Northgate Arinso (NGA) is fairly well-known as an HR outsourcer, particularly in Europe (and now in North America, with its acquisition of Convergys). What’s lesser known is that NGA also provides its own platform (euHReka) that cuts across payroll, HR administration and talent management. Northgate Arinso gave an analyst update earlier this week. Here are a few key takeaways and my analysis:
- Good self service is key to outsourcing. Mike Ettling, CEO, identified streamlined self-service as a much more significant portion of outsourcing value than say, offshoring. As a result, they’ve built their own UI/technology layer on top of SAP, optimizing self-service for their outsourcing customers. What’s more, NGA made a good argument that they were in an excellent position to build good self service. As outsourcers, they get complaints first hand and are tangibly incented to make self service as easy and seamless as possible. This is indeed an advantage in workforce admin, though the argument doesn’t necessarily hold up for talent management applications which are generally not outsourced. The advantage of incorporating talent management into the self-service platform comes in the next point.
- Getting the basics right enables strategic transformation. By taking good care of administrative HR activities, organizations can direct focus on more strategic programs (such as talent management). NGA’s single platform for Payroll, HR, and Talent Management is in line with the growing trend toward unified HCM, in which organizations can take advantage of the seamless data and transaction integrations, increasing efficiency, effectiveness and visibility. With NGA’s platform, customers can outsource payroll and workforce admin across a wide range of payrolls (SAP delivered + some added by NGA + partners) and insource their talent functions, all on the same platform. But what about business activities? The strength of SAP (or at least what should be a strength) is the ability to bring together multiple business functions into one UI/workflow/etc. NGA is just HR for now, which could be limiting to some organizations looking to take full advantage of SAP’s offerings.
- SaaS/rapid updates/modern UI offer advantages while continuing to leverage SAP investment. Many SAP customers are stuck with outdated releases and user interfaces with costly upgrades ahead of them to get to more recent features. Though SAP has made some inroads here with its enhancement pack strategy, many customers are looking to a quicker, cheaper time to value. NGA offers this along with a further motivation – the ability to leverage existing SAP investment and stay within the organization’s IT strategy (i.e. use SAP). The architectural abstraction from SAP is solid. The UI follows more of a mental model than the traditional “data model” of ERP’s (as in each table in the database is represented on a separate page). People don’t work like relational database structures, so the ability to abstract the data model and present data and transactions in a simpler way is a huge value add. Plus, there are things that SAP just hasn’t gotten to (country extensions, talent features) that NGA can add in easily to the existing data model. There is no doubt this is a stop-gap measure until a) next generation platforms with the functional breadth and regional depth of SAP are available and b) organizations are willing and able to re-platform. But for many, this will be a long-while and NGA offers a great alternative.
Bottom line: In addition to providing multi-country outsourcing services, Northgate Arinso provides a multi-tenant, modern platform based on SAP data structures. Organizations that are looking to stay within their SAP IT strategy and leverage existing investments can find an appealing alternative with Northgate Arinso.
Your POV: Are you an SAP customer? Are you considering a change in your HR system? Have you considered Northgate Arinso?