The HRO marketplace is getting wise to really delivering innovation to customers. Now practitioners just need to embrace the capability.
A few years ago I attended one of the meetings of the then-nascent HR BPO Buyers Group, an influential yet informal association of the industry’s biggest multi-process, enterprise HRO practitioners. The group had gathered to discuss ways in which they could improve deal implementation, transform the retained organization to become more strategic, and drive continuous improvement in service delivery—all in all pretty straight forth goals.
One uncertainty was that buyers had trouble defining the innovations they had hoped to garner from their deals. When pressed on the issue, some of the HR executives were at a loss to say how HRO vendors could deliver more value.
Four years later, the issue of innovation remains unaddressed as many practitioners are still focused on getting HR services delivery right—a regrettable state of affairs because they should have moved on to more innovative initiatives some time ago. Instead, they’re still stuck on getting the fundamentals right.
But don’t fret, HRO providers are rapidly moving on to the next evolutionary step in the market’s maturity, and here’s where the innovation starts filtering through. New standardized solutions are hitting the marketplace, offering buyers low-cost, configurable services that will draw more buyers. Additionally, many vendors are teaming to tackle the thorny issue of talent management, rolling out integrated technology platforms to help address tasks such as compensation planning, recruitment, and succession. These initiatives all help to make HR more efficient and strategic.
However, a cornerstone of the innovations that service providers should be offering is workforce analytics. After all, they have the data and technology; it’s just a matter of serving it up in the most relevant manner. Other functional heads of any organization—sales, production, finance and accounting—all live and die by data. Why shouldn’t the CHRO?
Rishi Agarwal, the leader for global reporting and analytics at IBM’s HR Managed Business Process Services, told me that a movement is afoot to help HRO buyers better manage analytics, to help them build a business case when needed, and to give HR executives as well as the C-suite greater insight into their workforce needs.
“It’s educating the HR executives. What can you do with that data? What actions can you take with that information?” he explained, noting that IBM has developed solutions based on organizations’ answers to their top 100 critical human capital questions.
Providers can only do so much on their own in analytics. They need customers to grasp what kind of information is really relevant to the HR organization so they can extract that from their payroll or benefits or talent management systems. Agarwal said providers have the capabilities today to deliver a lot of the data HR needs to make more informed decisions; unfortunately, many have not evolved far enough in their HRO engagements to begin taking advantage of it.
How do we change this? Fortunately, some trends are leading companies down this path. In this current economic environment, nothing is above scrutiny, so you can be sure that executive leaders will demand data from every functional head. This is a good time to make HR analytics a priority. Are you spending too much on healthcare for ineligible dependents? Does your talent pipeline support near-future growth? Are enough employees using self-service to help reduce call-center costs? These are all questions you can answer today with the right tools.
HRO has stewed for a decade now, and it’s time that we as an industry begin shifting our discussion. Getting a paycheck right or tracking a corporate relocation shouldn’t be up for discussion anymore; either you can deliver or you can get out. What HR leaders want to hear now is how providers can further elevate the value that HR brings to the organization. And that path, right now, is all about the data.
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