Case StudyCeridianAccelerated growth. Delivered. Service Delivery Innovation at CeridianCase in BriefCeridian, a leading provider of human resourceoutsourcing, was competing in a growing marketwithout a full understanding of the challengesits HR manager customers faced. Working withStrategyn and Strategyn’s Outcome-DrivenInnovation (ODI) methodology, the companywas able to:Discover opportunities for service delivery innovation bylooking at customer needs from the perspective of thejob the customer is trying to get doneDevelop an innovative set of service delivery standardsand tools that have helped establish it as the provider of“the best care in the industry”Improve its Net Promoter scores from clients who haveused its enhanced services by 27 percentClient ChallengeA leading provider of outsourcing services, Ceridianprovides its corporate clients with HR, payroll, andbenefits administration services while serving as the firstline of contact for client employees who have HR-relatedquestions. For many of its clients, Ceridian becomes thecompany’s HR department and has daily interaction withclient employees.Back in 2003, Ceridian had already been in the HRoutsourcing market for a few years. Although strongoperationally, Ceridian lacked the insight into customerneeds that would enable it to create a distinctive brandidentity for quality customer care. The market wasexperiencing rapid growth, and Ceridian executivesrealized that the company needed to create a uniquecompetitive position built around innovations in servicedelivery. As Lance Reschke, vice president of Ceridianhuman resource outsourcing, explains, “We wanted anexternal view of what an innovation path would look likefor this market. It was a relatively new market with a lot ofnew entrants, and we needed an understanding of howbest to differentiate ourselves from our competitors.”

Case StudyCeridianHow Strategyn HelpedCeridian relied on Strategyn’s ODI methodology tounderstand the needs of HR executives who outsourcedhuman resources. To guide service delivery innovation,Ceridian relied on interviews with 30 executives responsiblefor at least three HR functions within their organization tomap the job of outsourcing human resources.The job map included steps such as understanding theimpact of implementing HR outsourcing, defining serviceneeds with the service provider, implementing a newservice arrangement, supporting the outsourcing service,managing HR transactions, adapting to changes incompany requirements, and supporting employee needs.From these same interviews, Ceridian uncovered nearly40 outcomes used to measure success when outsourcinghuman resources.“It’s not about driving the how. It’s really aboutthe what—what is the customer trying toaccomplish, and how can Ceridian bestrespond to the customer’s needs? This effortand Ceridian’s overall focus on the customerare opening doors for us to explore moreoptions and ways to solve a problem than wewould have discovered with a typicalsatisfaction survey.”—Lance Reschke, Vice President of Human ResourceOutsourcing, CeridianThe Opportunity LandscapeSatisfactionThe opportunity landscape revealed anumber of areas in which HR executivesfelt underserved. Guided by this strategicinsight, Ceridian introduced servicedelivery innovations that have helpedestablish it as the provider of “the bestcare in the industry.”To learn more about the opportunitylandscape, see Anthony W. Ulwick,What Customers Want (New York:McGraw-Hill, 2005).LegendOutsourcing OutcomesImportanceService Delivery Innovation at Ceridian2

Case StudyCeridianNext, 265 human resource professionals were asked torate those outcomes for both importance and satisfaction.The resulting opportunity landscape revealed considerableopportunity for service delivery innovation: 24 of the HRoutsourcing outcomes were underserved.The opportunities for service delivery innovation thatCeridian uncovered fall into two broad categories. First,there were opportunities related to implementing anew outsourcing service. These included minimizing thelikelihood that the vendor misunderstands customerrequirements, minimizing the number of outsourcingimplementation details that are not communicated tothe client, and minimizing the difference between theestimated and actual implementation times. In evaluatingthese opportunities, Ceridian realized that the key toimproving customer satisfaction was improving collectionof customer requirements and communication duringservice implementation.“We wanted an external view of whatan innovation path would look likefor this market. It was a relatively new marketwith a lot of new entrants, and we needed anunderstanding of how best to differentiateourselves fromour competitors.”—Lance Reschke, Vice President of Human ResourceOutsourcing, CeridianSecond, there were opportunities related to utilizing thecapabilities of the outsourcing service. These includedminimizing the time it takes to transfer HR data to andfrom other systems and minimizing the amount of timethat internal HR personnel must be involved in HR activitiesthat have been outsourced to the vendor. Ceridian wassurprised to learn that the movement and preparation ofHR data were pain points for customers. “In our definitionof products at that time, we didn’t view getting the datainto the system as a responsibility of our payroll product.Our view was that the payroll product started once youhad the data in the application. It wasn’t something goinginto the ODI process that we would have identified asbeing an area of concern,” Reschke said. But in evaluatingits customers’ unmet needs, Ceridian realized thatanything that required manual intervention on the partof the customers created the potential for errors, delays,redundancy, and confusion in obtaining the benefitsfrom its service.Service Delivery Innovation at Ceridian3

Case StudyCeridianThe ResultsBased on the insights gained from the ODI study, Ceridiandeveloped a detailed set of best-practice service standardsand process flows that help clients visualize the service andmake it easier for them to discuss their requirements ateach step along the way. When Ceridian takes on a newclient, it holds a series of kickoff workshops that discussbest-practice recommendations for structuring the taskthe client wishes to outsource. The workshops also letCeridian collect the client’s particular business rules forthe task. In addition, Ceridian’s tools make clear to allparties the critical processes and employee touch pointsfor the outsourced task. This helps ensure that effectivecommunications and training are in place, leading to asmooth transition to Ceridian’s HR services. Accordingto Reschke, the best-practices framework “has materiallysped up the whole process we have with transitioningthe customer to services. The discussions are muchmore focused, and we are much less likely to discover arequirement that we didn’t know about that causes us togo back and make changes.”In evaluating its customers’ unmet needs,Ceridian realized that anything that requiredmanual intervention on the part of thecustomers created the potential for errors,delays, redundancy, and confusion inobtaining the benefits from its service.By better understanding critical customer outcomesfor outsourcing human resources, Ceridian has beenable to materially improve its service reliability andcustomer satisfaction at critical touch points in theoutsourcing service relationship. As a result, Ceridian’sNet Promoter scores from clients who have used itsimproved offerings have risen 27 percent. In addition,variation in customer outcomes, as measured by keyservice performance metrics, has been reduced amongthose customers by 50 percent.After understanding customers’ concerns regardingdata movement, Ceridian found ways not only to helpcustomers reduce their workload but also to improvethe reliability of its own service. Prior to the study, itsmethod was to gather details on data movement foreach outsourcing engagement—a very labor-intensiveand error-prone process. Now, Ceridian relies on a setof automated tools it has developed that put data intothe right format for client systems and move data frompoint A to point B, so it is where the client needs it tobe—all on a routine basis. This solution makes a worldof difference to Ceridian’s customers, who count ontimeliness and reliability in such outsourced tasks asdisbursing employee paychecks.Service Delivery Innovation at Ceridian4

Case StudyCeridian“Strategyn’s outcome-driven methods for identifying and prioritizingcustomer needs provide an efficient and effective guide to serviceinnovation.”—Lance Reschke, Vice President of Human Resource Outsourcing, CeridianLearn MoreStrategyn is an innovation consulting firm specializingin the management of innovation. To learn howto make Strategyn’s Outcome-Driven Innovationmethodology the cornerstone of your company’scorporate innovation efforts, visit that explain the details behind Strategyn’smethodology include: Anthony Ulwick, What is Outcome-Driven Innovation?,(White paper, March 2009). Anthony W. Ulwick, Turn Customer Input into Innovation,Harvard Business Review 80, No. 1 (January 2002).ContactsUnited StatesTony UlwickCEO & [email protected] 1 415 787 2706France & ItalyMaurizio BeltramiManaging [email protected] 41 79 596 34 27EuropePetr SalzDirector of [email protected] 31 0 40 2261800Germany, Austria,SwitzerlandMartin PatteraManaging [email protected] 43 7472 65510 121 Anthony W. Ulwick, What Customers Want, (New York:McGraw-Hill, 2005). Anthony W. Ulwick and Lance Bettencourt, GivingCustomers a Fair Hearing, MIT Sloan ManagementReview 49, No. 3 (Spring 2008). Lance Bettencourt and Anthony W. Ulwick, TheCustomer-Centered Innovation Map, Harvard BusinessReview 86, No. 5 (May 2008). Lance Bettencourt, PhD, Service Innovation: How to GoFrom Customer Needs to Breakthrough Services, (NewYork: McGraw-Hill, 2010).Accelerated growth. Delivered. Strategyn & Outcome-Driven Innovation are covered by U.S. and other foreign registered trademarks of Strategyn Holdings LLC. The Outcome DrivenInnovation Process is covered by many issued and pending U.S. patents.Service Delivery Innovation at Ceridian5

Service Delivery Innovation at Ceridian 2 Case Study Ceridian Satisfaction Importance The opportunity landscape revealed a number of areas in which HR executives felt underserved. Guided by this strategic insight, Ceridian introduced service delivery innovations that have helped establish it as the provider of "the best care in the industry."