{"id":1949,"date":"2008-07-17T22:14:00","date_gmt":"2008-07-17T22:14:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/the-tsa-awards-its-hro-engagement-to-lockheed-martin-an-overreaction\/"},"modified":"2008-07-17T22:14:00","modified_gmt":"2008-07-17T22:14:00","slug":"the-tsa-awards-its-hro-engagement-to-lockheed-martin-an-overreaction","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/the-tsa-awards-its-hro-engagement-to-lockheed-martin-an-overreaction\/","title":{"rendered":"The TSA awards its HRO engagement to Lockheed Martin &#8211; an overreaction?"},"content":{"rendered":"<p><P>There&#8217;s been a lot of noise in the market this week concerning the TSA&#8217;s award or their <A href=\"http:\/\/www.lockheedmartin.com\/news\/press_releases\/2008\/0708_bps_ihop.html\">HRO contract<\/A>&nbsp;to Lockheed Martin.&nbsp; While this is clearly a bold move into HRO for Lockheed, this isn&#8217;t likely to prove a major loss for Accenture.&nbsp; Why?<\/p>\n<p><!-- pagebreak --><br \/>\n<\/P><br \/>\n<P><\/p>\n<ul>\n<li><strong>Times have changed for HRO. <\/strong>The initial contract was established in 2002 &#8211; a time when the HRO market was on a major upswing and the 9\/11 attacks had put Homeland Security firmly under the microscope. While the Federal sector is clearly a crucial&nbsp;market for Accenture, you&#8217;d have to question whether Accenture would be so interested in Federal HR services in today&#8217;s outsourcing environment. With the presidential election looming and a possible de-emphasis on massive investments in Homeland Security, this sector is not as attractive as it once was for a services provider. Demand for application services is rampant, combined with some areas of BPO (notably F&amp;A), where Accenture is a market leader. Add to this the fact that HRO has slowed and will take time to rebound, and you have to question whether Accenture is as motivated as it once was to invest resources into this area, when they have so many other growth opportunities. Their recent 20% revenue hike from last year and record quarterly revenues, coupled with further double-digit growth in consulting and outsourcing, are testament to the fact this company is firing on all cylinders.\n<li><strong>The Federal Government sector isn&#8217;t&nbsp;primed for&nbsp;the traditional sourcing model.<\/strong> Most of the established sourcing advisors are not accredited to work with the Federal government (with the exception of <a href=\"http:\/\/www.equaterra\" target=\"_blank\" rel=\"noopener\">Equaterra<\/A>). Moreover, most of the Federal agencies use their inhouse procurement arms to evaluate those vendors on the accredited supplier list, and only use the traditional consultancies, which have Federal approval, for their sourcing decisions. Often this is not to the benefit of the outsourcing providers from the commercial sector, who are unfamiliar and uncomfortable with the Federal Government procurement process.\n<li><strong>It wasn&#8217;t as big a deal and many people think.<\/strong> While Lockeed assumes a new deal size estimated at $1.2 billion, Accenture&#8217;s previous tranche of the TSA HRO contract was far, far smaller than this (<a href=\"http:\/\/www.govexec.com\/story_page.cfm?articleid=24711&amp;ref=rellink\" target=\"_blank\" rel=\"noopener\">$214 million<\/A>). It only handled the post-hiring employee support activities, benefits admin and payroll, while <a href=\"http:\/\/www.cps.ca.gov\" target=\"_blank\" rel=\"noopener\">CPS Human Resources Services<\/A> handled all employee-verification, recruiting and pre-hire activities and <a href=\"http:\/\/www.avuetech.com\" target=\"_blank\" rel=\"noopener\">Avue Technologies<\/A> the recruiting workflow systems. <\/li>\n<\/ul>\n<p><P><\/P><br \/>\n<P><strong>For Lockheed Martin, this creates a great testbed to develop an HRO offering.<\/strong>&nbsp; Lockheed Martin is a well-respected government services provider. The firm clearly has its eye on supporting the Homeland Security Department&#8217;s headquarters operations.&nbsp; This could be up to three times the size of the TSA engagement and the sheer size of this engagement gives them the platform and resources to develop a competitive HRO offering.&nbsp; I&#8217;d be surprised if Lockheed has serious HRO aspirations outside of the government sector, although it&#8217;s not inconceivable it could compete for HRO contracts in the aerospace and hi-tech sectors.&nbsp; However, it will take time for the firm to develop a workable HRO model for the TSA that can be leveraged across other entities.&nbsp; <\/P><br \/>\n<P>All in all, it&#8217;s refreshing to have new domestic entrants into this sector, in addition to the <a href=\"http:\/\/www.horsesforsources.com\/2008\/06\/taking-the-hr-function-offshore-is-this-the-answer-to-hros-slowdown.html\" target=\"_blank\" rel=\"noopener\">offshore giants<\/A>, which has had&nbsp;its challenges in recent years, and it&#8217;s the end of a chapter for Accenture, which put a lot of effort into getting the TSA fully operation (not a simple task for any provider).&nbsp; It will be interesting to check back in with the TSA in a few months&#8217; time to see how they are fairing with such a complex engagement.<\/P><\/p>\n","protected":false},"excerpt":{"rendered":"<p>There&#8217;s been a lot of noise in the market this week concerning the TSA&#8217;s award or their HRO contract&nbsp;to Lockheed&#8230;<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,79,80,86],"tags":[],"ppma_author":[19],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The TSA awards its HRO engagement to Lockheed Martin - an overreaction? 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