Human Resource Analysis on BAE Systems-Xchanging Partnership

Human Resource Analysis
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Human Resource Analysis
Part 1
Sourcing Options
Restructuring human resources through shared services was the best option for BAE at the time. HR shared services imply the provision of services in a centralized form instead of decentralized service provision. Companies that operate within the confines of shared services are those with strategic business units (SBUs) that traditionally operated independently in their HR activities. Companies that intend to cut costs understand that controlling HR activities from decentralized nodes can be challenging, especially if each unit is motivated to operate optimally with its current enablers. At BAE, it was becoming impossible to sustain decentralization because costs were hiking while the company needed to cut its operational costs by 15% in a stretch. The choice for shared services was strategic for various reasons. Primarily, shared services cut down redundant employees leading to immediate impacts on cost reduction targets. There is also the need to trigger productivity and customer satisfaction at the end.
The choice for shared services with a third party was also strategic relative to the other options that the company faced. BAE sought the input of a management consultancy as one of the options. Management consultants can be advantageous, especially when the organization is motivated to restructure quickly. However, the long-term impacts of such a move are not acceptable to most organizations. BAE noted that using a consultancy comes with long-term limitations like the lack of skills transfer and lack of sustainability of results besides the possible escalation in big bang HR changes. The other option, fee-for-service outsourcing, also came with notable challenges. FFS has been used in multiple industries in which it was characterized by uncontrollable expenditures, disorganization, and overprovision. For a company motivated to reduce operational costs and maximize profits, adopting FFS would come with multiple challenges. Hence, among the options that BAE explored, only shared services proved robust in addressing the prevalent challenge while also addressing the cost management issue in the long term.
The choice for shared services may have been anchored on various advantages that the option bares. Primarily, technology is among the biggest challenges when it comes to managing costs in HR. However, shared services allow companies to fuse HR tasks with technology. While using SBUs, companies disintegrate their technological inputs depending on the requirements of the units. However, it becomes simpler to eliminate overlaps that escalate costs in shared services. HRSS is also linked to higher overall efficiency. HRSS eases task transfers within the HR hierarchy to allow for focus on talent pool development. The other benefits of HRSS include focusing more on HR strategy and steering operational consistency, which also impacts cost management initiatives.
There are, however, various drawbacks linked to HRSS that BAE and other potential implementers must explore before choosing the approach. Primarily, one size does not fit all the HR needs. Different SBUs manifest different resource needs and t...