HRO Innovation: Building Blocks to Derive Full Value

HRO Innovation:
Building Blocks to
Derive Full Value
Taking human resources outsourcing beyond lip service to the
adoption of best practices and better use of technology.
An exclusive report from BusinessWeek Research Services
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March 2008 2 BusinessWeek Research ServicesTable of Contents
Executive Summary .......................................................................................................4
Methodology ................................................................................................................4
Introduction.................................................................................................................5
Building Blocks to Longer Term Benefits ..........................................................................5
The Innovation Void......................................................................................................6
The Prerequisite for Success-Standardization...................................................................7
Looking Under the Service Provider's Hood .......................................................................8
Culture Shock ...............................................................................................................9
Conclusion ...................................................................................................................9
Sponsor's Statement: Giving Innovation a Fair Chance ......................................................10
BusinessWeek Research Services 3 March 2008Executive Summary
? Although early customers of human resources outsourcing (HRO) are moderately satisfied,many are not achieving the benefits they expected from these deals. Among them aretransforming HR into a strategic function, improving business results and enabling innova-tive process improvements. ? Some of the reasons for this dissatisfaction include a perceived lack of innovation by serviceproviders, provider resource constraints, an immature business model, the complexities ofglobal HRO and misaligned expectations.? Learning from the experience of satisfied HRO customers, it's clear that improving the situationrequires both buyers and service providers to view the relationship as a true partnership.They must come to a consensus regarding expectations and change management processesas well as building a better understanding of each other's constraints-be they financial,organizational or technical.? Buyers also must thoroughly evaluate the service provider's relationship with the vendorthat is providing the underlying technology, be willing to discuss adoption of the provider'sstandards and make the necessary internal and cultural process changes.? Service providers must commit to innovating when possible, representing themselvesaccurately, ensuring that the customer's requirements are a good fit for their expertise,helping customers with change management and ... [download for more]