BT, HR outsourcing, Accenture, 7days

Helping BT’s HR outsourcing run smoothly

16 Nov 2003 | (Case Study)

How BT, Accenture and 7days succeeded in handling a £425 million outsourcing contract and in creating a great partnership to overcome the initial issues.

Background
BT, the UK-based telecoms giant, was one of the first companies in Europe to strike a major HR outsourcing deal. Since 2000, all its transactional HR services – covering everything from recruitment through to pensions – have been handled by Accenture HR Services.

The £425 million contract saw over 1,000 of BT’s HR team transferred to Accenture to administer HR services. This freed BT’s remaining 600-strong HR workforce to concentrate on the strategic people issues facing an organisation employing 96,000 staff in the UK.

The issue
The first three years of the contract ran against a backdrop of significant change for both organisations. Although the HR outsourcing arrangement continued to run relatively smoothly on the surface, it was inevitable that during such a tumultuous period, some tensions would emerge.

Denis Reay, BT’s Senior Vice President of HR, was brought in to review progress and ensure the outsourcing arrangement was geared up for the future. Although the decision to outsource was now generally regarded positively within BT, there were still pockets of doubt and, sometimes, suspicion.

Some of the processes being delivered by Accenture had been overtaken by internal events and were no longer in line with BT’s strategic direction. As a result, some line managers felt the HR services they were paying for were frustrating their efforts and not delivering value for money. In other areas of the business boundaries had become a little ‘fuzzy’ and BT’s HR people were still becoming entangled in transactional work at the expense of strategic input. There was also a debate about just where Accenture’s involvement began and ended, and how far they should become involved in higher value add work.

Diagnosing the problems
Reay looked for external support to realign and put all the pieces of the jigsaw together smoothly. He chose consultancy 7days, who offered an unusual blend of process expertise and HR knowledge – and who also had a suite of simple but effective organisation effectiveness tools.

Led by Jill Foley, 7days started to help BT build a realistic picture of how the HR outsourcing programme was functioning and identify what needed to be done to get it in good shape. Recognising that one of the major issues was the lack of clarity over responsibilities, the first step was a process review, which helped BT break its HR activity down into nine key areas and articulate how its policies, processes and procedures should link together. 7days followed this up with an organisational ‘scan’, which showed BT what was really happening on the ground.

Denis Reay comments, “We got some very rapid fire views of what worked well, what people didn’t like and where the hot spots were – we ended up with an over-arching view of what was most important and which areas were most in need of change”.

The scan was then used as the basis of identifying the key areas that had the greatest potential for improvement. For BT, this meant the recruitment process, learning and development and health and safety.

Working together to design the future
As important as fixing these processes were was the approach to be taken to solve them, in light of the outsourcing relationship. Throughout this project, BT and Accenture have worked in partnership. For the three processes that were considered highest priority, joint BT and Accenture working teams have been created. They are encouraged to leave the commercial relationship at the door and to focus on creating a ‘future proofed’ fit for purpose process. This approach has ensured that the best expertise is being brought into the redesign process.

Through a series of workshops the joint teams, facilitated by 7days using their process design methodology, have been mapping out their ideal processes. Encouraged to think best practice, but not too blue sky, simple changes to the process which could have huge impact are being identified.

Some examples include:
- a significantly reduced number of transactions in both volume & cost across the resourcing process
- faster time to hire through streamlining & automating process steps
- clear visibility of total training spend
- a consistent approach to evaluating impact of training – integrated through the whole process
- improved discipline and control in procurement and vendor management (thereby enabling BT to leverage their buying power more effectively)
Overall the proposals will help ensure that the future process is slick and simple, with clear accountabilities. The processes being designed are also helping support the overall aim of the outsourcing arrangement – a reduced involvement of HR in administrative tasks and a more defined role for line managers.

Next steps
The processes and recommendations made by these process design teams are now with the BT HR leadership team and implementation plans being formed. 7days have ensured that the knowledge and skills they have brought to the process have been transferred. The joint working process adopted throughout ensures that the decisions have been developed by and are therefore owned by BT and Accenture.

Denis Reay feels that 7days’ pragmatic approach, coupled with its simple but effective tools, have helped BT make major strides in a very short space of time. “They have acted as a catalyst and have provided us with the rigorous and robust processes we need to take the HR outsourcing programme forward,” he said.

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