Outsourcing HR applications growing up

NETWORK WORLD NEWSLETTER: NETWORKING TECHNOLOGY UPDATE
06/15/05

Dear networking.world@gmail.com,

In this issue:

* HR outsourcing takes on new life
* Links related to Networking Technology Update
* Featured reader resource
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Today's focus:

Outsourcing HR applications growing up

By Ann Bednarz

There's more to human resources application outsourcing than
finding a service provider to manage a discrete chore such as
payroll.

These days companies are handing over broad sets of HR functions
- from payroll and benefits processing to recruitment and
employee management - to service providers that promise to trim
costs, streamline processes and deliver integrated performance
metrics in return. IT staff have a key role to play in ironing
out network, security and application details, experts say.

"Outsourcing of HR functions on a point basis - meaning a single
process area, such as payroll or parts of benefits - has been
around for a long time," says Steve Unterberger, HR outsourcing
technology leader at services firm Hewitt Associates. "What is
relatively recent in the last six years is the grouping of lots
of HR transactional and administrative processes into a business
process outsourcing arrangement." Over the last two years, the
transition from an early adopter market to more mainstream
adoption has begun, he says.

In its most recent quarterly index of outsourcing deals,
sourcing advisory firm TPI reported human resources outsourcing
is the fastest growing and largest segment of the broader
business process outsourcing market. Total contract value more
than doubled from $545 million in the first quarter of 2004 to
$1.7 billion in the first quarter of this year, TPI says.

Big deals

Over the last few months, a number of brand-name companies have
signed big HR outsourcing deals.

* PepsiCo chose Hewitt Associates for a 10-year deal focused on
  HR business process outsourcing services such as workforce and
  benefits administration, payroll and contact center support. The
  deal, announced in April, also includes HR application
  development and hosting services for 64,000 of the food and
  beverage giant's U.S. employees and 38,000 international
  employees.

The bundling of multiple HR-related functions into a single
contract is what distinguishes these deals from traditional HR
outsourcing deals. Clients expect service providers to not only
fulfill current HR responsibilities but also streamline and
better integrate key business processes.

For more on why companies are outsourcing more and more HR
functions these days, please see:
<http://www.networkworld.com/nltechupdate2614>

RELATED EDITORIAL LINKS

'Take it all' outsourcing on the wane
05/30/05
http://www.networkworld.com/news/2005/053005outsourcing.html

Outsourcing looks good
06/06/05
http://www.networkworld.com/nltechupdate2615

Business process outsourcing enjoys growth
05/05/04
http://www.networkworld.com/newsletters/asp/2004/0503out1.html
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To contact:

Ann Bednarz is a senior editor covering enterprise applications
at Network World. She can be reached at mailto:abednarz@nww.com
_______________________________________________________________
This newsletter is sponsored by Oracle
SAN and SMP, Pooling or Provisioning - what does it all mean?

Find out with the Oracle Grid Computing Glossary! Like any
technology, grid computing is made up of a specialized set of
terms and acronyms. This comprehensive glossary provides a
definition of important grid-related terms.
http://www.fattail.com/redir/redirect.asp?CID=106748
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