Australia—Victoria State Government: Human Resources Business Process Outsourcing

Victoria decided to use human resource outsourcing consulting to facilitate the implementation of a shared services HR arrangement for two of its departments—Premier and Cabinet (DPC) and Treasury and Finance (DTF)—as well as for its internal IT operations. In 2001, Victoria and Accenture signed a second contract to expand the scope of the arrangement.

What Our Clients Say About Us
"We bounce ideas off its strategic HR leaders before we plan the implementation of a new program. Accenture has a lot of experience to bring to the table; it has become a trusted advisor in this regard."—Laurinda Gardner, Deputy Secretary, Strategic Management Division for the Victoria State Government's Department of Treasury and Finance

At the outset of the first contract in 1996, the DPC and DTF and ancillary bodies had approximately 1,100 staff members. The departments each had separate human resource functions, different payroll/HR software and differing work practices. It was decided to outsource these activities as seamlessly as possible to facilitate the convergence of practices between the departments. Key elements to the second contract in 2001 were transitioning to more self-service HR tools, improving the account-management systems and stepping up service delivery across the board.

The decadelong partnership between Accenture HR Services and the Victoria State Government has fundamentally changed the way the two departments view HR and how HR programs should be implemented. Accenture HR Services' experience in HR business process outsourcing, knowledge of the client's business operations and proven trustworthiness led departmental management to transition almost all operational activities to us.

"If a new operational task comes up, the internal HR director's first question should be: 'Who should do this?' and if Accenture can, we will talk to them," said Laurinda Gardner, deputy secretary of DTF's Strategic Management Division.

Solidifying this partnership, the Accenture/Victoria State Government contract was recently extended to 2006 and expanded to encompass a newly established agency, the Department for Victorian Communities. The scope of the contract continues to expand as well, with Accenture HR Services now providing full-service HR services including:

• Customer Contact Services.
• Resourcing Services.
• Performance Services.
• Learning Services.
• HR Advisory Services.
• Exit Services.
• HR Technology Services.
• Pay and Benefits Services.
• Information Services.
  
  

This is one of the world's longest-running, true HR BPO contracts. Working together, Accenture HR Services and the Victoria State Government have achieved a new breadth and depth of human performance capabilities. Strong relationships have been fostered within the state government, with significantly improved transition capability. Furthermore, systems are better integrated and the departments make far better use of technology.

Accenture has helped Victoria State Government to:

• Reduce HR costs.
• Define HR Service Levels and drive upward.
• Establish a single point of HR contact.
• Implement new technology to reduce cost, eliminate errors and increase access to information for managers and staff.
  
  

Tactics Employed
"In the initial contract, achieving cost savings was the primary driver and really the only concrete measure of the arrangement's success," said Leigh Maynes, service director-HR Services, Accenture. Both sides could point to the 30 percent savings to show that HR outsourcing worked. But interestingly, the senior officials were even more impressed by the potential to continue to focus on HR to further support business objectives.

In the second contract and continuing today, cost is not the primary factor. In an effort to become a high-performance organization, the departments wanted—and received—a much higher level of service. Accenture now owns the information technology that supports the services, thus, relieving the departments of another task. Today, Accenture HR Services and the Victoria State Government are true HR partners. "We bounce ideas off its strategic HR leaders before we plan the implementation of a new program," said Gardner. "Accenture has a lot of experience to bring to the table; it has become a trusted advisor in this regard."

This relationship has even stood the test of government turnover. When government leadership changed in 1999, Accenture stepped right in and helped the new governing party with its transition planning, including its staff recruiting. "Eventually, what we've created is a relationship that is no different from working with one of our internal teams," says Gardner.

"The initial contract was exciting for Accenture and the departments, because we were basically inventing the right solution with very little precedent to draw from," said Maynes. "It was a five-year contract focused on transforming the departments' HR function, which involved transitioning their transaction processing, including HR administration, occupational safety, performance management for non-executive staff and formulation and administration of workplace training programs. We were able to create a state-of-the-art HR system for the departments and outsource it at the same time."

Because the practice was so new, the departments decided to maintain control over a variety of HR services in this first contract, including executive contract and remuneration, policy development and review, maintenance of HR delegations and the coordination of a graduate program.

While this initial contract achieved cost savings in the vicinity of 30 percent, the departments agreed that they needed to seek more from the service provider in the second contract. They were looking for a provider with experience, knowledge of their business operations, commitment to making it work and trustworthiness.

Accenture HR Services—which by 2001 was a trusted partner—was chosen for this new contract as well. The new contract established a shared set of objectives. It introduced the concept of "non-exclusive services;" documented the HR processes, specifying the responsibilities of both the departments and Accenture HR Services; extended the outsourced arrangement to cover more policy and information support; and, introduced a comprehensive performance-management regime including a balanced scorecard and annual satisfaction survey. The end result was a significantly enhanced level of service—one that included employee self service, e-learning and many new processes that the government wasn't looking to invest in and implement on its own at that time.

Value Delivery Progress:

• Contract extension—now one of the worlds longest running true HR BPO contracts.
  
  
• Integrated HR/payroll system delivered, facilitating the implementation of employee/manager self service.
  
  
• Cost savings in the region of 30 percent.
  
  
• Standardization of HR processes while delivering to different employee terms and conditions through the departments.