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0509 Convergys

September 1, 2005
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Avaya, a telecommunications firm in Basking Ridge, N.J., focuses on designing, building, deploying, and managing networks and serves more than 1 million businesses worldwide, including more than 90 percent of Fortune 500, nonprofit agencies and the U.S. government. When the company was spun off from Lucent Technologies in 2000, Avaya inherited Convergys as an HR BPO provider. Avaya wanted to grow its business globally, but at the time, Convergys only had U.S. services. As often happens during restructurings, Avaya decided the provider they inherited would not meet its global needs and decided that bringing its HR process in-house would be less expensive and more productive. So Avaya and Convergys parted ways.

The spin-off required Avaya to implement a new Enterprise Resource Planning (ERP) system in 90 days (Avaya selected SAP), and to establish the appropriate technical infrastructure to support a global workforce and the most effective mix of regional and local HR operations. Bottom line: the organization needed to get a global human resources function up and running quickly.

Avaya’s HR department added headcount and decided to create a self-service structure, intended to better serve its workforce while allowing HR to focus on more strategic initiatives. But the company quickly learned it did not have the tools and processes in place to deploy a self-service tool.

It didn’t take long to realize that HR BPO was the solution Avaya needed after all. But with 20,000 employees in 52 countries, Avaya still needed a global provider. Steve Melamed, Avaya’s Vice President for Global HR Operations contacted Convergys to renew a partnership for a shared services strategy because Convergys had proven during work with Lucent that it had the tools and processes to implement an effective solution. Another factor in the decision was that since the parting, Convergys had taken steps toward becoming a global provider.

Melamed met with Karen Bowman, president of Convergys Employee Care. The two companies worked together to accomplish the goals of both organizations. Convergys purchased the global HR Service Center footprint Avaya had created on its own, and the two entered into a multi-country, multi-language outsourcing contract. Convergys had the HR BPO expertise Avaya was lacking and provided tools such as business intelligence, case management and priority-setting for successful migration.

Setting and adhering to clear objectives and working collaboratively was key for success, Melamed said. Avaya goals: to increase data accuracy, deliver data faster and more cost-effectively, using an efficient self-service model. The organizations agreed to target self-service for 70 percent of service-center transactions over the life of the five-year agreement. In addition, Avaya looked to Convergys to reduce HR transactions and costs, leverage internally built systems and operations, manage its disparate worldwide workforce and drive increased value through measurable HR services.

As it turned out, Avaya reached its goals before the two-year mark. Even more impressive, year-to-year savings were approximately $2 million, in addition to the streamlined employee life cycle workflow and reduced correction processing. Getting there is a credit to Convergys’ building a tailor-solution that met the client’s needs. "If you don’t make the right up-front moves in an HR BPO deal, mistakes keep happening," Melamed said.

First, the organizations clearly defined "governance"—which party would be responsible for what, with a clear decision-making process. Melamed mused, "It’s rare to find a partner who will sign up for clearly articulated cost reductions, but we found one." In fact, Convergys agreed to an often-unheard-of stipulation: Convergys loses the contract if it fails to meet SLAs in even one global region.

With its work cut out, Convergys didn’t rely on standard customer-service metrics—such as average time-to answer calls—as measures of success. Instead, Convergys entered into SLAs based on quality provided locally. For example, how quickly a key transaction can be closed or whether new-hire letters are sent out within 24 hours – as well as guaranteed service levels and response times.

Convergys HR Business Process Outsourcing (BPO) experts focused on redesigning processes to improve case handling and service response times, lower costs, and utilize existing software and technology to maximize the value of previous investments in SAP and other technologies.

They also recommended the application of best-practice methodologies to further streamline operations and gain greater efficiencies, including acquisition of Avaya’s global HR operations network of employee service operations serving Europe, the Middle East, Africa, and Asia Pacific and reorganizing them into global shared service centers; and assumption of vendor management responsibilities to deliver improvements in cost, efficiency and quality.

Convergys worked with Avaya to consolidate processes and systems in global service centers supporting 15,000 Avaya associates in 52 countries in more than 20 languages and with a high degree of HR service consistency. HR services delivered include recruiting and staffing, HR administration, payroll, benefits solutions and learning solutions, including e-learning.

The results were clearly measurable. The client realized a savings of more than 30 percent each year. Responses were faster and more accurate, with 80 percent of cases closed with five days (compared to Avaya’s prior record of 50 percent closed within 10 days). The intelligence tools provided by Convergys allow Avaya to track efficiency of HR programs with greater precision and discover work force trends and patterns. And a less tangible, but equally important benefit: Convergys helped foster an HR self-service culture among employees.

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