How do you get the most from your next outsourcing arrangement? One sure way is to borrow best practices from the masters, companies that have been outsourcing successfully for years. A new global survey of companies with deep experience in outsourcing constitutes a “how-to” guide for high performance outsourcing. These outsourcers are sophisticated in their [...]
On June 16 two human resources (HR) outsourcing giants announced they are merging. Hewitt Associates, the industry leader in benefits administration, is purchasing Exult Inc., the industry leader in HR outsourcing (HRO). The merger provides great synergies because benefits administration is a key component of HRO.
No other firms have exactly the same residential services model as ServiceMaster, but the company competes with a myriad of local-market, mom-and-pop operations. It’s a highly competitive market that allows almost no tolerance for cost increases – including the 15% yearly rise in the company’s healthcare benefits costs. So ServiceMaster decided in 2003 to change tactics for its employees’ health and welfare benefits administration.
Effective communication is crucial to success in outsourcing, but it seldom happens automatically between two different corporate cultures. This is the story of how Sears and Hewitt Associates established change management techniques to ensure proactive communication, as well as an innovative program for continual process improvement.
A few years ago, the typical 7-Eleven® store had a myriad of electronic devices that were not connected. For example, cash registers were not linked to the fuel pumps, which forced clerks to manually enter fuel sales into the registers, slowing the process and missing impulse sales. The situation prevented 7-Eleven from maximizing its profitability. Nor could the store managers effectively manage inventory; there was no way to know with certainty which items were moving well and which ones were simply taking up space. Shelf space in a small store is at such a premium that allowing five or 10 items to sit unsold for a week affects the bottom line.
When Geographic Data Technology wanted to enter a new market, it turned to outsourcing to obtain the necessary resources. Its highly collaborative relationship with RMSI changed the buyer’s business processes so it could compete in the new market. The result: outcomes far greater than they imagined.
We decided to move as many resources to education as possible. We really wanted to make a change from a 38-year-old system, states Pam Brown, Director of Facilities & Asset Management for the Portland Public School District (PPSD). The district’s facilities management processes –with its schools’ custodial services being contracted out to a local union — had been in place for 38 years when the decision to outsource was made in 2002.
Although trust grows over time and successful outsourcing alliances evolve to become even more beneficial for both parties, the true foundation for success lies in the hands of buyers when they begin seeking a services provider. That spot in time when a buyer determines its objectives (the outcomes it wants to pay a provider to produce) and then matches its provider selection criteria to those aims is crucial to outsourcing success. Microsoft definitely demonstrated how to do it when it selected VMC Consulting for testing and other IT support services for the Xbox® video game system from Microsoft.
During the eight-year relationship of Sovereign Bank and its outsourcing service provider, Trammell Crow Company (TCC), the bank grew dramatically from mergers and acquisitions. For TCC, which handles all the bank’s real estate services throughout its financial services market (the northeast and mid-Atlantic states in the US), the growth from 130 properties to more than 600 properties required a high level of flexibility and expertise.
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