UNLOCKING OUTSOURCING

Transcription

1 Four Keys to Preparing to Outsource Your Global Mobility Program Looking to create efficiencies in key areas of your value chain, and pushing to achieve maximum strategic financial value from your core competencies, is not a new challenge for most companies. Choosing to outsource as a method of accomplishing this strategy continues to evolve, notably in the management and administration of global mobility programs. This outsourcing overview outlines, at a high level, the best practices Cartus has developed, working in partnership with leading organizations, for preparing to outsource global mobility administration.

2 1. Linking Organizational Strategic Direction to Outsourcing How do you focus on your core competencies and streamline processes? Cost management is a very familiar activity within any type and size of organization. Most managers are familiar with the ongoing strategic initiatives to improve economic value and overall performance through active and skillful management of cost. Now, virtually all organizations foster an inherent cost savings strategy weaved into the fabric of daily activity and operational management of the business. Of equal familiarity to managers is the regular focus on cost saving initiatives, targeted to hit a specific goal, in addition to ongoing cost management. Organizations are continuing to look at streamlining processes in key areas of the value chain and striving to achieve the maximum strategic financial value from their core competencies and key activities. Outsourcing is an established and proven method, when selected with the right research, in the right areas, and at the right time, for driving towards this goal. Best Practice: Look for the benefits of outsourcing global mobility not only in terms of potential cost savings, but also the impact on the success of achieving your greater strategic mobility goals, for example, effectively allocating and developing key employees.

3 2. Defining the Appropriate Scope of Outsourcing What elements of global mobility do you outsource, and to whom? The process for making an informed decision about which elements of your global mobility program to outsource, and to whom, requires detailed analysis within your organization. A thorough investigation and mapping of current processes is required to provide clarity on the resources, infrastructure, knowledge, and capabilities currently in place. This begins to identify, in detail, the degree of effectiveness and return on investment of the internal resources employed to manage your mobility program. From this analysis, decisions need to be made about what is effectively already outsourced, and what other areas might benefit from being outsourced. This assessment of alternatives to outsourcing leads ultimately to the definition of scope required by your organization from an outsourcing partner. This alone of course does not complete the picture, and prior to defining the scope and running a costly RFQ/RFP exercise, it is recommended that an element of pre-testing should take place, in some depth, with potential partners in the market to clarify if mobility outsourcing is within their existing or near future capabilities. See the Outsourcing Checklist of this document for key areas organizations must take a look at, and important questions they must ask themselves, identified through Cartus experience of supporting many organizations through this initial process. Best Practice: Comprehensive mobility knowledge and expertise is not something that can be developed in-house quickly. Also, adding or reducing internal resources to match mobility activity is costly and difficult to manage. Outsourcing global mobility can deliver both the expertise and scalability needed for a successful global mobility program.

4 Outsourcing Checklist Key Questions to Ask The following checklist includes sample questions to ask when analyzing whether or not to outsource your global mobility program. Category Global Program Consistency Exception Tracking Cost Employee Satisfaction Technology Compliance Vendor Management Internal FTE & Resources Current Mobility Team Focus Key Questions to Ask Do we have globally consistent application of policy? Can we accurately forecasts costs? Can we accurately report on exceptions to policy? What are the fixed costs of our existing infrastructure (FTE, etc.)? Do we have the ability to capture total cost of mobility program? Do we have a consistent employee satisfaction measurement tool? Do we have appropriate and capable existing technology? What is the business appetite towards capital investment in non-core systems? Are we 100% compliant in the area of immigration, globally? Are we 100% compliant, globally, in the area of taxation and social security? Do we dedicate time for procuring individual local country providers? What is the associated impact on associated business groups (Legal, Procurement, AP, etc.)? Do we have a methodical, consistent vendor performance management process? What is the scale of the fixed cost of resources currently employed? Is our focus transactional case management? Do we have resources to handle vendor, selection & management? Areas for Consideration Differences in policy application Higher levels of employee negotiation Forecast vs. actual cost variance Impact on employee satisfaction Cost management Global consistency Employee satisfaction Flexibility for highs/lows of volume Lack of accurate cost information Low value or non existent reporting Surprises! Lack of data to platform decision making High fixed to variable costs ratio Imperfect information on areas of program needing review Speed of employee productivity Failed assignments Gaps in service No portal dedicated to relocating employees Difficulty/impossibility accessing reports Cost data in multiple unconnected systems No single point of access to cost data No centralized case management system with reporting Planning for compliance to have employee with appropriate visa/permit in line with business requirements for start dates Tracking of short-term and extended business travellers ( stealth expats) Increased cost of services from tax provider (out of scope and additional) Fines and other penalties Variable vendor performance No metrics-based vendor management Flexibility for adding new locations Inconsistency of experience for employees High switching cost for supplier changes Multiple vendors to manage and pay Limited/no flex for volume high s and low s Zero volume still incurs FTE cost Focus on strategic program development, policy enhancement Consistent focus on program cost reduction

5 3. Assessing Strategic Value Factors How does the strategic value of outsourcing factor into making the decision to outsource global mobility? Reviewing the sample transactional questions outlined in the Outsourcing Checklist may assist in addressing some practical issues relating to the provision of support to employees. It also provides a foundation or baseline against which to compare outsourcing costs and resources. However, there is yet more analysis to be undertaken in the area of the strategic value of mobility outsourcing to an organization. A significant percentage of mobility management functions are trapped at the transactional level, leaving little time and resources to be focused on strategic elements. This has shown itself to be a key area of benefit for the outsourcing decision. Below is an outline of some of the additional areas that Cartus has had organizations consider when evaluating outsourcing: Category Best Practice & Benchmarking Internal Links Return on Investment Consideration Define a process for the assessment of current policy and program specifics against other companies globally. Secure robust links between the mobility infrastructure and strategic international human resources functions and drive talent management as well as other strategic initiatives. Develop tools to assess the value of a move or assignment, measuring the return on the considerable investment in an employee relocation or assignment, and provide links with the general HR approach and the ROI of any employee. Best Practice: Companies typically experience lower long-term costs resulting from innovations, shared best practices drawn from experience with industry leading corporations, and customized consulting support. In an outsourcing environment, cost savings goals can also be achieved, not by cost cutting, but through effective program design.

6 4. Meeting the Challenge of Gathering Detailed Global Data How can outsourcing our global mobility program help us capture and report on the total costs of a move or assignment? To determine the benefit of outsourcing, and which elements of the global mobility program to outsource, accurate global data gathering is an essential and typically challenging area for most organizations. For example, consider the critical but threshold level component of cost analysis. The final cost decision relies on clear identification of the cost of resources currently employed in the management of your global mobility program versus the cost of an outsourcing partner. Identifying these costs from within your own organization globally can most often not only provide surprises about how processes differ, in unexpected places and in unexpected ways, but also identify individuals not previously known to be involved in the mobility process, such as a local employee providing orientation of the local area simply because that is what they have always done. Significant gaps are often identified where visibility to areas of the business that are involved in the management of the mobility program are not globally transparent. Additionally, and rarely factored into cost exercises, there is usually some connection between other supporting groups such as accounts payable (payment of vendors, invoice audit, etc.), payroll (home and host), legal groups (contract review), procurement groups (vendor selection and management), and many others within the mobility process. Where a cost such as procurement and legal time is transparent, there can be additional challenges around apportionment. Imagine in your own organization how you would account for the cost of the legal and/or procurement group s time for vendor selection and contracting under the framework of your existing infrastructure of managing your global mobility program. Where there is an identified input to the mobility process, but no practical way to apportion cost, the setting of clear assumptions and rules assists in building the baseline, particularly in the area of cost. Best Practice: When deciding whether or not to outsource global mobility administration, take into account the capital investment that would be needed to develop and maintain the leading edge technology necessary to effectively capture and report on global mobility data.

7 Conclusion The outsourcing decision involves many complex questions being asked and answered, questions that might not be known at the time of the evaluation. Outsourcing of any function requires careful positioning within the business to educate executive leadership (who most often do not have the full detail of the cost of a global mobility program) and generate support for a process that in the vast majority of cases can provide significant value to an organization. Outsourcing value is not just realized from identifying and capturing total cost, though allowing for targeted and detailed cost savings initiatives that make a real impact are certainly a positive factor in the outsourcing decision. Other factors, including consistency, compliance, and employee satisfaction also play a key part of the decision process. Also playing a key role are the more key strategic elements, such as measuring return on investment and others, areas where gaps arise as strategic focus is often depleted from mobility functions when resources are focused at the transactional level. A carefully detailed, efficiently managed, and flawlessly executed project plan will provide a tool for managing the potential risks (quite often unsubstantiated) associated with an outsourcing project. One critical aspect of all areas noted above is reaching out beyond the boundaries of your organization to third party organizations to hone and refine the critical component of scope. Working with an experienced partner, used to guiding organizations through this data gathering exercise, can add significant value when building a business case to outsource mobility management. Above all, if your organization cannot answer any of the questions and considerations detailed on earlier pages, the case for outsourcing has already started gathering momentum. For more information, contact your Cartus sales representative or account executive, or deliveringmore@cartus.com. Mobility Management Outsourcing Consulting Intercultural & Language Training 2009 Cartus Corporation All rights reserved Cartus and the Cartus logo are pending or registered trademarks of Cartus Corporation.