The HR BPO Buyers Advisory Board facilitates change for the better in a fast-paced marketplace.
April’s HRO New York conference signaled the official introduction of the HR BPO Buyers Advisory Board, a.k.a. The Buyers Group. Initially formed in late 2003, the Buyers Group is now comprised of more than 50 organizations engaged in major HR BPO relationships with virtually every major outsourcing supplier.
Member companies cross multiple industries and multiple providers. The top 40 contracts of member organizations represent $13 to $15 billion in contract value, with 10 or more processes outsourced to a single provider. As the BPO market continues to grow, we expect participation in The Buyers Group to grow as well.
In late 2003, consulting firm Towers Perrin sought to gain a foothold in the BPO advisory marketplace. Like many other organizations, it developed a survey to better understand the key characteristics of large-scale outsourcing arrangements and what drives satisfaction. Towers Perrin surveyed virtually every company with a major BPO deal and brought them together in the spring of 2004 to share their findings.
Those who participated in that initial meeting realized we shared common issues and challenges. While it was somewhat comforting to realize we were not alone, we also quickly understood we had a unique opportunity to use our collective voice to influence a market that was continuing to develop and evolve.
Certain criteria must be met for membership in The Buyers Group. While relatively basic in principle, four criteria make up the price of admission:
• Member companies must have at least 10,000
• Six or more HR processes must be outsourced to the same vendor;
• A signed contract must be in place;
• Members must be willing to share information and ideas through participation in an annual HR BPO effectiveness survey and be a reference resource to organizations considering business process outsourcing.
During 2005, the organization formalized its vision and mission to become the premier, independent organization representing buyers of HR BPO services. Key to this mission is the term “independent.” While many industry organizations today consist of a combination of buyers, providers, and/or analysts, The Buyers Group is comprised only of buyers, and we do not accept sponsorships from suppliers. We believe our mission can be achieved through two principle avenues:
• HR BPO Community Development through an effective partnership between buyers and vendors in order to better meet the needs of the buyer community; and
• Information Sharing to Enhance Results through strong networking and development. We will share information among member organizations to enhance each other’s outcomes and results and build the skills of senior BPO practitioners.
While networking is valuable for any professional group, it’s extremely important to understand that we do not share confidential information considered proprietary by our respective suppliers such as pricing or performance metrics. We will discuss the type of metrics we have in place but not specific performance measurements or the value of incentives or penalties associated with levels of performance.
INFLUENCING MARKET DEVELOPMENT
The Buyers Group is committed to influencing the HRO community’s development and improving the overall quality of HRO services. By helping vendors understand buyers’ needs and common expectations across the full HRO life cycle and by sharing information and insights with vendors that we have gained from our respective partnerships, we really believe there’s an opportunity—in partnership with providers—to shape this marketplace for years to come.
Our message is clear: we do not seek confrontation but rather work to make the HRO market better.
In future editions of HRO Today, we will begin to share our perspective on the evolving market. We’ll get specific about what we learn from our research and discussions, and we’ll begin to talk about how we are working in partnership with providers to improve the HRO market. We look forward to sharing this information with the readers of HRO Today and thank the editors for providing the opportunity to be the voice of the buyer.