Tuesday, December 12, 2006

How Did They Get Here - ExcellerateHRO

In March of 2006, a study by Forrester Research was released which ranked ExcellerateHRO as a “Leader” among HR BPO providers. Excuse me? I mean who were these guys? Anyone not paying close attention might have missed that ExcellerateHRO had only been in business for 1 year at that point. If you were busy with your head down at your desk maybe you didn’t know that ExcellerateHRO is the joint venture created in March 2005 by Towers Perrin and EDS. It is also the subject of this week’s How Did They Get Here series on the inimitable SystematicHR.

Tuesday, December 5, 2006

How did they get here – ADP

Next in our “How did they get here” series, I take a look at ADP, perhaps the most acquisitive organization in the payroll / HR / benefits space. As such, I certainly cannot begin to recount all of the activity that got ADP where it is in this space. I will however try to hit the highlights.

Tuesday, November 28, 2006

How Did They Get Here – Hewitt Associates

The other day I was trying to remember what happened to a company in the benefits administration space I used to deal with quite regularly. Of course, as been happening with increasing regularity, it had been acquired some years ago by another provider and has been all but lost except in the memories of those of us in the business who either worked with or for them.

The list of these long gone companies is extensive and made me think for a moment about doing a “where are they now” series. After noodling on it for a while, I realized a more interesting tactic would be to take a look at today’s companies and see how they got to where they are today.

Tuesday, November 14, 2006

Hewitt’s Financial Results - What Do They Mean?

Hewitt’s very public financial difficulties continue today, days after announcing quarter-end September 30, 2006 financial results. It is not my intention to single out Hewitt by writing about them again. Rather, as the recognized leader in HRO, Hewitt can be viewed as the industry bellwether and can provide insight into the dynamics of the industry.

Taking a look at the results as reported by workforce.com, we see that Hewitt posted modest (0.9%) revenue gains year over year while net income was down 43%. Surprisingly, net income was only $23 million on $727 million in revenue. A deeper dive reveals that the outsourcing arm of the business (over half of the business) experienced declining revenue, income and profitability

Tuesday, November 7, 2006

Human Resources and the Mid-Term Election

Today is Election Day!!! After today, we will no longer be bombarded with political ads slinging mud right out of our TV sets. After today, most of the nightly news will go back to the typical and sensationalist news of the day. I really won’t miss the political mudslinging, but election season is always an exciting time in my mind.

Regardless of political stripe, persuasion, or philosophy, it’s a great time to check the pulse of the nation and determine if we are on the right course or if, as a nation, we need a course correction. And today’s election should prove to be more spell binding and exciting than the typical mid-term election.

All the news is a twitter with election coverage, and every pundit is pontificating and speculating as to the future composition of the House and Senate. At the risk of alienating our significant non-American readership, here today we take a passing glance at the American Election.

Tuesday, October 31, 2006

Social Security Reform Revisited

This past week, President Bush resurrected the issue of Social Security Reform. As part of this political season, it seems he wants to flex some presidential muscle by attempting to re-establish his core initiatives which have stalled in congress over the past 6 years. Clearly, the war on terror has made a robust domestic agenda difficult.

On the topic of Social Security Reform, much has been written - particularly on privatization. I wrote something in a comment on SystematicHR back in April before becoming a regular contributor. The general SystematicHR readership has grown since then. For some, posting it here again will be a repeat, but many of the readers of this blog get only the daily subscription and do not visit the site to read the comments, so for them this will be new.

So in recognition of the resurrection of Social Security Reform I give you:

Social Security - Private Ownership, Government Control

Friday, October 27, 2006

Hewitt’s Lessons Learned

From time to time companies exhibit moments of organizational maturity not often enough seen in the market. This week’s moment comes to us courtesy of Hewitt Associates’ Mike Wright, global HRO sales co-leader, during his presentation last month at the Conference Board’s 2006 Human Resource Outsourcing Conference in Chicago.

Thank you (again) to Jessica Marquez at Workforce.com for bringing this to our attention with her fine and timely reporting in a piece entitled Hewitt Shifts Course After Recent Missteps. I write about it today not merely as a follow up to my previous articles here and here, but rather because Mike Wright’s comments are shocking in their clarity and instructive anyone looking at the HRO business today.

Tuesday, October 10, 2006

100% Claims Audits Revisited

Nearly one year ago, Double Dubs graciously asked me to be a regular contributor on this most amazing blog of his. I think all of us can agree that what he has built here is impressive. He has created a reference tool for HR professionals (both in and out of the technology space) to come research and learn. He provides links and footnotes for us to delve as deeply as we care to delve into his posting of the day.

Tuesday, October 3, 2006

A Technological Approach to Claims Audit

The last two weeks I wrote about the ineffectiveness of traditional claims audit and the inherent conflict of interest some companies face when they perform such audits. This week I’d like to introduce a company that brings a different approach to the industry: HR Best Practices.

HR Best Practices was founded by Howard Gerver five or six years ago. I first met Howie 3 years ago at the 2003 HRO World Conference. From the beginning, I could tell he was one of those people who just plain “get it”. Since then I’ve found out more about his company and approach to health care claims audit. I believe it’s unique. If anyone reading this knows of other companies taking a similar approach, I’d love to know about them.

Tuesday, September 26, 2006

Independent Consulting: Perception or Reality?

Last week, Barbara Martinez wrote a very in-depth article which appeared on the front page of the Wall Street Journal (September 18, 2006; Page A1). A subscription to WSJOnline is necessary to view the article, but I encourage you to read it if at all possible. In the article MS. Martinez writes about independence in the health care industry with regards to product placement and claims audit. More on that in a moment, in the meantime, allow me to digress.

Enron. The word means different things to different people. For people working in the audit and professional services industry, it has a very personal meaning. The Enron scandal affected hundred of thousands of lives: perhaps millions. Tens of thousands of Enron and Arthur Andersen employees lost their jobs directly as a result of the scandal, and the ripples continue to be felt today.

Tuesday, September 19, 2006

TCO: Measuring Risk

In a prior post I wrote about the Total Cost of Ownership (“TCO”) in the context of risk. Today I would like to write about techniques to measure the cost of risk, particularly in the case of administering benefit plans.

The shortfall of TCO modeling for administrative functions is that typically, quantifying the costs of poor administration is difficult to accomplish. Just as with investment returns “past performance is not an indicator of future returns,” if poor administration in the past resulted in additional costs, we don’t know that it will in the future.

Tuesday, August 22, 2006

Russ Fradin: The New CEO at Hewitt Associates

Last week I promised to write about measuring risk related to group benefit plans and techniques on evidence based cost avoidance (when I put it that way, it sounds so boring!) I’m sorry, but some other news broke last week that I felt compelled to comment on. I’ll get back to measuring risk next week.

Last week, Hewitt Associates announced that it has appointed Russell P. Fradin as the company’s new chairman and chief executive officer, beginning September 5, 2006. The announcement came the week before a rather disastrous 3rd quarter earnings report in which the company posted a net loss of $202 million or $1.88 per share.

The announcement was seemingly timed to help mute the bad news that was coming. Indeed, the stock has taken a 10% hit since earnings were announced which offset the stock rise after the Fradin announcement.

But what can Russ Fradin do for Hewitt?

Tuesday, August 15, 2006

TCO in the Context of Risk

Many regular readers of SystematicHR know that I conducted a Total Cost of Ownership study to determine the cost of benefits administration. The results were released last December.

Double Dubs commented on it here, and it is how I originally came to find his great blog.
Generally, TCO is a means at getting at hidden costs. It is a way to determine the full and total cost of manufacturing, maintaining, administering, etc. a widget or function. Unfortunately, there is something TCO can’t do: measure and calculate risk or factor in quality.

Tuesday, August 8, 2006

Relationship Management - Measuring Satisfaction

How do you know when an outsourcing initiative has been successful? At what point can you sit back, look at all that has been done and actually congratulate yourselves on a successful implementation, transition and effective and stable ongoing processing environment.

I think back to the system person I dealt with on a 401(k) conversion one time. This particular provider had gone through a major conversion to a new recordkeeping system and this system person was very proud. He claimed a perfect conversion. “Not a penny was lost. All financial data reconciled to the penny!”


Tuesday, August 1, 2006

TCO and the Line Manager

In the jobs I had before I started my own business, I always felt an important part of my responsibility was to develop the people who reported to me. In fact, I always went a step beyond and looked to develop one person to the point at which they could do my job.

Of course, this wasn’t complete altruism. In fact, it was rather selfish of me.

Friday, July 28, 2006

TCO: A Case Study

Some time ago, a fortune 500 company acquired another fortune 500 company. At the time, the acquiring company was a PeopleSoft shop for payroll and HRIS. The acquired company had been outsourcing payroll and accessed a hosted HRIS system for their HR needs. Both companies were roughly the same size and a decision needed to be made: how should the combined company process payroll and what should be the combined company’s HRIS?

Tuesday, July 18, 2006

An Introduction to TCO

Earlier this week, Elaine commented on my article from last week How Much Can Outsourcing Really Save. Elaine writes:

“Frankly, there are so many articles published stating different outcome of offshoring and outsourcing ventures. More often than not, people are confused on which side to believe in and which is telling the truth or lying.”

Elaine is, of course, correct in the sense that the savings that can be derived from outsourcing will be debated forever. Although, I would maintain that no one is actually lying. It all depends on how you count the beans.

It is for this reason that I believe that the Total Cost of Ownership (TCO) model is the most effective at determining the cost impact of changing any administrative environment. Today, I’d like to introduce the concepts around TCO.

Tuesday, July 11, 2006

How Much Can Outsourcing Really Save?

I set this article aside some time ago with the intention of commenting on it at some point. Now is as good a time as any.

The story, “Survey: Outsourcing saves less than claimed” is based on a survey conducted by TPI. The gist of the story is summed up in the lead:

“Outsourcing of information technology and business services delivers average cost savings of 15 percent, a survey found on Thursday, disproving market claims that outsourcing can reduce costs by more than 60 percent.”


Tuesday, June 27, 2006

Shake up at Hewitt

The rumors have been around in the market for some time now, but this past week it showed up in print:

What does surprise Pramuk and other experts, however, is that Hewitt doesn’t have a successor in place for Salvino. “That certainly could be hinting at a sale of its HRO business,” he says.

Marc Pramuk, v.p. of research at Everest Group, was referring to the announced departure of Michael Salvino, co-leader of Hewitt Associates’ HR outsourcing sales and accounts group. The quote appears in an article on workforce.com by Jessica Marquez. The announcement comes on the heels of the announced resignations of Hewitt’s CEO Dale Gifford and Bryan Doyle, president of the HR outsourcing business.

Tuesday, June 13, 2006

It’s Offshoring, Not Outsourcing!!!!

I am taking a break this week from my discussion of vendor management in order to use this particular platform to rant a bit about a pet peeve of mine. As the title suggests, it’s to rant about the misuse of the word “outsourcing” when people are really referring to “offshoring”.


Tuesday, June 6, 2006

Relationship Management V – Implementation

I was talking with a client this week about the implementation of an outsourced solution to payroll, HRIS and benefits administration that he would soon be going through.  He has every intention of engaging third party assistance with the implementation. He’s seen things go very wrong for companies who attempted to go it alone with their outsource providers. How or why implementations go wrong and fail can be debated. We can talk about bad project management, unrealistic time frames, faulty technology and the like, but that really isn’t the topic of this week’s posting.

No, I’d like to talk about the successful implementation.

Tuesday, May 30, 2006

Relationship Management IV – Project Management


So you’ve outsourced HRIS, or payroll, or H&W benefits administration, or applicant tracking, or any one of numerous HR functions and now your job is finished, right? Well most of you know the answer to that is no.

Tuesday, May 23, 2006

Relationship Management III – The Culture of Accommodation

Last week we saw what happens when service providers fail to actively manage client expectations. Client satisfaction suffers, and ultimately the relationship can become at risk.We explored the notion that client expectations are frequently mishandled during the sales cycle, but this week I’d like to talk about how the ongoing relationship is often set up for failure due to what I call the culture of accommodation.

Tuesday, May 16, 2006

Relationship Management II - Managing Expectations

Last week I wrote, in part, about outsourced service providers’ client satisfaction programs which monitor how satisfied clients are with performance. At any given point in time, there are a number of clients who don’t believe their service providers are meeting, let alone exceeding, expectations.

Tuesday, May 9, 2006

Relationship Management - Part I

Back in January, Double Dubs posted an article titled Vendor or Client - Who’s Fault Is It?

The question is not an academic one, as companies spend a combined fortune greater than the GDP of many countries in search of the seemingly elusive quality service they and their employees so richly deserve. What is really going on here?