The vision of moving to a shared services solution and outsourcing HR has been a priority for many HR outsourcing companies.  Key to successful outsourcing is to ensure that systems and processes become embedded in the organisation and that system integration is properly addressed and implemented.

I have recently been able to review a number of companies' outsourcing arrangements and a common theme appeared:

    * The implementation was painful and data took a long time to become stable
    * ERPs are clunky and not used to the software’s full extent usually carrying a minimum data set as the project run out of budget and time during implementation
    * Offshoring services is not always a good experience.  The Indian call centre model attracted constant criticism because of the bad communications, poor language skills, service centre staff sticking to scripts, HR personnel still having to deal with transactional HR (which is then scanned and sent offshore where it is re-keyed into the ERP system) and data entry errors. This list is not exhaustive
    * Integration with other systems such as payroll, finance and any other HR related system is usually poorly implemented and difficult to maintain thus causing errors in payroll
    * Lack of internationalisation of the data set
    * Lack of innovation

This sample of companies were multijurisdictional and even when the customer vendor relationship was good the complaints were still there.

So how can these problems be overcome?  The outsourcing process and design is one of the most important factors  and trying not to turn an outsourcing project into an ERP roll out.  Integration is key and ensuring that the right data sets are held in the right database: this not only makes maintaining interfaces easier, but also ensures that any given application that does not have the appropriate database fields is customised to fit the wrong data set.  This just costs time and money. There is a good saying when designing integrated systems: do not be emotional about the technology you have ownership of; if the data does not fit do not force it.

Before offshoring processes do consider a regional shared service centre that is culturally tuned to the workforce it is serving.  Productivity can be better, languages definitely better and it may well overcome communication issues.
Try to innovate: there is a lot of very good technology in the market that can enhance a traditional ERP system including mobiles and smart phones, employee portals, business process management software and easy-to-implement security.

Finally do make sure that processes are embedded in the organisation and that there is regular feedback from the employee base so that there is a drive to constantly improve service.  If there are changes of personnel either on the customer's or outsource provider's side do make sure that processes are not reinvented the wrong way.  This commonly occurs.  A good sign of outsourcing delivery that is working is a lack of spreadsheets.  Usually if the dataflow and or process is broken then spreadsheets pop up like mushrooms...

HR outsourcing is good for businesses for many reasons but we all have to try hard to make it work.

Source:Outsource