Issue link: https://www.e-digitaleditions.com/i/73199
HRO Today Forum Europe specialist's response, it creates a dilemma and an internal conversation. The client has to decide if they want the best mobility service in the market or if cost reduction and service management from one supplier is more important. These are very important conversations. TP: There have been a couple of contracts signed this year which are global and multi-process, so I do not think the market is dead. However, they do not cover recruitment, and I do not think these deals work well in HRO. I think you have to look at what people are trying to buy. I was the lead advisor for the Unilever deal, and it was about transformation and moving from a country-based to a global- based HR organisation not about cost savings. When these deals started in 1999 with BAE, BP, and BT, it was about making a market. The next evolution was towards companies buying systems they couldn't finance themselves, then it became about transformation as organisations wanted global processes and the advantage of offshore labour arbitrage in 2005-2006. There has been a gap with the recession, but a lot of the earlier deals are coming up, and suppliers need to understand what customers now want to buy. If I were a supplier, I wouldn't put my bet on multi-process HR. DN: Where are you seeing innovation in the market today? SC: AdvisorPlus is a good example of innovation in the middle office in HRO. It provides outsourced employee relations advice in the U.K., has a huge SME [small-to-medium enterprise] client base, and is growing its large corporate clients. AdvisorPlus is moving into providing legal advice so that when a line manager calls for policy advice about an employee, AdvisorPlus can follow the case through a legal process if necessary. TP: There's also buyingTeam, which focusses on procurement spend savings and now works in the HR space. TMF, a Dutch company, provides final mile services for multinational firms in areas such as payroll tax, compliance, and company secretary in all countries of the world. There is innovation in the commercials of the deal, and we are SC: Completing a deal is complex and stressful and requires good relationships between senior parties on both sides. It is easy for both parties to lose rigour because their lives depend on each other. A buyer needs to remember to step back and challenge the provider. TP: Because people are familiar with the contracting process and the offerings, it is often a case of fitting the offering to the client's situation. Buyers should know what they really want from an outsourcing deal from the very beginning and should check they are getting what they want at every stage, including transition and operations. And during the sales process let suppliers speak to the economic buyer as often as they need to. Do not put up barriers between suppliers and the decision makers. SPRING 2012 | www.hroglobal.com [17] moving away from service credits, which is changing the nature of contracts towards incentives rather than penalties. RK: I am excited about the innovation in the culture of providers. We recently ran workshops with six providers ahead of an RFP, and they all arrived with a software-as-a-service [SaaS] solution, a blend of on- and off-shoring, and transaction fee pricing. But their approach and interaction within the workshops was completely different, which is a vital lever of choice for companies starting a partnership which will last over a number of years. DN: What are the most common mistakes a buyer makes in HRO? RK: Decide your sourcing objectives upfront. You can't have cost- savings, standardisation, innovation, and flexibility. Knowing your objectives and communicating them to providers will get you the best solution. Also, HR needs to develop its governance capabilities in advance of a deal. Typically, HR is not sophisticated in thinking about ownership of process and contracts, and looks to IT as an example which is a very different set of services. You need to be able to manage the supplier.