PIL gets tough over outsourcing partnership with Capita

Energy
servicing firm PIL,took a hard-nosed attitude to finding an outsourcing. Jane
Lewis reports.

PIL
started life as an R&D arm of British Gas. Now owned by Mercury Asset Management
(which is in turn owned by the giant US bank Merrill Lynch), it is probably
best known for its pioneering "Intelligent Pig" – a device that
detects leaks in oil and gas pipes. PIL’s worldwide head count recently leapt
to 1,000 following a merger with its main rival, the German company Pipetronix.

Last
month the company signed over the administrative running of much of its HR
function and payroll to Capita. For HR manager Christina Ponting the move
marked the end of a long process. "I came in two years ago. We decided
then as a business that we needed to be a strategic HR function rather than a
personnel and welfare department. And our head count was tight. I would have
loved to have brought in other members of staff, but we just couldn’t do it."
Add to that problems with the company’s existing HR systems – "I have a
general manager in South America who can’t access our database" – and the
argument for finding the right outsourcer was easily made.

Ponting’s
first inclination was to look at companies which had already demonstrated their
partnering credentials by forging existing relationships with PIL. Having
previously managed the company’s training administration (if not its actual
delivery), Capita fell into that bracket. "We had also read about its deal
with Westminster City Council in Personnel Today," she says. The provider
fought off two other bids from local suppliers to win the deal. "We went
with Capita because of the confidence we had in its systems," Ponting
says. "We’ll have an eHR database for employees to book their details of
annual leave and so on themselves. No doubt we’ll be looking at additional
things later on."

She
was unashamedly tough about the negotiation process. "We were very
difficult as a client – Capita later said it was the hardest contract it had
ever signed – but we’re used to signing contracts with companies like Mobil,
Shell and BP and that has made us very tight about how we do them. I’ve made
two staff redundant for this, so it has got to deliver results." Input
from PIL’s experienced group procurement manager was also useful.

But
although the terms of the deal are tight, with response times and penalty
clauses built into the SLA, she insists the spirit of the arrangement extends
much further. "It’s much more of a partnership than a client/server
relationship. We do see the Capita staff as an extension of our business, so
rapport is very important and how they understand our business is also very
important. It had to be the right relationship."

But
now that the contract is signed, we’ve got all the hard work to come," she
reflects.

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