Preview Deck | Multi-process Human Resources Outsourcing (MPHRO) Annual Report 2012

Copyright © 2012, Everest Global, Inc. EGR-2012-3-PD-0698

Human Resources Outsourcing (HRO) Annual Report – June 2012 – Preview Deck

Topic: Multi-process Human Resources Outsourcing (MPHRO) – Continued Reinvention


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Table of contents (page 1 of 3)

Section I: Introduction and Overview 7 Everest Group overview 8 HRO definition 10

Section II: Key Insights 13 Market overview and key dynamics 14 Buyer adoption and solution trends 15 Service provider landscape 16

Section III: Market overview and key dynamics 17 Summary 18 MPHRO deal activity 19 HRO and MPHRO market size 20 Factors affecting MPHRO deal size 22

– New deals 22 Process scope 23 Geographic scope 24 Employee scope 25 Buyer geography 26 Delivery model 27 HRO model 28

– Renewals and transfers 30 – Terminations 31

Deal renewal activity 32

Topic Page no.


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Section IV: Buyer adoption and solution trends 33 Summary 34 Analysis dimensions 35

– Industry 36 – Buyer size 37 – Process scope 38 – Term length 39 – Technology 40 – Mobility and self service 41 – Global sourcing 46 – HRO management 49

Section V: Service provider landscape 50 Summary 51 MPHRO service provider landscape 52 Service provider share analysis 53 Service provider market share by geography 55 Acquisition-and partnership-related developments 56 Key drivers for acquisitions 57

Section VI: Outlook for 2012 59 Market overview and growth 60 Buyer adoption and solution trends 60 Service provider landscape 61

Topic Page no.


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Appendix 62 Glossary of terms 63 HRO research calendar 66 References 70

Topic Page no.


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Everest Group’s HRO research is based on multiple sources of proprietary information

Ongoing buyer surveys and interactions – Vertical Industry Strategies in Shared Services & Outsourcing (VISSSO): Q1 2012 Global survey conducted in collaboration with Shared Services Outsourcing Network (SSON) Analyzed horizontal functions, such as HR, as well as industry-specific functions across 25+ industries Over 85 enterprise responses for human resources For more details on survey and methodology, refer to the VISSSO summary report

The analyses in this report are presented at two levels Overall market analysis that highlights the overall market composition/dynamics The current market trends based on deal activities up to November 2011 The sample size varies for different analyses based on the deal detail availability

Everest Group’s proprietary database of over 400 MPHRO deals (updated annually) The database tracks the following elements of each MPHRO deal

– Buyer details: Including industry, location, and signing region – Deal details: Including TCV, ACV, term, start date, buyer employees served, and primary pricing

structure – Scope: Process coverage and geographic coverage (employees covered by each region) – Technology ownership and maintenance – Global sourcing

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Everest Group’s proprietary database of operational capability of over 20 MPHRO service providers (updated annually)

The database tracks the following capability elements for each service provider – Major MPHRO clients and recent wins – Overall MPHRO revenues, total clients, and buyer employees served – Recent HRO-related developments (investments and partnerships) – HRO delivery locations and level of offshoring – Technology offerings within HRO – HRO service suite

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Service providers covered in detail in the analyses

Confidentiality: Everest Group takes its confidentiality pledge very seriously. Any contract-specific information collected is only presented back to the industry in an aggregated fashion

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http://research.everestgrp.com/Product/11672


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Overview and abbreviated summary of key messages

Buyer adoption and solution trends

Transaction-intensive processes are core but talent management components are increasingly considered

Buyers desire to revisit their HRO strategy without a lengthy commitment The appeal of multi-tenant Business-Process-as-a-Service (BPaaS) will increase

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Service provider landscape

A handful of large players dominate the MPHRO market The M&A and partnership environment continues to play out in the market

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This report examines the changing dynamics of the global MPHRO market and the service provider landscape. It gives an overview of the market size, buyer adoption and solution trends, and the service provider landscape, highlighting the key developments in 2011 and changing service provider dynamics. It also predicts the Everest Group outlook for the MPHRO market in 2012.

Some of the findings in this report, among others, are:

Market overview and key dynamics

1 While the overall HRO market is growing at a healthy rate, the MPHRO grew by a

modest 2% to reach an annualized spend of US$3.12 billion in 2011 The factors impacting growth were analyzed through key dynamics in new deal

signings, renewal activity, and terminations


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This study offers three distinct chapters providing a deep dive into key aspects of the MPHRO market; below are four charts to illustrate the depth of the report

Source: Everest Group (2012)

MPHRO ACV 2010-11

Buyer adoption by size Service provider market share distribution

Factors affecting the size of new deals

0

10

20

30

40

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Cumulative

through 2010 2011

Mid-market

Large market

100% = employees segment

employees segment

Growth of MPHRO deals within the different buyer segments Number of deals

Share of HRO deal signings by buyer size Number of deals

2010 ACV New deals Renewal/ transfers

Terminations / non-renewals

2011 ACV

x%

x% x%

x%

A B

C

D E

F Factors increasing

deal size Factors decreasing deal size

9% 19%

10%

12% 7%

12% 6%

10% 34% 8%

100% =

Service provider I

Service provider B Service provider A

Service provider D

Service provider E

Service provider C

Service provider G Service provider H Service provider F

Active deals Active ACV


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HRO research agenda (page 1 of 4)

Topic Goals of the research

November-2011 In this research study, we analyze the fast-changing global BAO service provider landscape and its impact on the BAO market. We focus on service provider positioning and market shares, delivery capability assessment, and modes of differentiation

Benefits Administration Outsourcing (BAO) – Service Provider Landscape and Capability Assessment

December-2011 Everest Group's analysts have released their complimentary 2102 predictions for key outsourcing and offshoring markets

2012 Market Predictions

January-2012 The report provides accurate, comprehensive, fact-based snapshots of 10+ leading BAO service providers. Each profile highlights service provider’s delivery capability, market strategy, key organizational developments, and delivery footprint

Benefits Administration Outsourcing (BAO) Service Provider Profile Compendium

Current Upcoming Published

Release date

October-2011 This breaking viewpoint document analyses the recent acquisition announcement by ADP of The RightThing

ADP's Acquisition of The RightThing: Did ADP Do the Right Thing?





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Topic Goals of the research Release date

Q2-2012 In this research study, we analyze the global 2011-12 HRO service provider landscape and its impact on the HRO market. We focus on service provider positioning and market shares, delivery capability assessment, and modes of differentiation

Global HRO Service Provider Landscape


June-2012 Provides a comprehensive coverage of the 2011-12 multi-process HRO market including market size and buyer adoption, emerging solutions and best practices, changing transaction characteristics and evolving service provider landscape

HRO Annual Report: The MPHRO Market – Continued Reinvention

April-2012 This research aims to compare Total Cost of Ownership (TCO) of Business-Process-as-a-Service (BPaaS) solutions with traditional BPO using a comprehensive financial model and create a comprehensive framework to evaluate BPaaS sourcing

Is BPaaS the Model for You?

February-2012 As Business Process Outsourcing (BPO) matures, companies and service providers must look for the next source of value – labor arbitrage is important, but not sufficient. In particular, the industry is seeking to create value propositions that achieve cost savings while also delivering other sources of value. The results show a vivid difference in the approach and mindset of best-in-class

Achieving Best-in-Class BPO – Secrets Unveiled


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Q2-2012 Profiles 15+ established HRO service providers across various dimensions including FTEs strength, key delivery locations, HRO service suite, market positioning, overall HRO delivery capability assessment, and Everest Group perspective on service provider

Q3-2012 With several organizations still trying to solve the conundrum of multi-country payroll centralization and standardization, the study provides a comprehensive coverage of the 2011-12 multi-country payroll market including market size and buyer adoption, emerging solutions, changing transaction characteristics and evolving service provider landscape

Multi-country Payroll: Driving Standardization and Best Practices Globally

Q3-2012 The report provides accurate, comprehensive, fact-based snapshots of leading service providers in the multi-country payroll outsourcing marketplace. The report also offers insights into the multi-country payroll outsourcing service provider landscape, types of technology offerings and country coverage capability of multi-country payroll service providers

Multi-country Payroll Service Provider Compendium

Q3-2012 Provide a comprehensive coverage of the 2012 BAO market including market size and buyer adoption, emerging solutions, changing transaction characteristics and evolving service provider landscape

Benefits Administration Outsourcing (BAO) Annual Report

HRO Service Provider Profile Compendium


Release date


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Q4-2012 The report provides accurate, comprehensive, fact-based snapshots of 10+ leading BAO service providers. Each profile highlights service provider’s delivery capability, market strategy, key organizational developments, and delivery footprint

Benefits Administration Outsourcing (BAO) Service Provider Profile Compendium

Q4-2012 In this research study, we analyze the fast-changing global BAO service provider landscape and its impact on the BAO market. We focus on service provider positioning and market shares, delivery capability assessment, and modes of differentiation

Benefits Administration Outsourcing (BAO) Service Provider Landscape


Release date


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Additional HRO research recommendations

The following documents are recommended for additional insight into the topic covered in this report. The recommended documents either provide additional details on the topic or complementary content that may be of interest 1. Is BPaaS the Model for You? (ERI-2012-10-R-0667); 2012. This research aims to compare Total Cost of Ownership (TCO) of Business-Process-as-

a-Service (BPaaS) solutions with traditional BPO using a comprehensive financial model and create a comprehensive framework to evaluate BPaaS sourcing

2. Benefits Administration Outsourcing (BAO) Service Provider Landscape and Capability Assessment (EGR-2011-3-R-0620); 2011. This research gives an overview of the BAO market and the service providers, analyzes the key upcoming trends – their reasons and implications, evaluates market shares and provides an assessment of delivery capabilities of 10+ BAO service providers. Based on Everest Group’s comprehensive evaluation framework, PEAK Matrix, the 11 service providers evaluated are segmented into the categories of Leaders, Major Contenders, and Emerging Players

3. Benefits Administration Outsourcing (BAO) Annual Report 2011 – Mature yet Dynamic (EGR-2011-3-R-0598); 2011. This research provides a comprehensive coverage of the BAO market and analyzes it across various dimensions such as market overview and key business drivers, buyer adoption trends, transaction characteristics, and service provider landscape. It also identifies key implications of the research findings for buyers as well as for service providers

4. ADP acquires The RightThing – Breaking Viewpoint (EGR-2011-3-V-0605); 2011. This document provides Everest Group’s viewpoint on the recent acquisition of The RightThing by ADP

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About Everest Group

Everest Group is an advisor to business leaders on the next generation of global services with a worldwide reputation for helping Global 1000 firms dramatically improve their performance by optimizing their back-and middle-office business services. With a fact-based approach driving outcomes, Everest Group counsels organizations with complex challenges related to the use and delivery of global services in their pursuits to balance short-term needs with long-term goals. Through its practical consulting, original research, and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies, and management approaches. Established in 1991, Everest Group serves users of global services, providers of services, country organizations, and private equity firms in six continents across all industry categories. For more information, please visit www.everestgrp.com and research.everestgrp.com.

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Preview Deck | Multi-process Human Resources Outsourcing (MPHRO) Annual Report 2012

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