The odd couple produces model for HR outsourcing

BP
Amoco’s decision to outsource a major part of its global HR operations to
Exult, 16 months ago has been watched with interest by the industry. So how has
this symbiotic relationship of two companies with very different cultures
worked out? Jane Lewis reports

BP
has spent the past decade forging a reputation as an aggressive outsourcer of
non-core activities. But when it entered a £370m global agreement in December
1999 to outsource all its global transactional HR processes to a little-known
start-up financed by venture capitalists, the world sat up and took note.

As
BP’s Ian Fyfe – UK leader of the joint Atlas Programme set up by the two
companies to drive the project forward – notes, the two certainly had very
little in common on paper. "We are very different companies
culturally," he says. But having conceded that, he is nonetheless
irritated by media speculation that BP employees are less than happy with their
new partner and the programme’s new centre of operations in Glasgow. "Call
centres get a bad name for sticking people on the end of phones, but [the Exult
operation] is very professional, staffed by very customer-savvy people,"
he says. "When people visit the Glasgow operation, they are universally
impressed with the Exult people."

Although
the two organisations clearly hail from two very different ends of the
commercial spectrum, the deal was nonetheless "a meeting of two
minds" claims Exult’s UK director of client delivery Howard Nelson.
"It came from the recognition at BP that if HR was to provide a higher
level of business support, it needed to do something about transaction costs.
At the same time Exult had identified a significant market opportunity in that
area, [involving] rigorous process design". Exult insists that it is a
technology "enabler" rather than a technology company per se.
"We’re not looking to be at the bleeding edge," says Nelson.  Yet its ability to offer a personalised
web-based portal – dubbed myHR.net – through which every BP employee could
access HR information and services, was obviously an important component of the
deal strategically.

"The
key thing is that the value proposition was not just a cost-based one. It was
also about an enhanced service delivery," Nelson says. "We are
opening up the processes within BP to enable a greater transparency of
data." But nearly two years into the project, it is clear that this is not
being achieved without some pain, despite extensive groundwork.

BP
and Exult have been praised for the way staff were prepared for the new
arrangement – myHR.net was co-designed and tested by HR managers from multiple
business units, and a major change management and communication programme was
launched across the company. Nonetheless, there have been pockets of
resistance. "If there is a difficulty at the moment it’s to get the way BP
does things changed," says Fyfe. "BP tends to customise, to do things
site by site, but for Exult to work properly there has to be a standard
process. It’s very painful, it’s a major change – and there are teething
problems in that area."

To
some extent much of this was predictable. "Most things we’re coming up
against don’t surprise us," he says. But belief in the
"rightness" of the deal – and of the importance of achieving a
standardised HR processes across the globe – drives him forward. "As far
as I’m concerned, people are prepared to push this because it makes things work
– it takes HR to the next level."

In
the meantime, the team’s best strategy for alleviating internal staff gripes
about process standardisation is to stress what’s in it for them. Briefly put,
you need broad rules in place so you can free yourself up to get the detail
right on a local basis. "People assume standardisation limits
choice," says Nelson. "But standardisation is the underlying process
that allow variability and personalisation. That gives managers more freedom
and choice to do what they want to do – as long as they comply with [the broad
rules]. It’s a new paradigm: standardising systems allows more
flexibility." You can see why this might be a difficult one to sell.

A
step-by-step implementation, rather than the full Big Bang treatment, has
helped. "We’ve tried to stagger it," says Fyfe. "The first bit
went over to Exult last July, and the next in September", and the roll-out
continues at a reasonable pace. But the pressure is on to get the whole thing
up and running as quickly as possible. As Fyfe concludes, when you’ve got a
chief executive like Sir John Brown "who achieved the merger with Amoco in
60 days" it’s probably best not to mess around.

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