With transformation the buzzword at this year’s event in Brussels and a record number of HR buyers in attendance, HRO World Europe’s third annual event finally lived up to the hype.
When HRO World Europe debuted in the fall of 2004, it was admittedly more smoke than fire. HRO, in the form of enterprise-level outsourcing, was nearly 100-percent a U.S. and U.K. phenomenon. Exult in the U.S. was lighting the world on fire with more than a dozen $100 million-plus deals. Companies in the Nordics and Benelux were just starting to get the bug. The City of Copenhagen was in the process of deciding to go HRO. In sum, HRO was a curiosity that early adopters were anxious to learn more about. Regardless, 250 people burning with questions and energy filled the Conrad Hotel on Brussels’ Avenue Louise.
By 2005, the crowd had grown to nearly 350, and the hotel was packed. Big deals were on the horizon. The Royal Mail was talking about a potential decision to come in the future. And BT, BAE, P&G, and other multinationals were being more open than ever about the realities of their enterprise-level deals. Yet the promised tipping point had yet to come, especially in terms of big buyers talking about their one-, two- or-three-domain (i.e., non-enterprise-level HRO) HR transformation projects.
HRO World Europe’s 2006 iteration, on the other hand, represented the true tipping point, in three ways:
• First, the number of HR buyers and their sourcing advisory representatives comprised 50 percent of the 340 attendees. Note: In business-to-business conference terms, for buyers to make up as much as half of the audience is virtually unheard of. One-third is considered very good, and one-quarter is typically quite satisfactory.
Not only were buyers sitting at attention in the Conrad Hotel ballroom, but they were gracing the stage as well. During the next two days, HR executives from Bayer AG, Centrica Plc, Deutsche Bank AG, Electrolux, Ikea, Lloyds TSB, Marriot Hotels, Procter & Gamble, RBS Group, Royal Mail, and Unilever discussed their HR transformation experiences—the good, the bad, and the not so beautiful. To get the full experience, buyers were invited to a private session sponsored by HROA Europe. The 40-minute meeting was the launch of the Buyers Forum—an assembly of HR leaders who are entrenched in transformation in Europe.
Where the buyers go, the sourcing advisors follow. And follow they did. On day two analysts offered their viewpoints on what is shaping the transformation market. Helen Neale from NelsonHall stressed that “despite labor laws, outsourcing is happening [in Europe] and globalization is inevitable.” Mike Friend, research manager, European business services, IDC, added “lots of shared-services activity is not tied to political policy … HRO and ITO are happening in France.” The majority of panelists—which also included Cathy Tornbohm of Gartner, and Euan Davis, senior analyst at Forrester—named the Nordic regions and the Netherlands as areas receptive to multi-process outsourcing.
• Second, the vendors in attendance all now understand that not all clients are the same, and some clients are more in a vendor’s sweet spot than others. In years past, vendors treated all potential clients as equal and were largely oblivious to the need for a good match to make strong, long-term, and mutually beneficial relationships. Christian Adlung, the EMEA sales director for Convergys, put it succinctly: “Like our fellow providers, we have all now had the experience of clients who were a mismatch,” he admitted. “Fortunately, most of us were able to work out our differences with our client, which was often a process as messy as marital counseling.”
• Third, the discussion of the state of the market and of client relationships was much more frank than in the past. For many, the age of endless hype has ended, replaced by open and honest sharing of goals, problems, and solutions. As Albert Martens, head of corporate HR for IKEA, said, “The time for promotion is over, and the time for open and honest discussion has come.”
Conference Co-Chair Andrew Kris summarized the new tone of the industry in his closing remarks, when he mentioned that the energy has switched from concern about the appropriateness of HRO, which he characterized as “a tool to do a job.” The new tone, Kris said, is “about HR transformation, a process of improving HR’s ability to drive value for organizations. It’s no longer whether HRO is appropriate. The question is how to transform HR to deliver more bottom-line value than before. More often than ever, HR outsourcing is the answer, but never the objective. The objective is value, and transformation is the key.”