Comments on: Large Market HR Outsourcing Takes Another Hit http://www.inflexionadvisors.com/blog/2008/10/28/large-market-hr-outsourcing-takes-another-hit/ Seeding growth through innovation. Fri, 19 Mar 2010 11:23:52 +0000 http://wordpress.org/?v=2.5 By: inbound call centers http://www.inflexionadvisors.com/blog/2008/10/28/large-market-hr-outsourcing-takes-another-hit/#comment-22202 inbound call centers Thu, 04 Feb 2010 01:44:19 +0000 http://www.inflexionadvisors.com/blog/?p=129#comment-22202 This is a very interesting and informative post. We know that there are many people who are getting interested in outsourcing and with this kind of news we are certain that maybe in the long run, companies will try to accept that outsourcing is a good strategy for their business. This is a very interesting and informative post. We know that there are many people who are getting interested in outsourcing and with this kind of news we are certain that maybe in the long run, companies will try to accept that outsourcing is a good strategy for their business.

]]> By: mark.stelzner http://www.inflexionadvisors.com/blog/2008/10/28/large-market-hr-outsourcing-takes-another-hit/#comment-7406 mark.stelzner Thu, 30 Oct 2008 13:53:22 +0000 http://www.inflexionadvisors.com/blog/?p=129#comment-7406 @Phil Fersht - There is absolutely an asset there to buy. However, CVG's CEO made an interesting comments per the analyst call that pertains to the ongoing implementations (reported by Workforce): 'Specifically, Dougherty cited “two significant global outsourcing implementations” where the company is talking to the clients about changing the implementation approach. For these two clients, the company is looking at passing on the implementation to third parties, Dougherty said in the analyst call. However, the company would remain “the ongoing operator, potentially,” he said.' @Phil Fersht - There is absolutely an asset there to buy. However, CVG’s CEO made an interesting comments per the analyst call that pertains to the ongoing implementations (reported by Workforce):

‘Specifically, Dougherty cited “two significant global outsourcing implementations” where the company is talking to the clients about changing the implementation approach.

For these two clients, the company is looking at passing on the implementation to third parties, Dougherty said in the analyst call. However, the company would remain “the ongoing operator, potentially,” he said.’

]]> By: Phil Fersht http://www.inflexionadvisors.com/blog/2008/10/28/large-market-hr-outsourcing-takes-another-hit/#comment-7397 Phil Fersht Thu, 30 Oct 2008 01:10:24 +0000 http://www.inflexionadvisors.com/blog/?p=129#comment-7397 You think anyone will want to buy Convergys' HRO business? With Deloitte taking all the transformation dollars, might be challenging... PF You think anyone will want to buy Convergys’ HRO business? With Deloitte taking all the transformation dollars, might be challenging…

PF

]]> By: mark.stelzner http://www.inflexionadvisors.com/blog/2008/10/28/large-market-hr-outsourcing-takes-another-hit/#comment-7389 mark.stelzner Wed, 29 Oct 2008 15:49:13 +0000 http://www.inflexionadvisors.com/blog/?p=129#comment-7389 @Tim H - If large market HRO is to survive, the steps you suggest will have to be adopted. Otherwise I anticipate we will see a continued increase in sub-process outsourcing (talent mgmt, RPO, benefits, payroll, etc.). Thanks for the comments! @Tim H - If large market HRO is to survive, the steps you suggest will have to be adopted. Otherwise I anticipate we will see a continued increase in sub-process outsourcing (talent mgmt, RPO, benefits, payroll, etc.). Thanks for the comments!

]]> By: Tim H http://www.inflexionadvisors.com/blog/2008/10/28/large-market-hr-outsourcing-takes-another-hit/#comment-7388 Tim H Wed, 29 Oct 2008 15:20:47 +0000 http://www.inflexionadvisors.com/blog/?p=129#comment-7388 Wow - this is a huge hit to Convergys, but is hardly surprising. Convergys' margins on these mega-deals were razor-thin, which left them open to these types of implementation risks. Those were magnified by their aggressively customized approach to each engagement, which did not allow them to capitalize on economies of scale across clients. I wonder what changes this will drive not just at CVG, but in the industry as a whole? Will this change the way that advisory firms and customers approach deals? Will they be willing to accept more standardization to ensure the viability of their vendors? Not that anyone is shedding any tears for CVG today, but if this industry is going to survive, it seems like we all might have to move in a different direction. Wow - this is a huge hit to Convergys, but is hardly surprising. Convergys’ margins on these mega-deals were razor-thin, which left them open to these types of implementation risks. Those were magnified by their aggressively customized approach to each engagement, which did not allow them to capitalize on economies of scale across clients.

I wonder what changes this will drive not just at CVG, but in the industry as a whole? Will this change the way that advisory firms and customers approach deals? Will they be willing to accept more standardization to ensure the viability of their vendors? Not that anyone is shedding any tears for CVG today, but if this industry is going to survive, it seems like we all might have to move in a different direction.

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