Issue link: https://www.e-digitaleditions.com/i/73199
Strategic Sourcing But we also had to decide on services which we defined as "added value services," like performance management, learning, health management, and recruitment. As a next step, we had to decide how to proceed from the present to the future situation. All supporting systems were old tailor-made ones; they had to be replaced by new ones, facilitating more standardisation and automation. Processes were decentralised, with great differences between the respective sites of our brands, as well as internally at those sites. Data-entry was done multiple times for the same information. We already outsourced our payroll, but not in a uniform, European way. To come to an overall strategy and structure for our HR services, we conducted a sourcing scan to determine what the optimal sourcing scenario would be for our HR services. The sourcing scan is a tool to analyse the most optimal sourcing form in different steps. With varying volumes, international growth, and new markets, Ahold needed a lot of flexibility in supporting processes; they needed to be standardised, efficient, scalable, and transferable. As an instrument to outline the current situation, we made an inventory in a comprehensive HR catalogue of all end-to-end processes and their "swimming lanes." This gave us very good insight into the maturity of the current situation, but more importantly it helped us to define our future HR processes. Ahold Europe considered multiple scenarios but eventually decided to start looking for a partner which could build and operate the SSC. In most cases, it is preferable to only outsource mature processes which are measurable and transparent— e.g., set key performance indicators (KPI's), standard processes, and uniformity. If you don't know what you're doing and what you want, a supplier will not know this for you either. However, the case of Ahold Europe was different. Looking at our long-term strategy, and the need to liberate store managers from administration, we determined that the best route was to find a partner which could assist in the transition process, enabling Ahold Europe to make the best connection with the operational standards. The HR service catalogue was an absolute necessity in this somewhat different outsourcing process. Regarding the choice to outsource our HR services, it was completely in line with the Ahold Europe strategy. Ahold Europe has a clear vision: We should do the things we are best at ourselves, let others do what they can do better. This is also relevant for supporting processes and functions. Our IT department, for example, should do retail IT, not HR IT. Sometimes HR decision-makers are not fully aware of the various sourcing decisions and sourcing knowledge the BPO organisation deals with on a daily basis. For example: partnering with external parties for the most up-to-date knowledge and expertise at the right time (like for more complex and incidental matters like labour relations); further centralisation by creating one SSC, as opposed to several; allocating more activities in the line organisation (as is often the case with self-service applications): This is all sourcing! There are implications linked to the choice of what to keep in-house (some multinationals will keep all processes in-house) and what to outsource— all or only specific processes. (Unilever outsourced nearly all processes, including core ones such as recruitment, whereas Philips only outsourced its basic IT systems. Likewise, a decision has to be made whether to locate the SSCs locally (as ING does) or to organise them globally. If an organisation finally decides to (partly) outsource HR services or to move them to a more regional or global centre, yet another decision awaits. Do you choose to shift and lift, or would it be better to lift and shift? The distinction between these two options is closely related to the stage the service processes are in. In the first case, organisations choose to improve the "as is" situation by maturing all the service processes (shift) before the actual outsourcing takes place (lift). In the latter case, organisations might decide to outsource their "as is" (lift) and start improving these processes afterwards (shift). A third way would be to shift and lift in a joint venture with the vendor(s), much as happened with Ahold. There is not one moment or a single best decision to make on strategic sourcing; it is a continuous challenge for, and responsibility of the organisation as an integral whole, involving both the executive board (who do we want to be and how can we realise this?), middle management (how can we effectuate the sourcing options and optimise yields?), and operational levels (how can we implement and execute all sourced allocations?). The next phase consists of the realisation of the choice (change), when it is not only the process and content which is important, but when the type of change management involved is just as important. The goals and reasons to reconsider the current sourcing situation vary: • Economies of scale by global leverage; • Access to new channels and markets; • More flexibility; • Improved continuity; • Reduced time-to-market of products and services; • Optimal exploitation of experience and expertise of third parties; • More grip on sustainability and quality of end products and services; • More control on market and financial risks; • Enforcement of innovation. Realising the Change In effectuating its choice, Ahold Europe searched for, selected, and contracted a provider on the one hand (the selection process), and designed the new internal HR services organisation on the other. Ahold Europe sent out a comprehensive RFP. In addition, parties were also invited to present themselves and to have an open discussion on how they looked at the process and the desired outcome. We learned a lot during the process, and the vendors learned a lot from Ahold Europe. There were other questions than merely price which were far more [40] HRO TODAY GLOBAL | SPRING 2012