Enabling Technology

It is unmistakable that the HR technology industry has been revolutionized. Cloud-based HR systems are now available from many of the largest vendors in the market. These systems integrate payroll, HRMS, talent management and analytics processing into a single cloud-based service. Many HR leaders are challenged with mobile tools and new social recruiting systems that are making many of the legacy HR systems obsolete.

Nationwide(R) Signs Business Service Provider Agreement With Ultimate Software

WESTON, Fla., Feb. 8 /PRNewswire-FirstCall/ — Nationwide Mutual Insurance Company, one of the largest diversified insurance and financial services organizations in the world, has signed a business service provider agreement with The Ultimate Software Group, Inc. (Nasdaq: ULTI – News), a leading provider of Web-based payroll and workforce management solutions. The agreement, signed in December of 2004, grants Nationwide a non-exclusive license to use Ultimate Software’s UltiPro Workforce Management solution as a stand-alone or integrated offering for Nationwide customers

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Another Big HR BPO Win For Hewitt- Thomson

LINCOLNSHIRE, Ill. –(Business Wire)– Feb. 4, 2005 — Hewitt Associates (NYSE: HEW), a global human resources services firm, announced today it has signed a contract with The Thomson Corporation (NYSE: TOC; TSX: TOC), a global integrated information solutions provider, to provide HR business process outsourcing (BPO) services.

Under a five-year agreement, Hewitt will provide certain HR BPO services in the areas of benefits, compensation, payroll, learning and development and recruiting for Thomson’s 28,000 employees in the United States

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William Gallagher Associates and Genesys Partner to Deliver Best-In-Class HRO and Insurance Brokerage Solutions

Comprehensive Offerings Accelerate Revenue Growth and Offer Clients Flexibility and Choice

METHUEN, Mass. (January 31, 2005 ) – – Genesys, a provider of outsourcing services and software for human resources (HR) management, payroll, benefit administration and payments, self-service, learning, and performance management, and William Gallagher Associates (WGA), a leading provider of insurance brokerage, risk management and employee benefit services, today announced a strategic alliance to deliver best-in-class insurance brokerage and human resources outsourcing (HRO) solutions to customers

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Fidelity to handle HR for BASF

Fidelity Investments said Thursday that has won an outsourcing contract with BASF Corp. to handle that company’s human resources operations.

The five-year contract would have Fidelity conduct BASF’s payroll operations, health and welfare benefit programs and retirement plans for BASF’s nearly 20,000 U.S. employees and retirees. Financial terms of the contract were not disclosed.

Boston-based Fidelity touted the agreement reinforcing increased interest by major corporations to outsource their human resources operations to a single provider. The transition of BASF’s programs to Fidelity’s is expected to be complete by fall 2005, with most services being activate in early 2006.

BASF Corp., with headquarters in New Jersey, is the American affiliate of BASF AG, Ludwigshafen, Germany. It had sales of approximately $9 billion in 2003.

American Consolidated Media Selects Ultimate Software’s Intersourcing

WESTON, Fla., Jan. 25 /PRNewswire-FirstCall/ — Ultimate Software (Nasdaq: ULTI – News), a leading provider of Web-based payroll and workforce management solutions, announced today that American Consolidated Media, Inc. (ACM) has purchased UltiPro delivered through its hosted model, Intersourcing, on a per-employee-per-month pricing basis. The company made the choice in November 2004 and plans to go live on UltiPro by the end of January 2005.

A Dallas-based publisher of 34 community newspaper and shopper publications in Texas and Oklahoma, ACM found that the service bureau it had been using could not provide the strategic HR tools, management-level system access, or flexibility to maximize the productivity of its HR/payroll staff and position the company for growth

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Hewitt Associates Signs Rockwell Automation to a 15-Year HR Services Contract

LINCOLNSHIRE, Ill.–(BUSINESS WIRE)–Jan. 13, 2005–Hewitt Associates (NYSE:HEW), a global human resources services firm, announced today it has signed a 15-year contract with Rockwell Automation (NYSE:ROK) to provide HR business process outsourcing (BPO) services. Rockwell Automation provides industrial automation power, control and information solutions to global 500 corporations.

Under the agreement, Hewitt will provide workforce administration, payroll, health and welfare and defined benefit services to Rockwell Automation’s 15,000 U

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To Outsource or not to Outsource?

What every HR executive needs to know before outsourcing HRM.

by Naomi Lee Bloom

Part one of a series on what every HR executive needs to know before taking the plunge into HRM outsourcing.

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Whether or not your organization outsources one or more human resource management (HRM) tasks, functions, or processes today, or if youre considering or are already in a fairly comprehensive HRM BPO relationship, the responsibility for all such decisions lies very much with HR leadership. The CIO, CFO, and/or CEO may be the instigators, protagonists, or final approverswhich is increasingly the case in more comprehensive HRM BPO relationships but HR leadership must make any such HRM outsourcing decisions work and work well. Where there is responsibility, there is the opportunity for celebrating successes. This is always a good thing, albeit occurring less frequently than we would like. Unfortunately, there is also the all-toofrequent opportunity for paying the pricelitigation, lack of compliance, lost productivity, lost talent, lost opportunities, lost money, and/or disrupted career for failure. Since you are going to bear that responsibility, you will need to have the relevant information at your fingertips to assess the current state of outsourcing in your organization, to plan for any desirable additional outsourcing, and to head off at the pass any undesirable outsourcing adventures thrown out as suggestions at the next executive team meeting. Beginning with this column and continuing until Ive run out of questions, we are going to tackle first those issues that address the current state of your HRM outsourcing for which every HR leader needs ready answers. Then, just when youve thought that every question had been asked (for which youve prepared answers), were going to cover the questions that you should be prepared to answer when one of your colleaguesfresh back from a seminar or outsourcing provider sales pitchcasually suggests that more/less/total HRM outsourcing is just the ticket. By the time were finished, youll have questions and answers for every occasion. Simply load these into the PDA that you got for Chanukah/ Christmas/Kwanza, and you will be ready for HRM outsourcing action.




Before considering outsourcing, or any deployment tactic for your HRM policies, practices, and processes, we must ask and answer these most important questions:


What are the HRM business outcomes to which all of our HRM processes and the HRM delivery system (HRMDS) must contribute? How are these intended contributions going to be made and by when? At what levels of investment for what target values of the HRM outcome metrics? And who is accountable for what outcomes?


What would our HRM processes and HRMDS need to look like to achieve these business outcomes? How does this future state of our HRM business model compare to our current state HRM business model? How does this future state HRMDS compare to our current state HRMDS?


How are we planning to close these gaps? What are the benefits of closing these gaps? Are they sufficient to warrant the planned effort? Can we afford that plan?


The key point of these questions is that if you have no vision of your HRM business, no idea by what metrics youll measure progress toward that vision, and no idea what business outcomes are needed from the HRM aspects of the business, then youd better get these points nailed down before you dive into outsourcing or any other deployment tactic. Without a clear strategy for the HRM aspects of the business and without a well-defined HRM domain model, to include the relevant metrics, on what possible basis would you select outsourcing or any other deployment tactic? In the simplest of terms, if you dont know where youre going, it really doesnt matter your form of transportationyoull still end up running in a circle.  

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The Battle is Over, Now Who Won the War?

Are the customers the final winners in the Oracle-PeopleSoft battle?

by Glenn Davidson

Oracle and PeopleSoft have laid down their swords, but will customers be ready to take the next step to outsource?

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A colleague of mine made a trenchant comment about the recently resolved Oracle/PeopleSoft standoff: Sticking with one provider today is like ruling a European nation in 1914 with a collection of Victorian-era alliances sitting on your desk.


Now that the war is over and Oracle has strengthened its position in the HR application software market, perhaps a new analogy is apt. Assuming full responsibility for managing your companys transition from one HR application package to another could be just as daunting a task as rebuilding a war-torn country without allies.




For the HR outsourcing industry, the end of the Oracle/PeopleSoft battle provides an even larger opportunity to win and impress customers. For many companies, the question is no longer whether to stick with the status quo or pursue outsourcing. Change is now a given. From here, companies must decide the best way to manage and harness that change.


The Oracle/PeopleSoft war has made great copy in the business press with ever-changing proposals on the table, controversy over PeopleSoft profitability, a dethroned CEO, numerous legal battles and, in the end, yet another enormous victory for Oracle CEO Larry Ellison. While the business story has been fascinating, the anxiety of HR software customers has been real and growing.


Think for a moment of a PeopleSoft customer managing a massive installation. Oracle promises to fully update PeopleSoft for 10 yearsthe bat of an eyelash for global corporations. Furthermore, this company, which may have just recently installed or updated PeopleSoft, must decide when and if to migrate to the new Oracle/PeopleSoft product expected to reach the market in 30 to 36 months.


Customers grew increasingly uneasy about Oracles promises during the 19-month battle. According to a November survey by Boston-based AMR Research Inc., 63 percent of 150 PeopleSoft customers said they would cancel their software-support contacts if Oracle bought PeopleSoft and stopped enhancing the programs.




Without question, the combined Oracle/PeopleSoft offers customers great potential. But again, why should any enterprise make the risky decision of when and how to change trains? By making the move to an HR outsourcing provider, enterprises get a once-in-a-lifetime opportunity to outsource risk.


Theres even better news for HR outsourcing providers, because enterprises that have long used SAP installations may now want to take a second look at Oracle and HR outsourcers are an ideal opportunity to make this transition possible.


Since the battle for PeopleSoft began, the HR industry has changed dramatically. New HR outsourcing providers have emerged, major companies have merged, the customer base has grown dramatically, and the center of gravity has shifted from the software providers to the companies that can make these installations manageable and affordable.


Oracle emerges the winner in a very different world than when the battle began. Now they must work to make HR outsourcing a central part of their strategy. No doubt the customers will be there for Oraclethe question is whether customers looking for solutions, not software, will even know or care which application manages their HR service one or two generations from now.   

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New Privacy Rules

Big Brother is watching–HRO users and providers beware.

by William B. Bierce

As it turns out, Big Brother is watchingHRO users and providers beware.

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Federal privacy law is expanding with the Security Rule under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the privacy and civil liberties procedures established under the Intelligence Reform and Terrorism Prevention Act of 2004 (IRATPA) one for electronic health information, the other for virtually all personal information that could be discovered in homeland security and anti-terrorism investigations. For HRO customers, employees, and service providers, each law will impose new obligations and safeguards.




The HIPAA Security Rule reinforces the Transactions Rule and the Privacy Rule, which focus on the privacy of protected health information. The HIPAA Security Rule takes effect on April 21, 2005, for all covered entities except small health plans. In the private sector, all private health plans, healthcare providers, and healthcare clearinghouses must assure their customers that the integrity, confidentiality, and availability of electronic health information that they collect, maintain, use, or transmit will be protected. The goal is to ensure the integrity and confidentiality of the information and to protect against any reasonably anticipated threat or hazards to security or integrity of the information and unauthorized use or disclosure of the information. The HIPAA Security Rule will be an additional compliance requirement for HRO deals. There is no specific federal security standard, but only one that adopts reasonable and appropriate precautions. The enterprise customer cannot simply dump the HIPAA compliance obligation upon the service provider. As a best practice, HRO customers and their providers should review the design and implementation of the processes involved in compliance, and establish periodic reviews to deal with changes that might be needed. The costs of such periodic changes should be discussed as well.




Under IRATPA, executive departments and agencies must appoint a bevy of new privacy and civil liberties officers to protect against abuses of constitutional and statutory rights. Within the National Intelligence Department, a Civil Liberties Protection Officer, reporting directly to the Director of National Intelligence, will be appointed to meet constitutional, technological, and statutory mandates. To protect constitutional freedoms, this officer will be responsible for compliance, review, and assessment of complaints and other information indicating possible abuses of civil liberties and privacy in the administration of national intelligence programs. As a counterbalance to the increasing centralization of powers in the war on terrorism, a Privacy and Civil Liberties Oversight Board will be established within the Executive Office of the President as part of an enhanced system of checks and balances to protect the precious liberties that are vital to our way of life. In addition, Congress recommended each executive department or federal agency with law enforcement or anti-terrorism functions designate a privacy and civil liberties officer.




In the private sector, enterprises that either hire their own private security officers or rely upon service providers to do so will now be subject to new regulation. A private security officer is an individual other than an employee of a Federal, State, or local government, whose primary duty is to perform security services, full or part time, for consideration, whether armed or unarmed and in uniform or plain clothes. IRATPA authorizes prospective employers, after getting written consent from the prospective employee, to submit fingerprints for an authorized criminal history record information check for prospective private security officers. The employer must disclose the results to the prospective employee.




The new law opens the door to new regulation of access to criminal records in support of lawful employment beyond private security officers. The IRATPA law calls on the Attorney General to recommend to Congress any legislative improvements for the conduct of criminal history record checks for non-criminal justice purposes. As part of this process, commercially available databases will be reviewed as possible supplements to government records. Privacy rights will need further consideration, based on principles of employee consent, access to the records used if employment was denied, the disposition of fingerprint submissions after records are searched, an appeal mechanism, and penalties for misuse of the information. Employerswhether or not they outsource any HR administrative functionshould review and update their employee handbooks and the rules applicable to third parties having access to HR information.    

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Would You Like Fries With That?

In Part Two of an examination of self-service menus: How improving employee productivity goes beyond basic HRM self service.

by Naomi Lee Bloom

Last months column discussed the many self-service threads that must be woven together to deliver efficient business processes. For example, onboarding not only involves many HRM-specific self-service interactionsbenefits enrollment, work scheduling, and the provision of emergency contact informationbut it also involves many non-HRM self-service interactionsproviding office space and supplies; assigning computers, cell phones, facility keys, other equipment, and my personal favorite, the company AMEX card; granting specific system access permissions; and establishing personalized portal preferences, to name a few. Another common business process that involves both HRM and non-HRM selfservice interactions is business travelresearching benefit coverages and determining how they are affected if injuries or sickness occur while traveling; making travel reservations, including frequent flyer preferences; paying attention to travel allowances determined by position, salary level, etc.; making travel changes before and during the trip; and preparing the always popular travel expense and accomplishment report in conjunction with ones time and attendance report.

In each of these cases, its hard enough to achieve the productive level of self-service dialogue integration and data semantics when youre running a generic administrative application backbone for your entire organization. Imagine the challenge you face when you (1) outsource HRM processes in piecemeal to several providers or outsource your HRM processes to a single provider that uses separate applications to create their HRM delivery system (HRMDS) and outsources travel and expense to yet another provider, (2) have your own IT organization handle the granting of specific system access permissions, (3) use AMEX to manage card-related self-service transactions, (4) use your own facilities people to manage the assignment of offices, and then (5) outsource small supplies procurement to yet another provider. If you want to see a selfservice dialogue and semantic integration challenge that approaches getting all members of the United Nations to agree on anything, just try this back at the office.

Can it be done? Absolutely! But theres going to be quite a lot of work that is often overlooked in HRM outsourcing agreements.

During your transition to a comprehensive HRO providers HRMDS or your incorporation of a singleprocess outsourcing agreement into your own HRMDS, not only will there be some level of initial systems integration and process redesign work to be done by your organization, but youre going to be performing some degree of systems integration every time one of the participants changes their approach, systems, or, in the case of outsourced processes, pricing. Most important is to make sure that, via scenario testing, you understand all of the initial and ongoing systems integration work for which youll be responsible and, therefore, all of the costs and risks associated with your planned outsourcing arrangements. All too often this area of self-service integration, which is critical to achieving real productivity improvements, is overlooked.

One outcome of this analysis may be to encourage you to consider even more comprehensive HRM outsourcing, to include those ancillary processes that create self-service touch points that affect the majority of your workforce. Another outcome may be to include a much broader range of workforce-affecting business event scenarios in your assessment of the HRMDS of proposed comprehensive HRO providers, to determine just how integrated their self-service experience is in regards to dialogue protocol and data semantics. And you shouldnt be surprised to discover that those providers who are stitching together their delivery systems platform from an assortment of independently- developed commercially-available software components will have either had to do considerable systems integration work themselves or will be passing along to your workforce the demands of a nonintegrated and non-standard self-service experience.

There are many ways to achieve the level of selfservice dialogue and data consistency that increases user productivity. Ignoring these issues isnt likely to lead to any one of them.

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