Automotive Manufacturer Slashes HR Service Costs by 66% in Just Seven Months
Within seven months of program completion, HR expenses were reduced from US $20 million to $6.8 million per year.
This company’s customer base includes practically every major manufacturer in the worldwide automotive, commercial vehicle, and off-highway markets, since it is a multibillion-dollar global leader in manufacturing automotive components.
As the company emerged from bankruptcy, its Human Resources (HR) officials sought to minimize service expenses, which were averaging US $20 million per year. They devised a strategy to “right-source” essential human resources operations that had previously been outsourced to a single contractor. The corporation anticipated to improve HR services while drastically reducing costs by bringing the majority of services back in-house and working with a variety of best-in-class service providers for select components of the program. The HR Transformation Program includes 15 discrete projects in all, spanning all facets of HR service delivery, such as Payroll,
Benefits, Health and Welfare, and Pensions.
However, after eight months, the entire initiative was in risk. Key project milestones and deliverables were not being fulfilled, and crucial cost overruns were piling up. With only four months left to complete the whole HR Transformation Program, the CIO discovered that the organization lacked the program management experience necessary to accomplish the desired results.
The CIO asked PM Solutions to take over program management oversight for the HR Transformation Program on a Thursday evening. The next Monday morning, PM Solutions dispatched the first of two world-class Program Managers to turn the difficult initiative around. This effort necessitated expert interface management between the customer, the departed service provider, and a slew of new service providers. Tensions between stakeholders were high, and managing expectations was vital to success. The veteran consultants reset client/vendor requirements, milestones, resource predictions, estimates, and delivery targets using PM Solutions’ patented Project Review and Recovery methodologies.
The program’s 15 projects were completed on time and on budget, with no service delays or outages throughout the pilot, transition, or go-live phases.
Within seven months of program completion, the client had reduced HR expenses from US $20 million to $6.8 million per year, and is targeted for a $5 million per year run rate.
Because of the success of this endeavor, PM Solutions has continued to work with this client to develop an organizational project management methodology, mature portfolio management processes, and assist in improving project execution across the organization.