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Will Hutton

Will Hutton

Principal, Hertford College, Oxford University and chair of the Big Innovation Centre

Tuesday 15 Nov 2011
On and offshore service blending – mixed service delivery at blended prices

On and offshore service blending – mixed service delivery at blended prices

Hands up if you have upgraded your iPad to 5.0 to gain access to its 'iCloud' feature? No doubt Apple will bring 'cloud computing' into the common language with this positioning of the virtual storage concept, just as IBM did with 'e-business' in the not too distant past.

Even in our own world of HRO service delivery, the Outsourcing Unit at the London School of Economics is positioning the concept of 'Cloud Business Services' or 'Cloud BPO' as the virtual delivery of HR processes and supporting technologies.

Of course, there is a third dimension to HR and payroll transactional service delivery, namely the people required to drive the processes on the chosen technology platform. Here the cloud concept can also be stretched to cover outsourcing and the consideration of the relative strength and weakness of on, off and blended service delivery models.

The maturity of internet-based secure manager and employee self-service portals and scanning and electronic storage infrastructure means that outsource vendors can fulfill HR and payroll processes with a blended mix of on and offshore resources.

We use offshore resources for high volume/low complexity transaction processing; while the practicalities and logistics of other items (for example printing and posting contracts, offer packs, etc.) are obvious candidates for onshore teams.

Other key advantages of a blended on/offshore approach are to reduce lock-in to a specific country or region that may see its low cost base relative to other geographies eroded over time.

Also helpful is the increased flexibility in business continuity in the unfortunate event of a disaster recovery in a specific location.

Let's also not forget that HR processes in particular are driven by company policies and relevant regional or national employment laws. An onshore presence can be key here to facilitate change management and associated SLA and contract management.

So, on or offshore delivery of 'cloud HRO' services? Inevitably it's a balancing act of opportunity, cost and risk which any company considering outsourcing HR and payroll processes should explore thoroughly with delivery partners. As ever, the cloud and technology is the backbone, but it's the combination of that and people that make it deliver value.

Stuart Stephen, service centre director, Ceridian UK