Profit Magazine - May 2008

The organization now uses Oracle E-Business Suite HR and payroll applications, relying on Hewitt’s expertise to help run the processes and Oracle On Demand to host and manage the programs. Rasched’s group and the Hewitt team manage the activities between the U.K. hotels, Hewitt, and

Five Keys for BPO Success

Karim Rasched, business change manager for Marriott Hotels, Ltd., learned a number of important lessons during the process of moving the company’s HR and payroll systems to a business process outsourcing (BPO) solution that utilizes Oracle On Demand and Hewitt Associates. 1Clean up internal business processes before moving to an outsourcer. “If you can simplify your processes, it becomes easier to negotiate the deliverables with a particular partner organization,” Rasched explains. “Recognize that it is not as simple as just taking a particular process, passing it over to a provider, and hoping that you don’t have to think about it anymore.” 2Expect ongoing change. “We recognized very early on in the process that we needed a partnership relationship with Hewitt, rather than a straightforward supplier-buyer relationship,” Rasched recalls. “These kinds of processes are in a state of flux because our organizations change all the time. We must be able to support each other when new business challenges arise. It’s an ongoing relationship.” 3Seek outside help. Employ a third-party consultant to help define desired business outcomes and the metrics that will measure them. “Be clear about your business requirements and what you expect your outsourcing provider to provide,” Rasched says. 4Avoid customization. “Very early on, we decided to keep the applications as ‘vanilla’ as possible and design our processes around the way that the applications were conceived,” Rasched says. “That has made a significant difference to our ability to upgrade without a lot of testing effort and creates very few technical issues compared to if we had launched an intricately customized implementation.” 5Implement an effective governance structure from the outset. Marriott reviews service and performance results with Hewitt twice a month. This also gives the companies a chance to discuss any new developments or challenges that arise. Marriott, Hewitt, and Oracle also conduct more-formal monthly reviews, based on a regular report that Hewitt prepares to analyze the previous month’s key performance indicators and any technical issues. “We have also retained our steering group meetings with senior managers representing all of the partners involved in the original design and implementation of the solution, where we talk about long-range planning for future developments and activities and also resolve issues that may since have arisen from the original project,” Rasched says.

the Oracle On Demand team. “We will control the treasury side of the payroll, for example; we will maintain the bank accounts and deal with out-of-process requests and emergencies,” Rasched says.

CONCRETE BENEFITS

In addition to helping to meet its restructuring deadline, what does BPO mean to Marriott Hotels? At the top of the list, according to Rasched, are transparency of cost for key business processes and a flexible model that can quickly adapt to the needs of Marriott’s rapidly growing business. He adds that individual hotels have the opportunity of reducing their expenses as they move from their standalone payroll applications to the BPO model.

However, cost and process efficiencies are only a piece of the value that the hotels now see, says Rasched. “We are not just giving them a payroll solution. We also give them a whole end-to-end process for regulatory filings, standardization of processes, better cash control, and a maximization of cash as a result of being able to do it all in one place,” he explains. “That’s entirely facilitated by Oracle E-Business Suite applications, and because we have merged the HR and payroll databases into one data store.”

Partnering with Oracle gives Marriott Hotels and Hewitt access to industry-leading applications and IT services, as well as implementation expertise gained from the company’s extensive experience with global corporations. “Oracle’s involvement has been invaluable, and it was one of the major reasons for choosing this partnership,” Hewitt’s Randall says. “We felt that Oracle’s BPO partnerships and Oracle On Demand services provided the other two legs of the partnership.”

“If providers want to have full control over the cost of the operation and run the whole operation independently, obviously that’s a feasible choice,” says Tibor Beles, vice president for business process outsourcing at Oracle. “But if they prefer to rely on Oracle’s IT management expertise and applications management expertise, that is certainly available.”

In addition to quickly coming online to serve Marriott Hotels’ needs, the applications fit into the company’s long-term plans. “Although there are a myriad of payroll platforms that we could have chosen and operated here in the U.K., we were also looking for a model that other Marriott operations could use to expand across Europe, the Middle East, and Africa,” Randall says. “Two of the reasons for choosing it were the scalability it can provide and the ability to eventually do multicurrency and multicountry payrolls.” <>