Issue link: https://www.e-digitaleditions.com/i/73199
HRO Today Forum Europe Advisorial Advice One panel's exploration of the state of the industry. By Ethan Kline At the recent HRO Today Forum in Barcelona, three leading HRO advisors sat down to discuss their roles, innovation in HRO, and trends in the sector. Dave Nelson, who works for Kraft Foods (formerly Cadbury Schweppes PLC) and oversaw the transition of outsourced HR tasks from NorthgateArinso to IBM, moderated the discussion. It was an impressive panel: Tim Palmer, then a partner at PA Consulting who ran their sourcing business in the U.K. and was chair of the HR Outsourcing Association; Simon Constance, a partner at Orion Partners who runs an infrastructure practice focussed on sourcing advisory work in the U.K.; and Roy Klaassen, a senior consultant for strategic sourcing at Kirkman Company, a Dutch provider with a strong HR practice concentrating on "make, buy, or ally" questions. DN: I suppose I should start with an easy question. In a maturing market with organisations going for their second outsourcing deal and suppliers developing targeted offers rather than offering everything at a lower price, what role do sourcing advisors play? TP: If a company knows they want to renew with their current provider, then there is not a lot we can do. However, in areas of complexity or where organisations are moving between suppliers or systems, then we can help HR, at the highest levels of a company, make decisions. For example, I just responded to an RFP where the organisation knew it needed to change its systems but did not understand the complexity and the interrelated questions that fell out of that decision. This is certainly something that an advisor can help with. I think our other role is to moderate the excesses of corporate procurement and create an environment amenable to creating a successful outsourcing contract. RK: I am not sure I agree with your assumption that the market is mature and that most of the deals are now renewals. In the Dutch geography, we are still in the earlier stages of HRO, and advisors [16] HRO TODAY GLOBAL | SPRING 2012 can help bring HR and procurement together. I recently had a conversation with a client that had success offshoring their IT to India and wanted to pursue HRO through the lens of IT vendor management. I think it is our role to help HR understand what is out there, what is possible, and what is not possible. SC: HRO is a significant commercial transaction, and with that comes significant commercial exposure, risk, and complexity. Having sat on all three sides of the table as a buyer, a provider, and an advisor, I believe that trying to get through this transaction without an external reference who can say, "this is going in the right direction" would be an unacceptable risk to a business. DN: When I entered this space five years ago, big global deals—like Accenture/Unilever —were seen as the way forward. But this seems to have changed. Are global multi-process deals a thing of the past? RK: I have a customer who is looking at this, and we have found that no one can deliver a global multi-process solution. Suppliers might have it as a vision, but it exists only on paper. And from a customer's point of view, what is the driver for this kind of deal? Is it cost savings or standardisation? With standardisation, you need to be careful that you are doing it for the right reason. Some corporations want standardised reporting and are using this as a driver, but you are much better placed if you use a process, such as succession planning, as a driver. SC: If you look at the trend of total contract value for individual deals, it suggests that global multi-process deals are dead as a market. And this is a good thing, as it is evidence of a mature, stable, viable market in HRO. One of the reasons the market has died is that buyers are more sophisticated in their requirements, and suppliers have become specialised in distinct areas. We have been introducing clients to specialist providers in benefits, employee relations, and mobility. When a client with a full suite of services puts out an RFP and sees a