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.

Time Warner Selects Pilat HR Solutions to Manage Talent

LEBANON, New Jersey (June 14, 2005) – – Pilat HR Solutions, a leading provider of talent management consulting and software, announced today the signing of an agreement with Time Warner Inc. (New York, NY), a leading global media and entertainment company, to provide them with HR PulseT, a web-based human resource system. This configurable software will provide Time Warner with an enterprise-wide succession planning solution.

“This agreement underscores the enterprise-wide capabilities that the HR PulseT software can address

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ADP Announces Availability of Global Outsourcing Solution in Canada

Industry leader expands GlobalView service to manage HR and payroll for large-scale domestic and multinational companies seeking a single outsourcing provider

TORONTO, June 13 /CNW/ – ADP Canada, part of the Employer Services International division, today announced the availability of ADP’s new worldwide outsourcing solution – GlobalView(SM). Currently available in Asia and Europe, ADP’s GlobalView offering is an end-to-end solution enabling consistent payroll and human resources administration of large-scale domestic and multinational companies – all from a single provider

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Outsourcing Software Solutions

Addressing the legal challenges and risks of outsourcing software solutions. How to reduce the prospect of disagreements and expensive litigation.

by Thomas C. Greble, John Gliedman

 

Outsourcing providers typically promise a software-based solution that is seamless from the customers point of view. But behind the seamless screen there is often an array of third-party software supporting the outsourcers services. A key to making sure that a so-called seamless solution does not come apart at the seams is making sure that the underlying software provider contracts are in sync with the customer-facing master outsourcing agreement.

 

Difficulties can arise in an outsourcing environment when the lines of responsibility for compliance with third-party software licensing requirements are not clearly drawn between the customer and the provider. In Maury v. Computer Sciences Corp., 2005 U.S. Dist. Lexis 4206, (D. Conn. Mar. 16, 2005), a provider employee claimed that he was discharged in retaliation for his efforts to stop the installation and use of unlicensed software at the customers work site. The court noted that incidents of unlicensed software use occurred in part because the outsourcing provider and the customer could not agree on who was responsible for purchasing the software that the employees needed to do their jobs.

 

Off-the-shelf software is software that can be taken off the Web or out of a box, installed, and used as part of a larger solution. Before entering into an outsourcing arrangement, the provider should consider whether it needs to have access to the customers software to add new users. If so, it will need to review the customers licenses to ensure that it has the proper rights. It is important that a customer knows what software license and maintenance provisions were put in place during the outsourcing relationship and will continue following termination of the relationship.

 

Perhaps the biggest issue facing an outsourcer and its customers is license management in a multiple-user setting. It is conceivable that an outsourcer could neglect to obtain the proper number of licenses, either to cut corners or out of ignorance of the licensing terms of the software. To protect itself in such situations, the customer should include a provision indemnifying itself if the outsourcer violates applicable lawsuch as the copyright lawsin connection with providing the services. The customer must verify license compliance as well because the vendor may not have sufficient assets to make indemnity meaningful or because litigation to enforce the indemnification clause may be too expensive or time consuming.

 

Suppose the outsourcer has an agreement with a software provider to customize the software. The agreement may lack definitive service levels that reflect the performance quality expectations of the customer. This discrepancy can create an issue for the master outsourcing agreement if not anticipated in advance. The need for coordination is also necessary to avoid potential problems with the software itself, and it is nave for the customer to simply leave this in the hands of the outsourcing company and its software vendor. For example, the software provider agreements ought to have strong virus protection and IP infringement indemnities so as to meet the customer concerns set forth in the agreement. Along these lines, the customer should require its outsourcer to bind its software providers to safeguard its confidential data with which it comes in contact.

 

What about open source software? If you think its not an issue since your company doesnt use it, think againmaybe you do and dont realize it. The use of open source software is increasingly an issue in corporate environments, as management begins to realize that employees have incorporated open source products into the environment, often without proper safeguards and controls, because theyre free, easy to install, and no purchasing review is required. If software-related functions are outsourced, the use of open source software (whether it is prohibited or allowed) should be considered in any situation in which the customer may access outside software, so that the company isnt faced with an open source software licensing issue down the road.

 

The centrality of software to all HRO transactions requires close coordination of the various moving parts that comprise an outsourcing arrangement. Whether you are an outsourcing provider or a customer, the lesson to be drawn from cases such as Maury is the importance of legal counselbeing on top of the issues of third-party software contracts from the outset of the transaction.  

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Answers to the “Why Aren’t We…?” Questions

Part two in the series on having all the right answers to those tricky outsourcing questions.

by Naomi Lee Bloom

As promised last month, here are more zingers for evaluating any unsolicited outsourcing proposals that come at you, not as a byproduct of strategic HRM and HRMDS (human resources management delivery systems) planning although they’re useful in that context as wellbut as a response to the “Why arent we moving aggressively to comprehensive HRM BPO?” question often asked by a returnee from the latest provider briefing or sales event cloaked in thought leadership. Here we go:

 

Who’s going to manage the financial aspects of this outsourcing proposal to ensure that we achieve the intended results? How? Do we have the people, processes, and technology to do this effectively? What would it take to put them in place? Has this been factored into the outsourcing idea or proposal?

 

Who’s going to manage the implementation, including systems integration, aspects of this outsourcing proposal to ensure that we achieve the intended results? How? Do we have the people, processes, and technology to do this effectively? What would it take to put those people, processes, and technology in place? Has this been considered in the outsourcing proposal?

 

Who’s going to manage the performance aspects of this outsourcing proposal to ensure that we achieve the intended results? How? Do we have the people, processes, and technology to do this effectively? What would it take to put those in place? Is this part of the business case for the outsourcing proposal?

 

Has our lawyer negotiated at least as many HRM outsourcing contracts as the outsourcing providers lawyer? Do we have the legal and vendor management horsepower needed to make this work for our organization? What is that aspect of the arrangement going to cost?

 

Where will our HR executive, CFO, CIO, or other executives be two years from now? Will they be as enthusiastic (or as unenthusiastic) about this proposal if they are going to be judged long-term on how well this strategy works for our organization?

 

Where will our outsourcing providers account executive, operations executive, or other executives be two years from now? Do they have as much at stake as we do professionally? Whats their track record for delivery? Whats their record for staying in place long enough to experience the reality of meeting their commitments?

 

What if the outsourcing provider our organization likes and selects is then acquired by an outsourcing provider our organization rejected because of their management style, ethics, customer service track record, technology, geographic coverage, etc.? How easily can our company get out of the outsourcing contract?

 

What if the outsourcing provider we like and selected decides to exit the business (for whatever reasons)? How easily can our organization find another provider, migrate to that provider, and absorb the costs and disruption of such a change?

 

Frankly, how can our organization escape from any comprehensive HRM BPO provider, among many other considerations, when a full self-service rollout is part of the proposal and any change in that rollout, e.g. to another providers self-service software, would be visible and disruptive to our entire workforce?

 

If we accept this outsourcing proposal, is there any going back once its implemented? If our company changes its mind in two or three years, whats involved in bringing this activity, function, process, or integrated processes, along with the relevant HRMDS components, back in-house? What would it take to move to another provider once we have implemented with the first one? Is our company going down an irreversible path? Do we care? As strongly as I support the use of HRM outsourcing from gaining access to expertise via the use of expert resources to using business applications packages rather than rolling our own to every flavor of HRM and IT process outsourcingthere really are some outsourcing proposals that should be drowned at birth. Hopefully, the questions in last months and this months columns can be used, judiciously, as the cement shoes for that purpose. Next months column provides the final questions to be considered when anyone makes specific outsourcing suggestions.   

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ADP Helps Hard Rock Hotel & Casino Cash In On Savings

ROSELAND, N.J.–(BUSINESS WIRE)–May 31, 2005–ADP NationalAccount Services, part of the Employer Services Division, a leadingprovider of outsourced payroll, benefits and HR services for largeemployers, today announced that Hard Rock Hotel & Casino in Las Vegashas begun implementation of its PayForce(TM) solution to streamlinepayroll processes and provide greater access to data throughout theenterprise. ADP PayForce is a flexible, paperless payroll solution,with an intuitive Web-based interface that results in greater processefficiencies and lower total cost of ownership per paycheck. Hard RockHotel & Casino is ADP’s 100th PayForce customer since the offering wasintroduced to national account clients in July 2003.

PayForce is designed for growing organizations requiring a robust,quickly-implemented payroll solution that provides built-in bestpractices in a Web-based environment. Additionally, ADP’s TotalPay,combined with iPaystatements, allow customers to deliver a totallypaperless payroll solution to their employees, which can eliminate thecosts of printing, lost checks, and check fraud and save employeesfrom having to wait in line to cash their pay checks.

Today, PayForce customers have an opportunity to leverage ADP’sSelf Service offering, which allows employees to access HR and payrollinformation anytime with only a Web browser and an Internetconnection. As a hosted solution, ADP maintains all the software andhardware, enabling customers to receive version enhancements withoutinfrastructure expenses or additional charges for upgrades.

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SAP Sets New Standards for Business Process Outsourcing

Unveils BPO Services Powered bySAP; Certified Outsourcing and Collaboration with Leading BPOProviders Enables Companies to Drive Growth and Innovation

NEWYORK, N.Y. – April 12, 2005 – Further delivering on its road map forbusiness process outsourcing (BPO), SAP AG (NYSE: SAP) today announceda new program that helps businesses execute a successful outsourcingstrategy. Under the BPO Services Powered by SAP program, SAP endorsesand actively supports the set up and ongoing operations of BPO deliveryplatforms in close collaboration with leading BPO providers, includingACS, ADP Inc., EDS and LogicaCMG, as initial program partners for theHuman Resources Outsourcing Segment. These platforms, which are basedupon the latest versions of SAPs best-in-class solutions and deployedin a cost-effective and standard way, enable companies to benefit fromprocess automation and innovation when outsourcing human resources orother administrative processes. The announcement was made inconjunction with HRO World, a leading human resources and outsourcingshow being held in New York, N.Y., April 12-14.

Companiesaround the globe are increasingly looking to outsource administrativebusiness functions, allowing them to focus more on their corecompetencies and to free up valuable resources to drive growth andinnovation. Compared to standard business process outsourcing, BPOServices Powered by SAP includes a unique combination of SAPslong-term viability as a partner and experience in providing innovativebusiness solutions with complementary services from leading BPOproviders. Together, these components provide exceptionally low risk,cut transition and operations costs and improve standardization ofquality business processes.

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CSC Wins Contract Worth Approximately $230 Million to Support NASAs Shared Services Center at Stennis Space Center

EL SEGUNDO, Calif., May 11 /PRNewswire-FirstCall/ — Computer Sciences Corporation announced today that it has won a contract to provide support servicesto the new National Aeronautics and Space Administration (NASA) SharedServices Center (NSSC) at Stennis Space Center, Miss. CSC estimates thevalue of the award, which has a five-year base period and five one-yearoptions, to be approximately $230 million if all options are exercised.

Underthe terms of the agreement, CSC will provide administrative, financial,human resources and procurement support services to approximately20,000 NASA employees, applicants, contractors and university partners.

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Duke Energy Inks HRO Contract with Hewitt

CHARLOTTE, N.C. — Duke Energy today announced that Hewitt Associates, a global human resources services firm, has been selected to provide comprehensive HR back-office administrative services to the companys U

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If Your Only Tool Is a Hammer, Every Challenge Looks Like a Nail

Avoiding those uncomfortable moments when everyone is, miraculously, an outsourcing guru.

by Naomi Lee Bloom

My previous three columns helped ensure that youre prepared to answer any question about the current state of your organizations HRM outsourcing. Now its time to ask your own questions when colleagues throw out the Why dont we? questions. When faced with an expression of outsourcing interest or opportunities for further outsourcing, one should always ask (and be prepared to answer) the following:

 

* Is this outsourcing proposal compatible with our strategic business and HRM plans (to improve our competencies in our strategic HRM processes), or is it intended to address temporary tactical problems (such as a reluctance to invest in the next HRMS upgrade)?

* Are the outsourcers employees (or our employees transferred to the outsourcer) going to give us better service than our own workforce? Why? How? In the face of tight deadlines and downward pricing pressures? If the provider is hiring our staff, how will we gain an increase in their proficiency? If the provider isnt hiring our staff, what will we do with them?

* How will we develop excellent HRM and HRMDS strategists, HR generalists and specialists, and HRM software vendor and outsourcing provider managers if we accept this outsourcing proposal?

* How will we control costs with sufficient granularity if the provider bundles everything into one fee? What pricing structure(s) would work best? Is that what is proposed?

* What are the implications of this outsourcing proposal if we merge with another organization of our size? What if we divest a major part of our organization?

* What are the implications of this outsourcing proposal if another organization wants to buy us? Are there any unattractive contract buyout provisions? Any unattractive migration considerations if we were to move to the acquirers capabilities?

* What are the implications of this outsourcing proposal if we sell off peripheral businesses and focus on our core business(es)? How are contract fees adjusted when business activity slows and/or we downsize? What about when we grow and/or business activity quickens?

* How do we know that these financial projections are accurate? What assumptions (simplifying, optimistic, or plain misleading) have been used to prepare these numbers?

* Since change is a sure thing, how can we be sure that the proposed outsourcing contract will protect us as much as it protects the outsourcing provider when change happens? Against what change scenarios should we test this proposal? What changes will our employees/managers notice? Will these changes be received as positive? Whats the upside and downside on their reactions on their productivity and on organizational outcomes?

*Will our best HR and HRMDS staff resign the minute they sense the intent of this outsourcing proposal? Whats the upside and downside if they do?

* Why is this being discussed/proposed now? Whats the impetus for this outsourcing proposal? Is the timing convenient with respect to our HRMDS planning cycle, budget cycle, organizational change cycle, etc.?

* What is the fit between whats being proposed in terms of process design, data structures, business rules, etc., and what we do today or wish to do? What scenarios should we use to test all the important topics?

* Is the impetus for this outsourcing proposal contained in an investment plan to bring our current HRMDS to meet the standard needed to sustain our business? If we took a careful look at what our HRMDS needs to support our business outcomes, would we be shocked by the level of investment?

* Are there any unspoken motivations behind this outsourcing proposal, e.g., is it a substitute for examining what may have been poor decisions already made in our choice of ERP vendors, systems integrators, benefits consultants, etc.? Are there internal politics at work? Is it possible that the proposer is hoping to deflect attention from their own part of the organization by stirring up some dust in HR? Is it possible that the outsourcing provider putting forth this proposal has something other than our business needs and best outcomes in mind?

 

If you think these are tough questions, the best are yet to come! When I finish this series, it will be time to propose specific scenarios, affectionately known as Naomis Killer Scenarios, to help ferret out reliable answers to those questions that bear on provider capabilities.  

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