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.

To understand where ExcellerateHRO came from, one must first understand the history of the two founding firms. Luckily for us, each company has a very complete corporate timeline which highlights major events and acquisitions. You can find Towers here, and EDS here. EDS brought to the equation significant BPO experience. Known as a systems integrator, they are also one of the leaders in IT outsourcing. A closer look at the timeline reveals that EDS has been a major player in the financial services industry as well. They have decades of experience in data management, communications and even ATM management dating back to 1978.

Also interesting is that EDS was scooping up management consulting experience at the same time as expanding IT capabilities. The 1995 acquisition of A. T. Kearney really put EDS on the management consulting map. (A.T. Kearney became independent again just this past year)
Perhaps most notable is that EDS, in case you have forgotten, was the company that brought us the “Cat Herders” commercial in the 2000 Super Bowl. “Herding cats” has since become part of the American business lexicon. At least I’d never heard it used before then. All in all, EDS has a very impressive history and track record.

In the meantime Towers Perrin was following the path that many HR consultancies were following. With its roots in actuarial services, Towers expanded into broad based HR consulting over time. In 1991, Towers officially recognized the administrative services area as a national practice with the formation of Towers Perrin Administrative Services (TPAS) division. It became, not surprisingly, the fastest growing Towers business: they caught the wave.

During the following 15 years, Towers entered into some very interesting alliances/partnerships. In September 2002, Towers was actually selected as the preferred provider of benefits administration by Exult. This meant that Exult would be “subcontracting” the benefits administration work for its clients to Towers. I guess that didn’t work out quite as planned after the Hewitt acquisition of Exult. Interesting “what if;” what if Towers had bought Exult instead, and had rolled it into ExcellerateHRO. Would the BPO experience of EDS made the Exult model profitable? We’ll never know.

Towers also entered into a partnership with American Century to provide pension administration services, while American Century p rovided 401(k) services. This agreement has survived through American Centuries evolution into JPMorgan Retirement Services which now has an agreement with ExcellerateHRO.

By the way, in my opinion, the moving force behind the JPMorgan business, Tom Kmak, provided the vision of the future while in Kansas City with American Century. It’s an interesting progression in and of itself. I met Tom about 13 years ago. It was clear to me back then that he would move on to the type of position he is in now.

So where does that leave us? ExcellerateHRO, in business now for 21 months, recognized as a leader in HR BPO, which doesn’t yet have a consistently agreed to definition. It’s CEO, Steve Bohannon, left in August of 2006: only 18 months after inception, but that is a topic for a future posting.

With recent wins at 7-11 and Bank of America, and with the financial heft of EDS supporting it, ExcellerateHRO is no doubt here to stay. The interesting journey, while rich in EDS and Towers history, is still just beginning for ExcellerateHRO.

About the author – Donald Glade is President and Founder of Sourcing Analytics, Inc., an independent consulting firm specializing in helping companies optimize their HR / benefits / payroll service partnerships through relationship management, financial analysis, and process improvement.

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