Human resources: Outsources with care
HEADNOTE
establish a contract without performance measures that would determine whether the job got done; spend months upgrading to a software version that will never be used, then upgrade hastily to a version that causes major problems and let the contractor operate the system for two years without a contract.
MANAGING TECHNOLOGY
Here's how not to outsource a human resources computer system: Hire a contractor with no experience to install an untested system; pay more than double the expected amount for setup;
The Federal Energy Regulatory Commission learned those don'ts of HP, outsourcing the hard way when it contracted to get a new payroll system through the Veterans Affairs Department's franchise fund program, which encompasses a number of feefor-service operations that sell services to other agencies. In the end, FERC ended up transferring maintenance of its payroll software to a HR technology firm, and the VA ended up $2.6 million in the hole with a healthy list of lessons learned as an outsourcing provider.
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