Case study: regaining control of your outsourced relocation program

The trend toward fully outsourcing relocation is in full swing. Companies are increasingly relying on outsourced relocation specialists to manage everything from real estate to moving services to community orientations. As a result of a stronger economy, the number of people being transferred by their company increased about 15 percent in 2004, according to Cris Collie, Executive Vice President of Worldwide ERC. Companies, however, are outsourcing more of their relocation services for a variety of reasons other than sheer volume. Limited resources, global expansion, the increased complexity of relocation, higher demands of transferees, and HR professionals expanding into more strategic work involving human capital management have also contributed to this outsourcing trend. Outsourcing relocation gives HR access to relocation services while allowing them to focus their attention on more strategic issues.

Focusing attention on more strategic issues, however, does not mean giving up control over their relocation programs’ cost, quality, or efficiency. HR professionals continue to push to make the most efficient use of their resources. Driven by the pressure to control costs and increase productivity, many companies are evaluating their relocation programs and demanding more from relocation providers. At the same time, HR executives are demanding accountability. This case study shows how one major corporation regained control over its relocation program while continuing to take advantage of the many benefits of outsourcing.

The Challenge
3M’s relocation program was in the midst of dramatic change in 2004. As a global leader in innovation and product development, 3M has a very mobile work force—relocating more than 1,000 employees a year. Faced with a complicated relocation program, a change in third party providers, limited human resources, and a new set of corporate productivity initiatives, 3M relocation professionals were challenged to streamline relocation processes and tools while controlling costs, and increasing program productivity, efficiency, and measurability.

In order to comply with these new productivity initiatives, 3M relocation professionals had to regain control over their complex internal processes and multiple relocation service providers. They were faced with the challenge of increasing control and efficiency without increasing internal resources or cost. Although the corporate initiatives were clear, how to go about restructuring their relocation program to comply with these initiatives was not.

Program Evaluation and Solution Development
3M turned to its relocation service providers for help. Berger Management Solutions (BMS), a consulting division of Berger—one of 3M’s service providers of more than 30 years, was the only company that offered a solution. BMS recognized that no existing, off-the-shelf program would satisfy the unique challenges facing 3M and therefore proposed a collaborative approach between the two companies to develop a comprehensive tool that would allow 3M to efficiently manage their entire relocation program.

Although venturing into unknown territory, BMS committed to sharing its technology, relocation expertise, and innovative spirit in return for 3M’s commitment to openly share its current practices, preferences, and honest feedback throughout the process. 3M agreed to take part in the beta testing of the program and granted BMS full access to their entire relocation process.

“As relocation consultants,” said John Allen of BMS, “we knew the design phase would be the most difficult part of implementing a solution. 3M needed a tool that could integrate their supplier network and allow them to easily manage their entire relocation program without increasing human resources. We knew we had the technology and resources to develop such a program, we just had a lot of work ahead of us to define a solution that would best fit the evolving needs of the client.” In collaboration with 3M, BMS consultants began their quest to restructure 3M’s relocation program by interviewing numerous executives, department managers, and front-line employees. In order to create a successful program, they needed to have a solid understanding of 3M’s current practices and expectations. 3M’s current services providers were also interviewed since integrating 3M’s supplier network was critical to the new program’s overall success.

After an extensive evaluation of 3M’s current practices, 3M and BMS identified three key areas that were preventing 3M from regaining control over its program and increasing its efficiencies:

1) A series of inconsistent, paper-intensive processes
2) A lack of data management and reporting
3) An inconsistent and incomplete performance measurement process

Equipped with a comprehensive understanding of these obstacles, BMS approached 3M to discuss solution possibilities and implementation. Their key initiatives were to replace inconsistent and paper-intensive processes—such as relocation initiation, authorization and vendor notification—with a web-based process, develop a single reporting platform that would allow easy access to consistent and accurate data, integrate 3M’s supplier network, and develop a performance measurement tool that would easily and consistently measure the performance of all service providers.

The Solution
BMS, in collaboration with 3M, created a solution that exceeded their expectations: a comprehensive, web-based, single-entry data management tool. This new online tool, called Alera, streamlines the processes of initiating and authorizing employee relocations within the U.S. and accurately and consistently measures program efficiency, cost, and quality.

Alera provides an automated workflow that moves the relocation process through all of the required steps, from initiation and authorization to post-relocation reports and electronic invoicing. According to 3M, “the tool is easy to use, saves time, and provides a more secure system for transmitting personal and confidential information.” Alera generates emails to notify the hiring manager, transferring employee, and vice president when their action is required, and enables hiring managers and transferring employees to check on the status of their authorization at any time. It also provides timely and accurate notifications to vendors who support the relocation process. Most importantly, however, this new tool enables HR to collect and track data that will help identify future process and policy improvements.

The once inconsistent and paper-intensive initiation and authorization processes now consist of simply logging onto a custom-designed, secure website and completing a relocation initiation process in approximately two minutes. Greater speed and accuracy of data entry are also realized as much of the data is automatically populated. Once the form is complete, the initiator issues an electronic request to the appropriate executive(s) for authorization. Doug Oglesby of 3M called the new process “slick!” after having seven initiations authorized within 48 hours. The new initiation and authorization process also streamlined the vendor notification process by combining these once separate processes into one. Once a relocation is approved, the hiring manager issues an electronic authorization. At this point, Alera instantaneously notifies all the appropriate service providers, and the relocating employee, to proceed with their specific relocation services. Angela Lalor of 3M said the enhanced relocation approval process “worked wonderfully,” taking only 15 seconds to complete and receive an actual cost estimate. Status updates can also be tracked by all parties involved at any time by accessing the site. In addition, Alera’s electronic invoicing and auditing replaced paper-intensive invoicing and hand auditing.

Alera also provides an integrated source to report on the total overall cost and performance of the entire program. Reports that were once inconsistent and slow-to-receive are now consistent, current, and available upon demand, allowing for quick and easy management and reporting on relocation activity.

Alera provided 3M with a much-needed performance measurement tool. Alera’s satisfaction survey process provides consistent, objective, and timely measurement of the transferees’ total relocation experience by measuring the quality of services across all service providers. This survey process is especially unique because electronic satisfaction surveys are automatically sent to employees 72 hours after the final delivery. Therefore, neither 3M nor service providers need to do anything to initiate the survey process. Alera’s performance management tool has an unprecedented 80% response rate which allows 3M more control over the level of service its transferees receive.

One of the benefits that came out of the development process was the unification of 3M’s service providers. Since the service providers were closely involved with BMS during the discovery and design phase, BMS was able to successfully address each of their concerns. Service providers now receive timely and accurate initiations specific to their vendor profile. In addition, they have the ability to access reports and data that affect their portion of the relocation, verify orders, review changes within 3M’s corporate structure, receive electronic initiation updates, access individual performance reports, and receive electronic payments.

The relocating employees have also benefited from Alera. Employees are electronically notified immediately once their relocation is approved and are provided with important information regarding their upcoming relocation. They are given access to their own password-protected “Moving Page” that includes the status of their move, moving policies, important service provider information, and a variety of helpful moving tools and tips. This page provides employees with a convenient, one-stop resource that can be accessed from any computer throughout the entire relocation process.

Why the Solution was a Success
The BMS tool was a success largely because BMS encouraged 3M to participate in the development and implementation of the tool from the onset of its development. “It isn’t necessarily the tool itself,” according to John Allen of BMS, “but rather the process of development and implementation that made this solution a success.” Each area of concern was thoroughly assessed and an efficient solution was collaboratively developed based on the needs of 3M employees—each part of the design phase was a group effort.

In the end, 3M regained control over their relocation program and gained the ability to efficiently manage their entire domestic relocation program without incurring additional cost or increasing internal resources. The program’s efficiency surpassed even the highest of expectations—enabling a small core group of employees to oversee and manage a multimillion dollar relocation program.

BMS is pleased to have been a part of this process with 3M. The innovative and successful development of the Alera program has allowed BMS to provide previously unavailable solutions to clients with similar challenges. As an off-the-shelf program, Alera has been successfully duplicated and implemented in other corporate relocation programs.

The crux of this case study, however, is not necessarily the tool itself, but to understand that outsourcing a relocation program does not mean giving up control over its quality, efficiency, and cost. Although it can be temping to allow your third party provider to manage all aspects of your relocation program, especially since the suite of offerings is expanding during this outsourcing trend, it can be beneficial to stay apprised of your programs’ efficiencies and quality and hold your providers accountable.

Alera paved the way for other “e-productivity” initiatives at 3M and was the first step in a global plan, supporting 3M’s Global Business Process initiative, to streamline and standardize processes and tools for all 3M relocation services. The tool is constantly evolving to meet the ever-changing and expanding relocation needs of 3M, and 3M is excited to phase in process enhancements throughout the world. In fact, BMS is once again engaged with 3M in developing a global application.