We are at the turn of the century.

In just 37 days, we will say goodbye to an eventful millennium - a millennium of proud achievements : from astronomy, science and medicine, to international trade, communication and management. Mankind has succeeded in conquering the moon, but has failed to resolve the problem of poverty and deprivation on earth. We can communicate through the Internet with someone we have never met at the other end of the globe. However, ironically many senior managers find it difficult to communicate with their own staff working under the same roof and within a stone's throw. Turning Point At the turn of the millennium, Hong Kong is critically re-examining its competitive strength and identifying the opportunities the new millennium has got to offer. The Government is continuing to invest heavily in the territory's infrastructure, while Hong Kong re-positions itself as the financial, tourism and trading centre of the region and a leading metropolis of the world. The financial turmoil that swept through Asia in 1998 left few economies in the region unaffected. The Hong Kong economy experienced one of the most severe setback in its history. External demand was hit by the fall-off in regional demand while domestic demand shrank largely because of depressed local sentiments. As a result, the labour market has slackened, with wages softening and unemployment hovering at a high of over six per cent. The bad news of this painful economic adjustment is that many firms are left with the legacy of excess manpower and an unaffordable payroll. Downsizing, cost-cutting, retrenchments and redundancies have become virtually the order of the day. The good news, however, is that human resource (HR) managers are given renewed importance. For one thing, most of the challenges of downsizing are people-related issues that often require sophisticated HR interventions and support. The new millennium offers unprecedented opportunities for Hong Kong in tourism, technology, trade and finance. Our future prosperity will be built on our strength. We have one of the best ports, airports and mass transit systems in the world. We have some of the world's most efficient and cost-effective communication systems and one of the highest concentration of mobile telephones. We have invested one-fifth of our annual budget in education to ensure the supply of high quality manpower needed for our continuous economic growth. We have a rich and diversified cultural heritage, a bilingual open society and a free port. We do not have to compete on cheap labour and we must not. If we do, we shall be competing on our weakness. We have to compete on our strength, on our ability to manage opportunities, to add value, to innovate, and to deliver quality service to the total satisfaction of our customers.

urrent Role of HR in Global Recession: lSome of the Strategies Discussed to be adopted in current senario:A 10 commandments for survival : -Multiple Utility of Resources with enhanced Role & Responsibility Definition(Job Enlargement)-Enhanced Focus on Performance Mangement System-Build Ideal People/HR Processes -Move to Zero Bench/Unproductive resources (Work Just In Time with Institutes) -Just in time hiring ( Only in dire emergencies) Organisationwide Productivity Reviews -Reduce the lowest 30% of performers & Evaluate and Retain Top 20% who contribute 80% value Continue to Build value for Top Performers-Partner with Educational Institutes who would have Infrastructure & people-Partnering Synergy with companies who can offer extended Business Development services

Analysts, industrialists and academicians are of the opinion that a strategic mix of shared services and outsourcing is the new model that is driving HR teams in global organisations to achieve and sustain excellence. However, what is yet to be understood is whether outsourcing is really the pathway towardsattaining competitive advantage. Today, transformation of HR operations has shifted the focus from a traditionally reactive and administrative function to one that is tightly. market and human capital changes more rapidly. When AT&T enters into a seven-year outsourcing contract with Aon Consulting for combining the talents of its human resources and payroll organisations with Aons core competencies in employee benefits, compensation, employment and other services what is their prime motive? Most certainly, the obvious answer would reflect the basic principle kkore on its core competencies. Initially, outsourcing was done mainly to bring down costs, however, a changing feature of outsourcing today is that it no longer involves only low-key operations. Increasingly, services that are being outsourced are those that require highly skilled and qualified personnel who are able to provide the service quality standards required and this has led to a increase in the outsourcing of human resource services. Today, human resource professionals are expected to deliver more advanced and differentiated human capital skill sets, create and maintain high performing workgroups, offer technology platforms with increased functionality and direct access to information as well as partner with business leaders to align people strategies with business goals in order to achieve corporate initiatives. Dave Ulrich, a leading scholar in human resources, recently wrote that the competitive forces that managers face today and will continue to confront us in the future demand organisational excellence. The efforts to achieve such excellence through a focus on learning, quality, teamwork and re-engineering are driven by the way organisations get things done and how they treat their people. Those are fundamental human resource issues. To state it plainly: achieving organisational excellence must be the work of HR. The question for senior managers, then, is not should we do away with HR? but what should we do with HR? The answer perhaps is to create an entirely new role and agenda for the field that focuses not ontraditional human resource activities such as staffing and compensation, but on outcomes. HR should not be defined by what it does but by what it delivers results that enrich the organisations value to customers, investors and employees. In order to achieve its strategic business objectives such as

initiate top-line revenue growth and shareholder value, management of human capital has become critical. The current rate of economic, competitive, and political change demands cost flexibility in all functions of business. The mandate for the HR function is to work better, faster and cheaper. However, this changing role of HR is perhaps not well understood by all. A research done by Mellon Human Resource shows that it is only through a focused approach to HR s

hared services that companies can accomplish the imperatives demanded of the human resource leader. Todays organisations can no longer maintain the status quo in HR service delivery. HR no more identifies with its traditional reactive and administrative nature and there has been a clear shift in its focus to HR being very tightly connected to the business. The effect of this transformation is significant in making it possible for business to respond to market and human resource changes more rapidly. Our new model for organisations today is an offshoot of the obvious understanding that the traditional model of HR does not align with the evolving demand to achieve organisational excellence. A common theme has emerged towards decreasing the size of the HR function while moving transactional activities out and, therefore, deploying fewer human assets to perform these activities by outsourcing, leveraging technology and creating common approaches, processes and practices. This role of HR shared service, therefore, affords more time to organisations that can be utilised for strategic issues.

Changing Role of HR This changing role of human resource is the answer to

attaining a competitive advantage in the present market scenario, and this is reflected in the fact that more and more companies today are resorting to outsourcing of its HR services in order to keep pace with the competition and afford effective management of its human resource as a prime asset of the organisation. HLL (Hindustan Lever Limited) is perhaps one of the greatest examples of HR evolution. Being one of Indias oldest organisations with its traditional culture, Hindustan Lever has gone on to launch Hindustan Lever Network (HLN), a uniquenetwork marketing opportunity that aims to be the most preferred business opportunity by partnering its consultants and providing them with a business and self-development opportunity that is truly rewarding. As a result of this diversion, Hindustan Lever Network has identified the need to be excellent in every aspect. Since its core competency lies in business and products, HLN has started resorting to outsourcing of all other functions to devote more time to its strategic issues, reduce fixed cost and also initiate diversion of non-creative and non-business activities to outside agencies. It is this desire for excellence that it has led Hindustan Lever Network to acknowledge the growing importance of sharing human resource services. In this context, Hindustan Lever Network has approached Planman Consulting Group to outsource its entire training activities.The Planman-HLN association which has been formed to outsource HLNs entire training activities to Planman Consulting is one of HLNs initiatives to make time to concentrate on its core functions. To illustrate further the contention behind this association, HLN does not have expertise or related research in training and development while Planman-IIPM not only has the necessary expertise and reosurces, but at the same time induces cost reduction for HLN as compared to the investments HLN would otherwise bear if they were to do this in-house. Quite simply, adoption of this new model improves the ratio of human assets Over the years, a variety of models have been designed, considered

and even implemented in an effort to achieve this transformation towards HR outsourcing. Perhaps most recognisable to HR executives is the seemingly constant swing between centralised and decentralised models. In the past, organisations believed they could benefit from economies of scales with fully centralised HR services. On the other hand, however, the gain in flexibility to meet unique business-unit requirements related to decentralised service delivery carries higher cost and duplication of effort. Many organisations that have experienced this swing between centralised and decentralised operations are familiar with the results. One particular note is the belief of employees that the company lacks a common culture or brand. Instead, the heavily decentralised organisations find that business units create duplicate and contradictory HR practices, policies, processes and procedures. These differences across the company are not business requisites, rather the result of history, individual preferences and experiences. Shifting the focus of HR enables the organisation to direct attention on customers needs that include creating a company brand identity through leveraging economies of scale. To realise the benefits of both models, companies are shifting to the shared service approach that enables streamlining of processes across multiple units or locations while maintaining customer focus. This approach to HR-shared services becomes the critical lever empowering human resource leaders to support their businesses in a way as to advance the enterprises strategic objectives. The HR-shared services model has been employed by many leading companies to increase quality, improve service, and reduce processing cycle times as well as expense. For example, various human resource shared services models are found at IBM, Royal Bank of Scotland, Lockheed Martin, Warner Lambert, HewlettPackard, Sears and Boeing.

Efficient alright...but what about HR effectiveness?

HR is about people, and it is a common perception that HR efficiency is directly related to how much you know about your people and of course, there is no better answer to that than in-house HR services. But the changing model lays emphasis not just on the efficiency rather the effectiveness of human resource. In the shared service scenario, non-strategic HR activities and specialised HR expertise are removed from the business unit. The range of activities from transactional to HR expertise to business partners is vast. In our experiences to date, the majority of field-based HR staff have focused on the transactional activities, leaving little or no time available for partnering with the business or bringing depth of expertise around strategic human capital issues like employee development. Shifting transactional activities to technology and shared service organisations enables the organisation to take advantage of economies of scale and, therefore, affords the field-based human resource staff more time to truly focus on those activities at the business partner end of the spectrum. Today, HR managers in the business units are increasingly called upon as strategic business partners. But what do we mean by a strategic partner? The future HR business unit managers role encompasses six key areas of partnership (leadership development, strategic business change management consultant). To accomplish these new roles, most HR departments require fundamental change and growth of competencies. The Society for Human Resource Management (SHRM)

Foundation completed an effort comprising many years of data collection with major global companies that included General Electric, Westinghouse, Citigroup, AT&T, PepsiCo, Mobil, Oracle, ICI America, LL Bean, etc. The research culminated in a detailed HR competency framework reported in 2000. The framework, which is divided into three domains core, role specific and level-specific competencies provides a powerful foundation towards achieving the necessary capabilities to achieve HR and organisational excellence. The roadmap to human resource transformation is made up of many critical activities that serve to help organisations understand the current state, envision the future, build the model, validate the vision, and implement the new HR service delivery approach. The advent of technological advances has made it possible for a shared services function to have immediate and accurate knowledge of local policies, procedures, employee history and special arrangements, thus enabling a centralised function to provide customised service rather than one-size-fits-all service. Also, employees and managers are able to readily access and manage information without HR intervention. The use of direct access (sometimes referred to as self-service) is a key factor in the redistribution of activities performed by HR. Transactional activities are performed under a tiered service delivery model in which technology provides the first level of support to HRs customers. A customer-focused service centre provides the next level of support and relatively few issues escalate to human resource specialists. Our experience demonstrates that leading HR organisations are restructuring operations and leveraging benchmark data to set aggressive and achievable targets to reduce cost Our experience demonstrates that leading HR organisations are restructuring operations and leveraging benchmark data to set aggressive and achievable targets to reduce cost but more importantly create long-term value. Successful transformations

rely upon a combination of benchmark targets and better practices rather than any single measure. Consulting firms such as Mellon Human Resource and Financial Services, AnswerThinks Hackett Group and others have core capabilities in assisting organisations to identify the current HR operating cost baseline by analysing budgeted and hidden costs to deliver HR services. Executives must recognise the value of benchmark data in enabling solid decision-making that is tightly connected to the baseline data and benchmark comparisons. Targets for service improvement, cost reduction and efficiency in advancing HRs role must be closely tied to the baseline data. In fact, most of our clients today are heavily focused on targeting cost reduction while actually improving the quality of human resource service. Growing competition has changed the focus towards a more cus-tomer-oriented approach of doing business where excellence in customer satisfaction is the key to retaining ones market share. Under such a scenario, it is evident that a lot of time needs to be invested in instilling a more customer focused approach.

The growing importance of people service in business today has made it imperative for organisations to resort to HR-shared service which promises a specialists deliverance of every human resource function. Business today has realised the essence of the people factor in organisations as being closely related to its strategic business objectives. The new model which Mellon Research proposes in this paper will perhaps prove to be a guideline for companies today to withstand the implications of facing the changing role of HR in business.

Although most organisations have recognised the need to make this change and, therefore, accept the new practice of HR-shared services, there is still a question regarding which human resource activity to outsource. The new model proposed herein clearly defines the correlation of each function and its effectiveness as a result of outsourcing. Excellence in implementation of this new concept is the key to ensure effectiveness of this change. It is not just about cutting cost but a pathway to leverage excellence in efficiency by way of HR-shared services. The article is co-authored by Casey F. Thomas, Arthur Mazor of Mellon Human Resources and Investor Solutions, Boston & Rajlakshmi Saikia, Indian Institute of Planning & Management, New Delhi, India.

Reference Thomas F. Casey and Arthur Mazor; Transforming The Human Resource
Function Through Shared Services; Human Resources and Investor Solutions, Boston News release, May 29, 2002, AT&T Signs Outsourcing Agreement with Aon Corp.

THE NEW MODEL DESIGN By: Mellon Human Resource and Investor Solutions The main objective of this phase

assist in the realisation of HRs business imperatives. Each organisation is different and must con professionals and epresentative customers of HR are involved in the design effort. Design must b current state of HR to ensure that the future design can be effectively implemented. Understa companies that require major technology upgrades to achieve a particular future state design m resource constraints. We have, however, cautioned our clients against focusing in too much d required to understand operating roles, technology functionality and infrastructure and major overall operations of HR today to guide their design of a realistic future state that meets busine model that will focus on four key areas people, process, organisation and technology. The guid of human resource, expectations for use of technology and savings/investment targets. Our mo decision-making. All team members must understand how to resolve issues as they rise through

People: Design/Redesign Roles and Responsibilities

The roles and responsibilities of human resource professionals must shift to enable the new mod customers, HR roles must be reshaped and redefined. The skills and capabilities required to pe individuals to these new roles determined. To ensure HR meets the new goals set, the model mu basis. But more important than collecting data for the purpose of ensuring operating metrics are crafted to document the HR organisations commitments to supporting business goals.

Organisation: Develop Service Delivery Matrix

A service delivery matrix is developed to delineate where activities will be performed for HR pr what in the new environment. This shapes the detailed design of the organisation and directly arrangements must be considered in determining how best to deliver the new model. Organisa

making outsourcing an attractive option. The option becomes additionally attractive when invest no up-front investment, providing financial flexibility relative to implementation costs which opportunity is particularly attractive when investment dollars are low or immediate payback is re of outsourcing to achieve the maximum benefit.

Organisation: Develop Service Delivery Matrix

Streamlining and standardising processes is the goal of the process design/redesign. By prioriti Processes should fit the new model and leverage the automation provided by the new technolog illustrate the change from the current environment. During redesign, a gap analysis is performed top internal better practices to identify the future norm and advancing those processes by in most effective processes. Through a team-based approach involving participants from across the implementation.

Technology: Select Enabling Technology

The selected human resource delivery model and process designs must drive technology decisio approach where the technology selections are driven by capability in a functional area rather tha

QuickTime and a decompressor are needed to see this picture.

Q ic T e a da u k im n d c mr s o e o pe s r a en e e tos eth p tu e r edd e is ic r .

QuickTime and a decompressor are needed to see this picture.