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All Rights Reserved © 2007 Realities of Outsourcing: 11 th in a Series of Webinar Presentations Human Resources Outsourcing – Differences that Drive Transformation July 12, 2007

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All Rights Reserved © 2007

Realities of Outsourcing:

11th in a Seriesof Webinar Presentations

Human Resources Outsourcing –Differences that Drive Transformation

July 12, 2007

1

Presenting today

John HaworthConsulting Principal, Global [email protected](202) 663-9254

Robert ZahlerPartner, Global [email protected](202) 663-8130

2

Discussion agenda

Pillsbury HRO point of view (POV)HR functionsDifferent character of HRORole of transformation

HRO marketplace dynamicsMulti-process HRO: success or failure?HRO supplier differentiation

HRO processArchitectTransactGovern

Lessons learned

3

What is HRO?

Human resources outsourcing (HRO) primarily focuses on processing transactions, data management, systems support, and reportingon behalf of clientsThe retained human resource (HR) organization is typically charged with human capital management strategies, HR program development and oversight HRO transactions include the operational aspects of one or more of the major processes of the HR domain:

RecruitmentPayroll BenefitsWorkforce AdministrationCompensation Learning OD and Performance ManagementService CenterHRIS

4

At a discrete process level, HR may comprise:Payroll AdministrationTime and Attendance ManagementBenefits AdministrationHR Systems Recruitment

Interestingly, each function can be outsourced as a standard HR functionEither separately or in combination, and historically has beenThis makes HR one of the most historically outsourced functionswithin the BPO landscape, if only on a partial basis

Some of these processes have their own “classic” set of measuresAny outsourcing arrangement must address the need for service levelsbased on differing measures (metrics), especially with respect to

Learning Services (measures of effectiveness)Recruitment (measures of quality)

Learning ServicesLeave AdministrationUnemployment Claims AdministrationRelocationService Center

Human resource function

5

The mission of HR is increasingly viewed as strategicThis generally is not the case with respect Finance, Facilities,or other back-office functions of most organizations

Like Supply Chain Management or IT, effective HR is seen as away to confer competitive advantageLike these disciplines, HR is increasingly being configured as

Highly skilled retained functions working in tandem withHighly competent outsourced providers of processes and technicalsupport for the transactional components of the domain

Most forward-looking companies have implemented, are in the midst of, or are planning “HR transformations” designed to shift

The heavy transactional load of the HR department to third-party suppliersWhile the development of internal competencies in Talent Management,Total Rewards and effective Workforce Administration becomes theprimary goal of the retained function

HRO is different

6

Business challenges equate to HR challenges

• Globalization of markets, value chains• Increasing rigor of regulatory regimes • Privacy and confidentiality concerns• New technologies, increasing pace of change

• Leadership in core competency discussion and its workforce implications• Leadership in global talent management - from planning to workforce optimization• Leadership in change management and innovation in the core business• Leadership in creating a boundary-less organization both within and without

These realities of the business environment mean that firms :

• Need to understand core competencies in global context• Need to develop competency in partnering• Need to drive change and innovation• Need to manage more complex market interactions

All of which demands that the new HR deliver :

Macro-economic trends

Firm-level economics

Firm-level dynamics

7

Resulting domain landscape

Where is HR now? Where is HR going?HR is in a state of changeFormer view: people as expenses

HR reporting to CFO, or to COOEmphasis on service delivery andcost control

Evolved view: people as assetsPrevalent trend: HR reports to CEOEmphasis on HR’s strategic missionand contributionTalent Management viewed as the key HR mission

Dan Walker, Head of HR at Apple is the “Chief Talent Officer”

HR is in the midst of a wide-spread“transformational” phase

ImplicationsHRO’s primarily focus should be on:

Processing transactionsData managementSystems supportReporting on behalf of clients

The retained organization should be charged with:

Human capital management strategiesHR program developmentOversight

8

Why HR is changing

Causes HR is in the midst of a wide-spread“transformational” phase, made necessary because:

Transactional work is becoming a commodityThere is growing demand for expertise regarding deployment and management of human capital There is a strong need for HR to create efficiencies, while at the same time engaging in a functional transition, up the corporate value chain

ActionsAdministrative, transactional work must be performed at lowestcost, while maintaining regulatory compliance and acceptable service levels

HR must have access to emerging technologies to achieve these goals

Service delivery models appropriate to the culture of the organization must be improved and evolved

HR activity must be seen to contribute directly to the strategic success of the enterprise

9

Through outsourcing, HR is freed to develop the strategic capability and Human Capital Management expertise that enterprises need to compete

HR transformation mission: To add more value

10

Strategy

Governance

HR Delivery Planning

HR Mgmt and Approvals

HR Service Delivery

Fulfillment & Logistics

Help Desk

HR Customer Management

Tracking and Reporting

Vendor Management

Technology Management Sou

rcin

g O

ppor

tuni

ty

After IDC

Ret

aine

d Fu

nctio

ns

Busin

ess T

rans

form

ation

Valu

e

Envisioning the retained organization

11

Source: Nelson-Hall, 2006

Multi-process HRO is rapidly growing

12

Source: Nelson-Hall, 2006

Thresholds are often reduced when there are opportunities for additional bundled services.

Multi-process HRO competitive landscape

13

LeadersStrongPerformersContenders

RiskyBets

Strong

Strong

Weak

Weak

Currentoffering

Strategy

Market Presence

Full vendorparticipation

Incomplete vendorparticipation

IBM

AccentureHewitt Associates

ExcellerateHROACS

ConvergysFidelityEmployerServices

Source: Forrester, 2006

High end of the HRO landscape

14

Mobilize– Initiate project – Detailed knowledge transfer from client– Review process maps and other deliverables

– Obtain operational data– Initiate base case development

Document As-Is Environment

To-Be Development– Develop To-Be scope model– Develop solution objectives and constraints– Develop HR, financial, asset and business terms requirements

Architect

Response Readiness– Update business case – Address contract terms– Refine timelines for sourcing process– Develop guiding principles for Response evaluation and scoring

– Services Scope Model (using our Visual Sourcing scope model)– Operational data & other supporting data (org charts, contracts, IT applications, etc)– Issue RFP

Develop Requirements Package for Suppliers (RFP)

861

RFP Release

Phase 1 • Architect

15

SVP H

R

Talent Managem

ent VP

Total Rew

ards VP

Workforce Adm

inistration VP

CO

E Workforce

Administration

CO

E Recruitm

ent

CO

E Payroll

CO

E Benefits

CO

E Learning

CO

E HR

IS

CO

E S

ervice Center

CO

E Com

pensation

CO

E Em

ployee and Labor R

elations

CO

E OD

& Performance

Managem

ent

CO

E C

orporate Security

CO

E Coporate Aviation

HR

Business Partner RAC

HR

Business Partner HER

C

HR

Business Partner HC

A

HR

VP Europe R

egion I

HR

VP Europe Region 2

HR

Consultancy

HR

Outsourcer

Internal Stakeholder Communications (Mgmt)External Stakeholder CommunicationsEmployee CommunicationsEnterprise HR Strategy Overall HR Policy DevelopmentTalent Management Strategy Total Rewards Strategy Workforce Administration Strategy Regulatory Compliance DesignOverall HR Process and Procedure RequirementsBudget DevelopmentHR Systems / Technology StrategyStrategies, Policies and Designs ApprovalAnalytics & Metrics RequirementsQuality and Performance RequirementsSpecial Programs Design (M&A, New Locations, etc.)Internal ConsultingSolution and Business Case ApprovalProject ManagementProcess and Procedure DevelopmentAcceptance TestingRecruitmentLearning OD & Performance ManagementPayroll, Time and AttendanceBenefits AdministrationCompensation Workforce AdministrationService CenterEmployee and Labor RelationsHRIS and Records MangementResearch and AnalysisPolicy and Legal Compliance Monitoring/ReportingHR Metrics and BenchmarkingWorkforce Analytics and ReportingProblem Management & Customer SupportConsulting and Project ManagementTechnology ManagementSourcing & Supplier ManagementCompliance ManagementHR Training and DevelopmentHR Change Management

Dev

elop

Plan

All RegionsAll business Units

Delivery Management

Strategy, Policy and Planning

Stakeholder Management

Design & Develop Solutions

Overall HR Scope Model

Rel

ate

Hertz Corporation

Ope

rate

Mea

sure

an

d A

naly

seM

anag

e

Talent Management

Total Rewards

Workforce Administration

Information and Analysis

Retained Human Resources

N/A

Business Unit

HR Outsourcer / Integrator

Other Internal (Not HR or BU)

Architect: Modeling the To-Be state for HR

The

16

HR Administration: 96 FTEs in Call Center, HRIS, Benefits Administration, Field HR, HR ProgramsRecruitment: Global Talent Management System, 21 North American FTEs in staffing administration, only North American vendor management (management of all recruiting-related vendor spend)

FY '07 FY '08 FY '09 FY '10 FY '11 FY '12 Total

HRO FTE Cost Baseline

56 FTE Loaded Cost Baseline 1.7 4.6 4.6 4.6 4.6 1.9 22.0

Recruiting Cost Baseline

0.3 1.1 1.1 1.1 1.1 0.5 5.10.1 0.6 0.6 0.6 0.6 0.2 2.60.9 3.7 3.7 3.7 3.7 1.5 17.20.3 0.5 0.5 0.5 0.5 0.2 2.50.5 0.0 0.0 0.0 0.0 0.0 0.5

2.1 5.8 5.8 5.8 5.8 2.4 27.9TOTALS 3.8 10.4 10.4 10.4 10.4 4.4 49.9

Notes:

1. Fiscal Years begin in April.

2. Analyzes 5 year period beginning 1 September 2006, ending 31 August 2011. Thus, FY '07 includes 7 months (Sept - Mar).

3. Number of personnel, salaries, benefits, etc. are held constant throughout the 5 year period.

4. Loaded FTE Costs include salary, benefits (approximately 24%), and allocations (approximately 20%) for office and IT.

6. Assumes recruiting functions (other than Global TMS) transition in January '07, including 11 FTEs.

7. Assumes would implement TMS in September '06.

Initial Base Case($ Millions)

11 GCE Recruiting FTE Loaded CostTemp Costs

5. Baselines assume FY '07 reduction of 36 HRO FTEs; reduction of remaining in scope HRO FTEs (if any) by beginning of FY '08.

N.A. Vendor SpendGlobal Talent Management SystemTMS Implementation

Total Recruiting Baseline

Architect: Build the base case

17

RFPs outline a client’s environment, requirements, and any known challenges; it seeks (rather than prescribes) solutions

RFPs will vary in content depending on scope, complexity, and geographical span

RFPs are prepared with as much data (in the exhibits) as possible to give the providers a clear sense of whether to bid

RFPs are useful as part of the process, and need to be augmented with qualitative analysis and real-world contact with the providers

Architect: Develop the requirements package

Table of Contents1. Overview of this RFP

1.1 Purpose of this RFP1.2 Description of Client1.3 Business Objectives1.4 Structure of RFP

2. RFP Instructions and Terms and Conditions2.1 Confidentiality and Use of Information2.2 Schedule of Activities2.3 Principal Contact and Information Requests2.4 Response Submission Instructions2.5 Election Not to Respond2.6 Supplier Presentations2.7 Due Diligence Process2.8 Award of Services2.9 Modification or Termination of RFP Process2.10 Supplemental Information2.11 No Representations and Warranties2.12 Terms and Conditions2.13 Proposal Preparation Costs

3. Description of Current Environment4. Target Environment Requirements (“TER”)

4.1 Vision4.2 Objectives4.3 Constraints

5. Target Environment Design (“TED”)5.1 Executive Summary5.2 Scope Model5.3 Solution5.4 Interaction Model5.5 Implementation5.6 Performance Model5.7 Price Model5.8 Governance and Relationship5.9 Supplier’s Alternative Proposal

6. Exhibits6.1 Exhibit A: Scope Models6.2 Exhibit B: Service Levels6.3 Exhibit C: Pricing6.4 Exhibit D: [Reserved.]6.5 Exhibit E: Client’s Current HR Systems Environment

18

N : 2 - Supplier– Proposal development– Yellow Pad Sessions

N : 2 - Customer– Review and analyze supplier proposals– Downselect to finalists

– Competitively negotiate and analyze all aspects of the supplier’s offerings• Scope, solution, transition, service levels, price, business terms

– Perform due diligence (customer and supplier)– Downselect to the winning supplier(s)– Obtain management consensus

2 : 1

Finalize– Develop contract documents– Negotiate with supplier(s)– Finalize business case– Obtain management approval on final package(s)

Transact16 226

Strategy Approval– Obtain domain and executive approval on approach and supplier short-list

Sourcing Strategy– Identify the sourcing strategy to achieve the To-Be sourcing model– Bundled / best of breed / hybrid

Strategy Approved Winner(s) Selected Contract(s) Executed

26-2810-12

Phase 2 • Transact

19

1Leader in Learning Services. HRO and Business Transformation Experience. Record of delivered Learning results.

2Strong Learning offering. HRO, some BT, strong business consultancy, scale. Deep learning culture in main business.

3Broad HRO experience, HR consultancy, broad Human Capital Management view. Thought leader in HR.

4Digital Think, growing client list, operations strength, customer care (billing) expertise. Ability to scale.

5Relevant industry experience, strong technical learning offering, history and track record. Smaller, but solid.

Transact: Analyze supplier proposals

20

Concern Selected ProviderFinancial Risk:The risk of the business case not being made, service cost overruns

More specific obligations in SOW lead to reduced chance of “scope creep” and change orders; recruitment costs easier to predict (fill to bill)

Contract Risk :Legal exposure, lack of flexibility

Provider generally flexible and transparent; expected to continue, but full contract negotiations lie ahead

Execution Risk: The risk that this provider will fail to deliver

Fairly robust set of SLAs offered, at or above commercial standards for HRO, recruitment SLAs remain to be discussed in detail

Obsolescence Risk:The risk that this provider will fall behind the market

Strongly mitigated through Provider’s approach based on advanced use of technology/enhanced self service as Tier 0; committed to SAP platform

Business Risk:The risk that this provider will suffer a change of control, or business continuity lapse

CEO / Board stated commitment to “stand-alone”strategy; competitor offers have been firmly rejected

Transact: Due diligence – downselect from 2:1

21

Terms and Conditions

Schedules and Attachments

Transact: Develop contract documentsGENERAL TERMS AND CONDITIONS1. PREAMBLE1.1 Objectives1.2 Construction of Preamble1.3 Defined Terms2. THE SERVICES2.1 Obligation to Provide the Services, Generally2.2 Scope and Nature of the Services2.3 Users of the Services2.4 New Services and Replacement Services2.5 Commitment to Use Supplier for Services2.6 Cooperation and Coordination with Other Parties2.7 Evolution of the Services2.8 Certain Dependencies3. PERFORMANCE AND GOVERNANCE3.1 General Performance Obligation3.2 Service Locations3.3 Time of Performance3.4 Manner of Performance3.5 Performance Measurement3.6 Relationship Governance and Management3.7 Changes to the Services or the Service Delivery Environments3.8 Compliance with Laws and Regulations, and Associated Customer

Policies4. SERVICE PROVIDER PERSONNEL AND SUBCONTRACTING4.1 General Requirements4.2 Subcontracting5. CUSTOMER RESPONSIBILITIES5.1 Appointment of Customer Relationship Management Personnel5.2 Customer Retained Functions5.3 Savings Clause6. CUSTOMER RESOURCES6.1 Affected Customer Personnel6.2 Customer Software6.3 Customer Facilities6.4 Customer Resources Provided to Supplier Personnel Working

On-site6.5 Other Resources7. OTHER RESOURCES REQUIRED FOR PERFORMANCE OF THE

SERVICES7.1 Equipment7.2 Third Party Services7.3 Software8. TRANSITION AND ACCEPTANCE8.1 “Transition” and “Transition Period” Defined8.2 Transition Plan8.3 Conduct of the Transition8.4 SAP Development QA review. Completion of Transition Projects8.5 Acceptance9. DATA SECURITY AND PROTECTION10. INTELLECTUAL PROPERTY RIGHTS10.1 Certain Definitions10.2 Independent IP and Supplier Methodologies10.3 Intellectual Property Rights in Work Product10.4 License Rights to Supplier Products10.5 Supplier Methodologies10.6 Intellectual Property Rights Agreements with Supplier Personnel10.7 Other Obligations and Rights Regarding Work Product10.8 Mental Impressions11. TERM AND TERMINATION11.1 Initial Term and Renewal11.2 Termination, Generally11.3 Termination By Customer11.4 Termination By Supplier11.5 Charges Upon Early Termination11.6 Extension of Termination Date11.7 Partial Termination11.8 Disengagement Assistance12 CHARGES AND RELATED PROVISIONS12.1 General12.2 Invoicing and Payment Terms12.3 Taxes12.4 Benchmarking12.5 Extraordinary Circumstances12.6 Potential Future Charges12.7 Resource and Budget Planning/Forecasting

13. AUDITS AND RECORDS13.1 Audit Rights13.2 Audit Follow-up13.3 Confidentiality of Audits13.4 Records Retention13.5 Supplier Audits13.6 Sarbanes Oxley Compliance14. PROCEDURES MANUAL15. REPRESENTATIONS, WARRANTIES AND COVENANTS BY

PROVIDER15.1 Work Standards and Data Integrity15.2 Efficiency and Cost Effectiveness15.3 Deliverables15.4 Maintenance of the Service Delivery Environment15.5 Compatibility15.6 Non-Infringement15.7 Viruses15.8 Disabling Code15.9 No Improper Inducements16. MUTUAL REPRESENTATIONS AND WARRANTIES16.1 Mutual Representations and Warranties16.2 DISCLAIMER17. CONFIDENTIALITY17.1 “Confidential Information” Defined17.2 Obligations of Confidentiality17.3 No Implied Rights17.4 Compelled Disclosure17.5 Confidential Treatment of the Agreement17.6 Return or Destruction17.7 Duration of Confidentiality Obligations18. INSURANCE19. INDEMNIFICATION19.1 “Claim” and “Losses” Defined19.2 Indemnification By Supplier19.3 Infringement Claims19.4 Indemnification by Customer19.5 Exclusions from Infringement Indemnities19.6 Indemnification Procedures19.7 Subrogation19.8 Direct Contract or Tort Claims Not Covered.20. LIABILITY20.1 Limitations of Liability20.2 Force Majeure21. RULES OF CONSTRUCTION21.1 Entire Agreement21.2 Contract Amendments and Modifications21.3 Governing Law and Competent Courts21.4 Relationship of the Parties21.5 Consents and Approvals21.6 Waiver21.7 Remedies Cumulative21.8 Headings21.9 Section References21.10 Schedule References21.11 Use of Certain Words21.12 Order of Precedence21.13 Severability21.14 Survival21.15 Counterparts22. CONTINUED PERFORMANCE AND EQUITABLE REMEDIES22.1 Continued Performance22.2 Equitable Remedies23. MISCELLANEOUS23.1 Binding Nature and Assignment23.2 Notices23.3 Non-solicitation of Employees23.4 Covenant of Good Faith23.5 Public Disclosures23.6 Parent Guarantee

SCHEDULES AND OTHER ATTACHMENTS:

SCHEDULE A: SERVICES- EXHIBIT 1: BASE HRO SERVICES- ANNEX I: SOW- ANNEX II: SERVICE LEVELS-ANNEX III: BASE HRO SERVICES CHARGES ANNEX- EXHIBIT 2: RECRUITING SERVICES - ANNEX I: SOW- ANNEX II: SERVICE LEVELS-ANNEX III: RECRUITING SERVICES CHARGES ANNEXSCHEDULE B: EARLY TERMINATION CHARGESSCHEDULE C: CHANGE CONTROL PROCESSSCHEDULE D: HUMAN RESOURCES TERMSSCHEDULE E: BACKGROUND CHECK REQUIREMENTSSCHEDULE F: APPROVED SUBCONTRACTORSSCHEDULE G: TRANSITION PLANSCHEDULE H: SECURITY AND OTHER CUSTOMER POLICIESSCHEDULE I: DATA PRIVACYSCHEDULE J: DISENGAGEMENT ASSISTANCESCHEDULE K: SAS 70 CONTROLSSCHEDULE L: INSURANCESCHEDULE M: FORM OF PARENT GUARANTEESCHEDULE N: ACCEPTANCE PROCEDURESCHEDULE O: ESCALATION PROCEDURESCHEDULE P: DISASTER RECOVERY AND BUSINESS CONTINUITYSCHEDULE Q: END USER TERMS – SUPPLIER PRODUCTS

22

Transact: Operational service levels

Used to measure and track the service provider’s performanceagainst common industry operational metrics – challenges:

Selecting the right metrics (adequate coverage vs. excessive detail)Performance levels based on business needs, not adversarial negotiation

Pillsbury point of view: SLAs are necessary but not sufficient indicators of performance; holistic assessment is preferable, particularly in BPO relationships SLAs must be focused on business outcomes and not used to micro-manage how the service provider does its job

Sample service levels:HR transaction processing accuracy HR transaction processing timelinessCustomer (employee, manager) satisfaction with the HR services

23

Transact: Balanced SLA approach

Recruitment cycle times

24

3

Organisation

Processes

Organizational Readiness

People

Technical Common

Framework

Project Management

High level milestones, confirmed

during planning

TECHNOLOGY

HR InformationSystem

HRSC Technology

To BeLandscape

Configuration

TO- BE DESIGN TRANSFER OPERATEAS -IS BUILDPLAN

Governance

HR Role Model

Job Profiles Volumetrics

Accounta-bility &

Escalation

PerformanceMeasure-

ment

ComplianceData

Privacy

Business Process Design

Operational Procedures

Statement ofWork

Service Catalogue

PeopleStrategy

People Due Dilligence

People On-boarding

StakeholderAssessment

-Communication Strategy

& Plan

Communication

Material

Role Profiles

TrainingStrategy &

Plan

TrainingMaterial

Training

Test

DevelopmentStrategy

Roll-Out

Logistics Logistics

HR

Pla

n

As -

Is

Alignment and Dependency Management

Operative Project Management

Op

era

tio

ns

HR Service

ModelDelivery

TestConfiguration

10/31/06 11/30/06 1/07/07 01/31/07

High level milestones Phase I

Transact: Transition

25

– Keep the relationship current and mutually beneficialProvide ongoing external outsourcing market insight (multi-client, best practices)

Facilitate successful handover of all contractual aspects– Clear understanding of scope model– Financial / billing structure and variable pricing components

– Identify stakeholder groups and define appropriate communication forums (i.e. monthly steering committee meetings)– Ensure mutual understanding of shared risks / rewards– Facilitate joint planning sessions

Support ongoing governance requirements

GovernOngoing1

Provide contract start-up support as required

– Internal culture and dynamics– Transition of services to supplier(s)

Assist in defining change management requirements

Phase 3 • Govern

26

Lessons Learned I

Perform an Unbiased EvaluationCompanies may be unaware of the many benefits to be derived from a successful end-to-end or partial HR outsourcing If a company’s internal HR organization has not engaged in successful systems upgrades, process re-engineering, or the establishment of an efficient shared services delivery model, they may not have kept pace with the productivity and quality improvements the providers have achieved Pricing has continued to improve with some per employee delivery charges reflecting half their cost in 2000

Leverage HRO for the Right ReasonsWhile HRO is often successfully used as a means for operational cost improvement, we find that outsourcing tied to real HR transformationis often the most successful HRO as a means of achieving HR transformation maximizes performance of the company through its people – not just the performance of HR Moving the HR function up the corporate value chain is where the big payoff in HRO is to be found

27

Lessons Learned II

Leverage Your Uniqueness to Attract Bidders Companies often have hidden leverage that can be used to make a marketin their HRO opportunity

If your organization is under the radar of the bigger, better known providers,attract their interest by considering a multi-process scope, or evenmulti-tower (HRO, FAO, Procurement, etc.) scope

Consider granting liberal publicity rights, especially if you are in anindustry or a geography that a provider is trying to gain traction in

Providers are growing increasingly selective in a supply-constrained market, and your best foot forward will ensure more interest – and lower prices – than you might have achieved otherwise

HRMS Value Builds the HRO Business Case. Those companies facing an Human Resource Management System (HRMS) replacement or upgrade should consider offering that implementation (and the post-roll out maintenance and enhancement) to one of several HRO providers in the market today who are qualified to perform that work Companies often miss the opportunity to achieve a two-for-one in thesecircumstances, and incur the churn, the time demands, and the expenseof two conversions (systems and HRO) rather than one

An aging HRMS is usually a very sound driver for making an economic case forsystems upgrade and outsourcing some processes at the same time

28

Lessons Learned III

Global RelationshipsAgreements should be structured in a manner that allows thecustomer to obtain services almost anywhere in the world

Without the need to renegotiate pricing, tax, liability, or other legal orcommercial terms

Addressing these issues up front and including “form” local enabling agreements and other appropriate documentation in the agreement should allow customers to move quickly when their business requiresHR services in a new market, in a new language, or in new modes ofservice delivery

Change Management The extent of change management required to source various HR services from various providers at different times is often underestimated

This can result in relationship challenges between the service provider andthe client’s employee population

Clients have been successful in these complex change management challenges by obtaining early executive commitment to the overall HROprogram, and for the associated and often considerable transformation activities that are required of an HR organization

29

The best companies outsource to win, not to shrink. They outsource to innovate faster and more cheaply in order to grow larger, gain market share, and hire more and different specialists – not to save money by firing more people.

– Thomas Friedman, The World is Flat

The best companies outsource to win, not to shrink. The best companies outsource to win, not to shrink. They outsource to innovate faster and more cheaply in They outsource to innovate faster and more cheaply in order to grow larger, gain market share, and hire more order to grow larger, gain market share, and hire more and different specialists and different specialists –– not to save money by firing not to save money by firing more peoplemore people..

– Thomas Friedman, The World is Flat

Closing thought: Why are we doing this?

All Rights Reserved © 2007

Questions and Answers