Perceptions of the HR space and the making of an HR outsourcing powerhouse
Northgate Arinso is well-known in England and Europe. My knowledge of the company goes back to the days when they operated one of the largest and oldest payroll service providers in England: Peterborough. The company’s presence in North America has been more limited, that is, until its recent acquisition of the HR BPO practice of Convergys.
That acquisition may make Northgate Arinso one of the largest, if not the largest, North American HR business process outsourcing providers. This deal makes Northgate Arinso a major human resource outsourcing player in the UK, Europe and North America.
A few months ago I ran into them again at Bill Kutik’s HR Technology show in Chicago. At that event, my colleague, Katherine Jones, and I got an in-depth briefing on one of the coolest things Northgate Arinso had done to date: they made a multi-tenant SaaS version of SAP’s R/3 HR software.
I spoke with Mike Ettling recently. Mike is the CEO of Northgate Arinso. I asked him a few questions related to this deal and the HR space in general.
I asked him how does the Convergys outsourcing solution fit in with your existing SAP HR offering? Mike indicated that many of the Convergys deals were SAP and PeopleSoft application outsourcing deals that varied from customer to customer. Northgate Arinso brings a platform that permits its Eureka or Eureka on-premise solution to sit on top of on-premise SAP software in their data centers. Likewise, they possess Eureka Hybrid. Mike also reminded me that they are doing PeopleSoft outsourcing for select large clients, too.
I asked if we’ll see more mergers/acquisitions/divestitures in HR BPO or for Northgate Arinso? Mike said that this (i.e., HR BPO) is a market that will continue to consolidate. He also believes that the HR SaaS market will consolidate as well.
What are Northgate Arinso’s market plans going forward? Mike wants the company to be the leading HR Outsourcing firm in the world. They’ve made moves to gain share in the North American, Australian/New Zealand and other markets. The U.S. market is especially attractive to them as so many large multi-nationals are headquartered here.
What needs to change in HR to make HR BPO more commonplace? Mike says that HR lacks ‘standardization’. HR, unlike IT or Finance, doesn’t have standards for work processes or outcomes like IT has ITIL and accountants have FASB. In HR there is no standard for how to do even simple tasks like change an employee’s home address information.
A few weeks ago, I was reading a colleague's newsletter where he bemoaned the fact that too few British technology firms ever get to any real mass before agreeing to be bought by non-UK technology firms. Already, Northgate Arinso appears on a single-minded objective to become one of (if not) the largest HR technology firms on the planet. As for focus, strategy and ambition, they may become a very powerful force in the space. And, they may just become a firm to put UK technology on the top of a category.