Tata Consultancy Services: Greater Choice for HRO

Corporate attitudes towards outsourcing have matured quickly, allowing service providers to bring more processes under their wings. Caroline Brown of Tata Consultancy Services tells CEO how vendors can build their market share.

The motives driving outsourcing are changing as more companies progress through shared services and offshoring in search of cost reduction and greater business transformation. This is evident in the rapidly growing market of human resource outsourcing (HRO), where innovative vendors sense a great opportunity.

Positioning themselves to provide global solutions that support clients in organisational change, these service providers are ready to take on the big, transformational deals.

‘As an Indian company we have seen a real drive to seek quality improvement for HR processes,’ says Caroline Brown, Global HRO practice leader for Indian service provider Tata Consultancy Services (TCS). ‘Global clients want globalised businesses. They are not looking to outsource processes in a single country, the real push is to use outsourcing to achieve a global view of their workforce.’

TCS is one of India’s leading business process outsourcing (BPO) providers. Its global network delivery model and its single platform approach have seen it emerge as a major player in IT outsourcing (ITO) and HRO. Its clients, observes Brown, increasingly see outsourcing in general - and HRO in particular - as strategic tools. 'Both buyers and vendors have come a long way in the last few years. The experience of early adopters has not deterred others, though some deals seem to have delivered less value than anticipated,' Brown says.

'Service providers now have a much better understanding of how they can help clients transform their businesses, and clients know some of the pitfalls to guard against.'

Brown notes that, until a year ago, there was still nervousness in the market. 'Companies saw early deals taking a long time to deliver value, but the lessons have been learnt,’ Brown notes.

Puzzles solved with partnerships

The success of an outsourcing deal often depends on how it is structured in the initial phases. Taking time to identify clear goals and define controls is increasingly the order of the day, as is a more closely involved relationship between vendor and client. For Brown, partnerships enable a planned and phased approach to implementation, and must be established in a spirit of trust and consensus.

‘Outsourcing is not something that is done to you. Clients want to work collaboratively with us on transformational outsourcing. They are not doing end-to-end outsourcing all in one go, but getting the basic platform established first – usually workforce administration and payroll – to give them the basis for global analysis,’ notes Brown. Far from being an external project to improve HR functions, HRO can go to the very core of an organisation that is looking to achieve globalisation by achieving standardisation in every country in which it operates, and across relatively autonomous business units. HRO is part of a broader solution, in which service providers such as TCS include IT services.

Offering the whole package

Bundling ITO and HRO together gives service providers an opportunity to differentiate themselves in a young and rapidly growing market. The platform based approach includes application services and IT hosting, which Brown believes illustrate what will be the defining trend in the years ahead. Service providers will have to offer the whole package, and Indian companies have taken the inside track. TCS is among those blazing a trail into the big deals. ‘We’re amazed at the pipeline of deals. We have just won a global payroll deal for 65 countries that will be done over two years and major contracts in the US and elsewhere.

Buyers recognise that the Indian workforce brings a lot of knowledge and is highly qualified. Indian companies have always been seen as good business process outsourcing providers, but they are now shifting towards transformational outsourcing.’ says Brown.

‘We can do what Accenture and IBM have been doing for years,’ she believes. Increasingly, clients agree.

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