Permanent Reminder of a Temporary Feeling

Okay, I stole that from Mr. Buffett, like I do many of my good lines.

However, it is appropriate as the dreaded budget season nears and once again the business model most people use is cut costs (heads) figure it out later. This is not a business model, it is a single period band aid.

The reality of the new global economy is just that, global. You can hide from it, hope it goes away or even listen to politicians who claim to care but have no intention of doing a thing. Not a good strategic decision in the free market economy my Friedmanites.

You must consider all new venues to bring better, faster and cheaper product to your clients or they will find it someplace else my friends. Do you think your competitors are content? Not doing much of anything? Wrong!

A good example is to surf the web for software, where you can find ERP with big time functionality for $95 bucks a month. Do you think SAP isn’t reacting to that, or doesn’t have a palatial research center in Bangalore?

It can be technology, capital equipment, new products and better ways to get things done. The available talent on the world stage is large, and sure it may also cost less, but when productivity and cost per unit continues to drop long after you offshore your budget will notice the difference in the form of EBITDA margin where it counts.

Changing you business model will live through the five year budget, not just 2011. Do you want to be a budget hero in your organization or be told to cut a couple and deal with it?

Please come by and see us at NAPEO to learn how. It isn’t for everyone, but the good news is we are already there and have done this several times, so our advice will be based on experience and honesty not “sure we can do that”.

Safe travels and watch those bulls.

Join Us at the NAPEO Professional Employer & Marketplace 2010

Date: September 27 – 29, 2010
Location: JW Marriott San Antonio Hill Country Resort & Spa – San Antonio, TX

This year’s theme is “Selling the PEO Solution: Turning Challenges into PEO Profit Centers”. To help you overcome these challenges in today’s market, look no further than Cognet HRO. As a leading provider of offshore Business Process Outsourcing (BPO) services to companies in the Human Resource Services business, we’re ready to help you tackle these challenges head-on. For example, if you are in the Payroll or Benefits Administration business today we can support your “back office” tasks in a global setting, freeing you to direct your time and money towards your clients.

Be sure to visit our booth #520 where you will have a chance to access our global team on a 90-Day Risk-Free, No Obligation Free Trial. We are so confident in our ability to impact your bottom line that we want you to experience how an offshore operation can make your organization more efficient first hand. We allow you to focus on applying those new found sales techniques and retaining your customers, not spreadsheets and non-value added activities.

Can’t wait? Click here to complete our information request and be one step closer to learning how Cognet HRO can help lower your costs and improve productivity.

For more information about the event, click here.

We hope to see you in San Antonio!

Insights from IPPA

The 2010 IPPA event was our first, but surely not our last!  We would like to thank those of you, and you know who you are other than kind board members, for coming by our booth in the back near the booze to talk about Cognet HRO.

Building value, minding process and being different are the themes most discussed, in the classroom and the casino.  Maybe we weren’t clear enough on how we can impact those issues quickly and effectively, so here it goes.  Cognet HRO will lower your operating costs and raise productivity.  We do your “back office” work on your system so you can focus on sales, service and adding new value to your clients.

The theme that stuck with us at this year’s meetings is similar to the other segments of the HR Services space that we support.  It is about building more value in your business, both in product and profit.  Hey, we are an ISO certified vendor so nobody enjoyed “It’s all in the Process” more than me, but the bottom line is adding services to be stickier and increase revenue and lowering cost to serve.

Building more product and delivery increases shareholder value.  We heard from both members and vendors that the need to expand product and services is critical.  If you own your technology, then that is your asset and the business you are in, but if you provide services the more the better.  So maybe you want to get into benefits administration but are wary of the cost, expertise and tools to be provided.  Why are you waiting?  You know it adds value to your clients and additional revenue.  Maybe it is the cost!  So what, you add a new product at $10 per member per month, but it cost you $8 to deliver.  Imagine if it cost $5.  Talk to Cognet, we have the expertise, tools and lower cost to get the job done and make you look good.

Differentiation is hard to come by in a commoditized product, but not impossible.  The only way to get there before the world got flat was to be bigger, make it up in volume they always say.  That game has changed my new friends.  You don’t have to completely overhaul your business, simply take those different ideas out of your head and task your best people to execute for you.  Oh yeah, they have day jobs and are way too busy to help you, so I guess that will never happen.

Here is a little secret, we can take your key employees through a 12 step program for spreadsheet dependency and give them the time to focus on new products and customers.  You have the talent in-house today to move the needle, you just need us complimenting your Operations, Finance and Technology shops underneath to lower cost and free up time to focus on being special.

Be different, expand your business at a lower cost and make your stakeholders happy!  Differentiation is building value, so if you don’t want to just sell your contracts at market to Paychex one fine day and believe in what you are doing then call us.

Our Clients Say it Best

A client of Cognet HRO recently sat down with us in our Quarterly Governance Meeting, included as part of our ISO process, and shared with us why saving less money on their end was the right decision for their business.  We would like to share that experience with you to improve understanding of the use of a global business model, and that there are two sides to the math and decision making process.

“We had already moved several business processes to Cognet HRO when personnel changes in our payroll production area made us consider a move.” said the Chief Executive Officer.  “It was obvious to us that it is a transactional process, but our perception had been that it was far too critical to not have it “in house” for control purposes.  We learned they had years of experience in production of U.S. payroll on several popular HRIS systems, so we engaged them to scope the project and possible transition.”
The initial Statement of Work planned for the documentation, training, parallel testing and entry into production over a few months.  “The shocking part was that their (Cognet) recommendation was not something we had considered for the same reasons.  We did want to keep some staff for their years of payroll experience, and in case of emergency.  However, we didn’t consider the middle ground of having them focus solely on customer service, while being a critical part of capacity planning.”

There were 16 processors in the payroll operation at a fully loaded (labor and overhead) cost of $72,500 per employee.  The suggestion was that once full production was agreed upon, only a portion of the positions would be eliminated in the U.S.  The cost and time zone differentials would allow the retention of the “best and brightest”, get them moved into our customer service organization and still have the capacity if required from the team as a whole.

“It was a “win win” for both teams that surprised us all.  The transition of payroll talent into customer service representatives didn’t go smoothly for all, but in the end we retained our most dynamic team members who are now focused on customer retention.  We also have that capacity when we need it, but as we grow we find that we do so offshore at a known and considerably lower price point.” said the CEO.

There is usually a middle ground to global delivery.  The right partner with specific experience can make the difference, and make suggestions that allow not only cost savings, but also revenue growth.  Sure, you can save as much as you wish if that is your only objective, but the gains available in your company can come to fruition in several formats.  Instead of saving $1 million you may find that you save $0.5 million, gain capacity and also retain $2 million that you may have lost without the focus.

There are many ways to skin a Tiger, but please let the experts help you with that engagement.

Going Global, Made Easy

Outsourcer, outsource thyself!  The fact is that we are already in the outsourcing business, and our clients both trust and pay us to do stuff that they simply don’t want to do.  So why is this any freaking different?

Y’all asked a lot of great questions and here are a few examples with the more thought out answers.

Q:           So, what the heck does Cognet HRO do?

A:            “We inspire HR Service providers to go global.”  We realize that our fancy marketing speak, while pleasant, may not get the point home in a short time period.  We lower cost by doing your back office work on your system offshore.  We also guarantee that savings, as well as productivity gain and crazy amounts of measurement.  You don’t have to hop an international flight, just rent our experts.

Q:           Can you get a call center up for me with a really heavy Indian accent?

A:            No!  We don’t do phone calls, in fact we like Google Chat and provide you a custom client portal.  We do HR Services business process outsourcing along with some Accounting and Technology work, and only for HR Services companies, not plane reservations or technical support.

Q:           If I do this, what would it cost?

A:            Now that is an easy one.  We typically charge on a per seat per month basis, much like your per member per month fees to your clients.  It depends on shift (U.S. Day or Night) and skill level required, but for the most part we will be at least half of your current fully loaded labor cost.  No overtime, benefits, taxes, vacation, cubes or BS.  You can save money, create capacity or re-task your best, the choice is yours.

Q:           We are really worried about what our clients may think.  How do we overcome that objection?

A:            Imagine a nuclear submarine and you have it right in your mind.  We are silent, always underneath the water and ready to serve, but we maintain radio silence.  We work submerged in your service organization and you are our customer, we will leave the customer contact to you.  It is our goal to transition and improve your business processes to free up your time to be client facing.

Q:           How will my employees react?

A:            As we said, we have been on both sides of this fence for years now.  We are a team of U.S. and Indian based professionals and we already know the shenanigans that are on the way from both sides of the pond.  We have seen this movie, from Hollywood and Bollywood, and know how to make the popcorn.  We will train on both sides and are careful to consider culture and how it affects a collaborative model such as ours.

Q:           Is the food spicy in India?

A:            Yes, and watch the vegetarian dishes, they will sneak up on you in Southern India.  Also, never challenge the chef to make it “Indian Hot” unless you have a death wish.