Multi-process HRSourcing

HRO & FAO: Entanglements Galore

We’ve spent all this effort differentiating HRO from FAO, and now they are starting to converge. With the announcement of the FAO World Conference scheduled for October 31, we’re now realizing the importance of the CFO and FAO in the HRO market.

by Harry Feinberg

Just as this issue of HRO Today went to press, we announced the 2006 FAO World Conference. Our sister magazine’s conference was a long time in the making. Finally, after two years of head fakes and rehearsals, FAO World is coming to the Marriott New York Financial Center on October 31 of this year. And the implications for HRO are a bit odd.

First, we need to acknowledge how much more difficult it is to launch a conference for finance leaders than for HR leaders. Finance leaders today harbor a siege mentality. Battered by Sarbanes-Oxley, frightened by having to risk their personal net worth when signing financial statements, and under pressure for financial results, finance people have no time to work on their interpersonal skills. They are time-constrained, resource-limited, and anti-social by nature. So getting them together, for any reason no matter how compelling, is a tough nut.

To make our FAO conference road even rougher, the experts say it is suicidal to launch a major business conference on Halloween (must be the ghouls and goblins.). But we are decidedly un-scared. After all, these were the same people who told us not to set our inaugural 2003 NYC HRO World Conference in July, the hottest month of the year. But we did. And by 2006, HRO World drew 4,000 people and 175 exhibitors.

FAO World 2006 in NYC will feature three brilliant keynotes with three world-first panels and six case studies. That is 30 headline-grabbing speakers, setting the pace for the now $64 billion FAO market. The market is now $64 billion because we have combined the traditional $39 billion FAO market with the $25 billion procurement outsourcing market. And, voila, all of a sudden the FAO industry is bigger than the $59 billion HRO market, and growing faster too.

To make it all more confusing, in more than 50 percent of U.S. companies, payroll and benefits and expense reporting are the responsibility of finance rather than HR. So bellwether payroll providers and longtime HRO stalwarts such as Ultimate Software and ADP are starting to play quite vigorously in the FAO market. Even big-time HRO firms Accenture and IBM recently announced mid-market FAO practices to complement their already-robust HRO offerings.

To provide even more crossovers and entanglements, we have paired FAO World with another one-day event, the CRO Conference, for corporate responsibility officers or  CROs. The CRO Conference takes place on November 1 in the same hotel. And, as it turns out, CROs are often the same people who make FAO decisions—CFOs, controllers, treasurers, or SVPs of finance, procurement, or compliance. Of course, CROs can also be SVPs or EVPs of legal, or HR. And you will see some of those at the FAO World and CRO Conferences as well.

This FAO-CRO pairing makes good sense from a time management perspective. With SOX and compliance challenges painfully costly, teaming outsourcing up with corporate responsibility and compliance is a no-brainer.

CRO plays right into our belief that compliance is the life’s blood of capitalism. I comply with the government’s request that I pay my taxes and not infringe on my neighbor’s rights. My employees comply with my customer’s wishes and with the need to respect each other. My customer complies with my requirement that he continue to pay for my product. My shareholders comply with my need to run the company so that I can comply with their ROI expectations. In the end, CRO is about accountabilities to stakeholders in all their flavors. And as the CRO movement evolves, expect to see CRO turn into a corporate membership club whose market-based power to keep companies accountable exceeds that of any goofy, regulatory agency.

So now that we have your interest whetted, you will want to discover more about FAO World at, and about CRO at You will see more about the events in upcoming issues of HRO Today also. Just stay tuned for more entanglements.

Tags: Multi-Processed HR, Sourcing

Recent Articles