(as stated above) and accurate information to
manage their businesses. They need a good
HCM system, they need to automate processes
to drive efficiency and, most importantly,
be able to pay their people accurately and
comply with local country legislation. They
cannot afford traditional outsourcing. A
bureau service in every country simply does
not work because there is decentralised
information. They cannot afford a traditional
ERP; regional systems are a balance but do not
really work and most are not truly regional
because they are a data mash or aggregation
of local services which are expensive.
Large multinational conglomerates face a
similar problem too. They will most likely
have grown by acquisition, meaning different
product lines and each division having the
equivalent to a SME’s number of employees per
entity. Conglomerates are commonly using an
ERP system to manage out of date HR master
data that requires either an upgrade or a
new installation and is feeding payroll with
multiple files that are in the wrong format.
Also, there is often no localised data and it is
frequently out of date. This type of situation
can easily start to become unstable and if
you do not pay your people correctly, your
organisation can be severely disrupted.
Then, finally, let’s look at the retail industry
which, by default, will have a mini business
per retail outlet. No matter how good the
management KPIs and accounting controls are,
these are only as good as the information they
can be measured by. This type of organisation
is often using its own communications network
for global ERP access which can suffer hugely
from latency. It is very expensive to build a
global infrastructure and pay for your own
MPLS. Payroll solutions tend to be regionally
or country based and very fragmented with
low use of ERPs and lots of spread sheets.
There are many other sectors
that suffer the same way.
O
ffshoring was once seen to be the panacea
for outsourcing with there being a high
skill base and a way of lowering costs.
Again there are many case studies of difficult
implementations, issues with telecommunications,
bandwidth infrastructure, staff labour turnover
and often staff just doing the wrong things.
The call centre approach is definitely no longer
vogue in the western world. During the growth
period of offshoring, information security
seemed to be forgotten: there have been
horror stories of data being sold illegally which
have certainly brought this to the forefront of
every organisation’s compliance programme.
The final mix is the aggregator model which
consolidates the data from the above solutions,
often badly. Our last magazine explained the
broken nature of the aggregator model which
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