to it.<\/p>\n Unfortunately, I don\u2019t think it\u2019s about putting language in the contract mandating staff reductions at the client in the post implementation world as Mike Wright suggests.\u00a0 This draconian measure will do nothing to foster collaboration, review, trust and understanding.\u00a0 Perhaps more helpful would be to agree to independent post implementation review to assure that an end to end structure that is \u201cset up for success\u201d has been created.\u00a0<\/p>\n No client wants or should be expected to agree to staff reductions before the new environment has been entered in to.\u00a0 In fact, many times it is the second or third year when the environment is stabilized and staff reductions are fully realized.<\/p>\n Post Implementation Staffing<\/u><\/strong><\/p>\n To elaborate further on the prior point, one of the primary ways in which clients fail to attain the financial goals set out in outsourcing is to make the necessary changes to the internal environment after outsourcing has been implemented.\u00a0 Too many times staff and functions are retained which create redundancies in process, add cost and increase risk. The \u201clift and shift\u201d model doesn\u2019t work!<\/u><\/strong><\/p>\n From the Marquez article: \u201cProbably the biggest lesson learned for Hewitt is that the “lift and shift” model, whereby it would just take over a buyer’s HR processes and attempt to do them cheaper, doesn’t work, Wright said.\u201d<\/strong><\/em><\/p>\n Ummmmmmm\u2026\u2026I\u2019m shocked!\u00a0 Really?\u00a0 Can this be so?\u00a0 You mean you can\u2019t do it better \/ faster \/ cheaper on day one for 20% less than it costs me now?\u00a0 Say it ain\u2019t so!!\u00a0 You mean you won\u2019t bring me additional cost savings \/ scale \/ leverage \/ best practices in year two?<\/p>\n OK, I am showing my bias here.\u00a0 This has been my belief for years.\u00a0 Ever since I saw PwC try to implement lift and shift years ago for an unnamed Atlanta based client (some of my readers are cringing as they remember the fiasco, I\u2019m sure).\u00a0 The approach is rife with inherent weaknesses and problems.\u00a0 Also, as we are seeing throughout the market, it also dooms the service providers to deep financial losses.\u00a0 So what is the answer:<\/p>\n One to Many Processing<\/u><\/strong><\/p>\n For providers to make money, and clients to get the best service and best practice that is promised, it is my belief that the \u201cone-to-many\u201d model is an absolute must.\u00a0 Flexible, scalable, and leverage-able systems and process that isn\u2019t reinvented with every client can allow for true improvement in process and does not make every system enhancement or upgrade a one-off fire drill for every client.\u00a0 How can a service provider claim economies of scale if every implementation is a one off, unique environment?<\/p>\n As I said a few weeks ago, for Hewitt to turn the corner (if they aren\u2019t on the auction block), I believe the answer is flexibility in the Cyborg box.\u00a0 It is a risky venture, but one I believe can be the best answer to ADPs as yet un-challenged Enterprise-based outsourcing model.<\/p>\n HRO is not about \u201cYes, we can do that\u201d<\/u><\/strong><\/p>\n Of course, when we begin talking about a one-to-many model, over-customization is just not possible.\u00a0 Trade offs will be made, and the vendor will have to say no.\u00a0 The Culture of Accommodation<\/a> can begin to be broken!\u00a0<\/p>\n Service providers could do well with a dose of humility every now and again<\/u><\/strong><\/p>\n Again, from the Marquez article: “I come to you pretty humbly this morning,” Wright told attendees, noting the troubles the company has had.<\/em><\/strong><\/p>\n Anyone who knows Hewitt realizes that this could not have been easy for Mike.\u00a0 In fact, it would not have been easy for representatives of most service organizations.\u00a0 I can only imagine that the commitment to speak at the conference was made before the very public \u201cchallenges\u201d Hewitt has recently faced.\u00a0<\/p>\n Humbled is one way to think of it.\u00a0 In her subtitle, Marquez says \u201colder and wiser.\u201d\u00a0 I actually like that.\u00a0 But whatever you call it, if Mike\u2019s comments and position are shared by others in the organization, we will see Hewitt attain the next level of what I like to call organizational maturity<\/em><\/strong>.\u00a0 If so, let the competition beware! About the author<\/strong> \u2013 Donald Glade<\/a> is President and Founder of Sourcing Analytics, Inc.,<\/a> an independent consulting firm specializing in helping companies optimize their <\/em>HR<\/acronym><\/em> \/ benefits \/ payroll service partnerships through relationship management, financial analysis, and process improvement.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" From time to time companies exhibit moments of organizational maturity not often enough seen in the market.\u00a0 This week\u2019s moment comes to us courtesy of Hewitt Associates\u2019 Mike Wright, global HRO sales co-leader, during his presentation last month at the…<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[6,8,17,22,31,11,36,3],"tags":[],"class_list":["post-599","post","type-post","status-publish","format-standard","hentry","category-hewitt","category-strategies","category-hro","category-industry-news","category-outsourcing","category-service-delivery","category-vendor-management","category-vendors"],"_links":{"self":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/599","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=599"}],"version-history":[{"count":0,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/599\/revisions"}],"wp:attachment":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
\nThis basic concept has been noted and highlighted in the cost findings of TCO studies I have conducted<\/a>.\u00a0 Collaboration and clear definition of roles and responsibilities are the way to address this, not mandated staff reductions.<\/p>\n
\n\u00a0<\/em><\/p>\n