Copyright © 2007 Alsbridge plc. All rights reserved. Global Sourcing Masterclass: Transforming the HR Function HRO Insights and Key Success Factors from an Advisor perspective William Benn, Director, HR Payroll and Change Practice 6 December 2007

HR context: evolving and mature Centres of expertise (e.g. reward, employee relations, performance management and competence development, compliance) HR business partners and some specialist work Shared Services and Outsourcing Self service technologies HR Effectiveness HR Efficiency CentralLocal

Global sourcing drivers 1. Cost savings Labour arbitrage - Offshoring provides access to global labour markets, offering cost savings of 30% to 50% versus ‘onshore’ sites Centralisation & specialisation – Offshoring enables companies to concentrate activities in one location, generating economies of scale and specialisation 2. Quality and capacity gains Access to large and capable workforces, expertise and infrastructure High numbers resources with graduate / technical qualification A focus on acccreditation e.g. Six Sigma, CMM level 5 3. Access to new markets Many multinationals are seeking to complement their plans for expanding into new markets, by simultaneously setting up nearshore and/or offshoring centres

Indicative HRO timeline Service Delivery Transition Solution design (blueprint) Contract Negotiations Selection phase Sourcing Strategy & Feasibility Study Continuous Engagement; Communication and Relationship Building Ongoing 2 – 24 months + 2 – 3 months 3 – 6 months 4 – 6 months 2 – 3 months

HRO key success factors  Getting the right HRO Scope to drive a powerful, but realistic Business Case.  Allow HRO suppliers to propose their best solution.  Recognise that HRO can be a “partnership”, so define and agree with the supplier what is meant by partnership.  Plan and implement the right retained HR Organisation to operate in the new world of outsourced delivery and governance.  Top class Transition and Change Management to avoid adverse employee disruption and enable realisation of the business case.

Are you being served?

What we hear about why we’re there…  Assurance on an achievable HRO project scope.  The creation of a powerful and realistic business case for HRO.  Managing risk on the HRO journey.  Selection of the right HRO supplier(s), who will deliver the right solution.  Healthy and liberated retained HR organisation.  Effective governance of the on-going outsourced HR service.  Sustainable business benefits across lifetime of HRO relationship.