Business Case for Procurement and HR Collaboration

28 Apr 2014
by Rajesh Ranjan



In the current, challenging economic environment, taking an integrated Human Resource Outsourcing (HRO) and Procurement Outsourcing (PO) approach can reap significant benefits. An integrated approach to HRO and PO can ensure that the operational expertise on the HR side is effectively combined with the sourcing and vendor management expertise on the procurement side to unlock the full value of outsourcing. However, there are organizational, operational, and technological challenges that the companies need to manage while pursuing an integrated approach.

To illustrate the benefits of an integrated approach, Everest Group took a deep dive into two HR processes where an integrated HRO+PO approach has significant potential – learning and recruitment:

  • An integrated Learning Service Outsourcing (LSO) and PO approach can nearly double the savings potential of traditional LSO. Further, the payback period of the outsourcing contract reduces by 25 to 30% with an integrated approach
  • While an independent RPO and MSP approach can result in savings of around 10% on the overall recruitment budget, an integrated RPO+MSP approach can lead to further improvement in savings by 20 to 30%

Savings Potential


The objective of this study is to develop a robust framework and analysis to demonstrate the value-creation potential of an integrated HRO+PO approach. This enables buyers to make an informed decision while pursuing outsourcing-related initiatives linked to HR and procurement. The key themes covered in this research are:

  • Business needs and challenges for an integrated HRO+PO approach
  • Illustrating benefits of an integrated HRO+PO approach
  • Key considerations for pursuing an integrated HRO+PO approach

Page Count: 51