Research Outsourcing Payroll Tax Services Co Sourcing Help Desk Services

Pro Staffing Research for OutsourcingPayroll and Tax Services and Co-Sourcing

Help Desk Services

04/4/2014

Pro Staffing Procurement Research for Payroll and Tax Services and Co-Sourcing Hel Desk Page 2 of 20

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Pro Staffing Procurement Research for Payroll and Tax Service and Co-Sourcing Help Desk

Table of ContentsProject Scope........................................................4

Pro Staffing research of outsourcing business process.............5Advantages to Procurement for Payroll and Tax Responsibilities.....5

Advantages to Co-Sourcing Help Desk................................5Requirements for Payroll and Tax Responsibilities..................6

Requirements for Co-Sourcing Help Desk Services....................6Savings Analysis for Payroll and Tax Responsibilities..............7

Savings Analysis for Co-Sourcing Help Desk Services................8Procurement Disadvantages for Payroll and Tax Responsibilities.....9

Procurement Disadvantages for Co-Sourcing Help Desk................9Risks for Payroll and Tax Responsibilities.........................9

Risks for Co-Souring Help Desk.....................................9Scoring Matrix for Procurement Proposals.............................10

Contractual Analysis.................................................12Vendors the company will be accepting bids from for Payroll and Tax Services..........................................................12Vendors the company will be accepting bids from Co-Sourcing Help Desk Services.....................................................12Considerations....................................................12

Proposal Information..............................................12Legal Compliance Subjects.........................................12

Proposal Questionnaire............................................12 Eight weeks has been allocated for the

RFP………………………………………………………………… ……………..13

Instructions to Proposers.........................................14

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Project Scope The company considerations of outsourcing some of the internal functions to

other providers are being recommended. Starting outsourcing with an American

company for payroll and tax services which has been one of oldest and most

outsourced functions by companies will allow an introduce to create protocols

and gain experience in what is becoming a popular alternative to in-house

responsibilities. Companies have taken over an estimated 40% or more of

companies both large and small in managing company’s payroll and tax services.

(Marshall, Jones, 2013)

Help Desk co-sourcing is another well-established service and as we are

recommending OS and software not private internal applications the risks will

be minimal and the savings and improved skills sets added measurable.

Pro Staffing research of outsourcing business process1. Payroll and tax responsibilities will better meet the needs of

corporation in both cost and quality of services

2. Co-sourcing help desk support services

Applications in increasing expertise of hardware and OS

applications

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Not requiring expertise in internal specialized

Advantages to Procurement for Payroll and Tax Responsibilities The analysis shows the cost savings for the procurement of payroll and

tax responsibilities will be on average 31% less than in-house management

Risk/ liability for Federal Tax withholding and reports is moved to the

vendor.

Outsourcing will save in-house labor time

Cost savings versus in-house payroll specialists

Professional services include best practices regarding compliance with

payroll laws

Direct deposit of paychecks

Time-clock features to calculate the hours each employee worked during

each pay period

Refocus current employees on other tasks and projects

Taxes and other deductions can be calculated accurately for various

graphical regions especially when changes occur with access to experts in

taxes and other employee payroll deductions

Ensure that taxes will be paid on time

Advantages to Co-Sourcing Help Desk

Extending coverage time and geographic areas. Outsourcers can be used to

extend coverage when the help desk is closed. This would be especially

useful for mobile computer users and location-independent workers.

Outsourcers also can be used to cover satellite which could be scattered

across a wide geographic area

Working with outsourcers during the implementation of new technology can

be useful for moving the internal IS staff up the learning curve more

quickly and for providing additional labor resources. This will be

especially useful for wide-scale migrations that will require changes to

all aspects of the installed base, including hardware, operating systems

and applications

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Fixed Pricing and Lower Cost The need to hire new staff to provide a higher level of support is a thing of the past. An organization’s fixed costs are minimized substantially by hiring outsourced assistance; partnering with a support provider is far less expensive than hiring, retention and benefits costs associated with fulltime employees. Cash saved on personnel costs can be invested in other endeavors to further maximize company profits.

Requirements for Payroll and Tax ResponsibilitiesThe solution needs to provide minimal

1. Direct deposit or mail for employees and contractual workers

regular payroll, bonus pay, and expense checks

2. Handle workers compensation payment

3. Payroll withholding

4. Payroll tax management

5. Knowledge of international payments to employees or contractors

6. Online payroll management by Pro Staffing

7. Web access with required registration access for previous W2 and

payroll check information for up to five years

8. Documents should be printable or delivery by mail

9. Strict documented protocol for access to personnel information

either by web or mail

10. Provide a help support line

11. IRS form 941 filing (Quarterly Federal Tax Return) Testing

plan

12. Transition plan

Requirements for Co-Sourcing Help Desk Services

At this time the area identified are those not requiring expertise in

internal specialized

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Well understood day to day tasks that are well-understood, repetitive,

stable or slowly evolving, and nonstrategic

These services include hardware installation and maintenance, support

for legacy and upgrades to desktop applications, Microsoft asset

management, and software improvements

Provides support to end users on a variety of issues

Identifies, researches, and resolves technical problems

Responds to telephone calls, email and personnel requests for

technical support

Documents, tracks and monitors the problem to ensure a timely

resolution

Savings Analysis for Payroll and Tax ResponsibilitiesThe study is based on data collected from large organizations (each respondent

having 1,000 or more employees) utilizing ADP’s HR BPO services. 29% were “all-

service” ADP clients, meaning they outsourced payroll, time and attendance,

workforce administration, and health and welfare benefits administration.

67% utilized ADP time and attendance services;

42% used an ADP-hosted system as their HR system of record; and

38% outsourced their benefits administration to ADP

The size of the client companies that participated in the study are as follows:

10,000+ employees (25%)

5,000 to 9,999 employees (37%)

2,500 to 4,999 employees (17%)

1,000 to 2,499 employees (21%).

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Data from businesses perform payroll internally, “nearly one in four report

spending more than six hours per month on payroll. That's at least 72 hours per

year—nearly two full workweeks. If we use 2012 data from the Bureau of Labor

Statistics to assume the hourly cost for internal payroll staff to be $36,

these 72 hours translate into $2,592 per year.” (Jones, Marshall, 2013).

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Savings Analysis for Co-Sourcing Help Desk Services Average salary of help desk personnel 47,000 annually with benefits Co-Sourcing Help Desk the company can reduce the Help Desk staff by from

fifteen employees to ten

Saving for the next three years from fifteen employees to ten employeesfor a total of $729,962.88

HelpdeskAverageSalaryas 2014

2014 HelpDesk

SalaryTotal

3.5%Increase

2015

2015 HelpDeskSalaryTotal

3.5%Increase

2016

2016 HelpDeskSalaryTotal

In-House$47,000.

00$705,000.

00$24,675.

00$729,675.0

0$25,538.

63$755,213.6

3

Co-source$47,000.

00$470,000.

00$16,450.

00$486,450.0

0$17,025.

75$503,475.7

5

Annual Savings$235,000.

00$243,225.0

0$251,737.8

8Total Three Year Savings $729,962.88

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2014 Help Desk

Salar...

2015 Help Desk

Salar...

2016 Help Desk

Salar...

$0.00

$100,000.00

$200,000.00

$300,000.00

$400,000.00

$500,000.00

$600,000.00

$700,000.00

$800,000.00

In House Salaries

Salaries with Co-Sourcing

Savings

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Procurement Disadvantages for Payroll and Tax Responsibilities Less control including but not limited to late employee disbursements

Security threats (see risks below for more detail)

Some data may be less accessible

Procurement Disadvantages for Co-Sourcing Help DeskAs a result the quality of service can diminish making outsourcing more of a

burden than a benefit.

Policies, procedures and personnel issues between the internal help desk staff.

The company that is outsourcing their service functions should take care to

ensure that representatives for the outsource service provider are properly

trained to meet service expectations and that the training provided to those

representatives is effectively passed on to the help desk staff that is

actually providing the outsourced sales service and support to customers.

Before making the critical decision regarding whether or not to outsource help

desk activities an upfront analysis of help desk support processes expected

service levels customer expectations and costs of outsourcing should be

conducted.

Risks for Payroll and Tax ResponsibilitiesRisk of government reporting and employee withholding taxes are move to the

vendor

Major security risk by having another company having access to information such

as employee social security numbers and bank account numbers associated with

them as well as those associated with the business. It is very important to

investigate how this information is protected.

The company may consider other business areas for procurement in the future.

There are risks to outsourcing which can include but not limited to lower

levels of service, inferior quality outputs loss of control and adversely

affecting deadlines, cultural misalignment and exposure to other economic and

environmental factors. (Carlos Sanchez, 2010).

http://iveybusinessjournal.com/author/csanchez

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Risks for Co-Souring Help DeskHelp Desk service functions provided by another company will be out of the

company’s control entrusting the service provider with their support functions

can directly impact the company level of customer satisfaction and relatively

the company’s reputation also sales.

When contracting for outsourced services executives should be certain that

there are clauses in the contract that enable them to terminate the contract is

the service provided to their customers is substandard.

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Scoring Matrix for Procurement Proposals

CriteriaCriteria Weight Percentage

StandardsStandard Weight Percentage

Measurement

BasicRequiremen

ts

Mandatory reasons for exclusion N/A Pass/Fail

Discretionary reasons for exclusion N/A Pass/Fail

Insurance N/A Pass/Fail

Qualityand

Capabilitywith

existingsystems

40%

Delivery of Corporate Objectives 5% Quality

Completeness, robustness and systems interfacing approach

5% Quality

Compatibility with existing environment 10% Quality

Overall assessment 10% QualityAssessment of data protection and security 10% Quality

Delivery

20%

Quality, thoroughness and timeliness of implantation plan

5% Quality

Quality and comprehensiveness of acceptance schedule

5% Quality

Quality and comprehensiveness of training schedule

5% Quality

Assessment of short andlong term risked associated with delivery

5% Quality

LifetimeCosts

Cost associated with ownership including enhancements, upgrades and support

40% Price

Total 100% 100%

Scoring DefinitionsPass/Fail If the RFP fails to qualify corporate criteria the bid is eliminated.

Qualit The scoring will be in relevance to the specified criteria evaluation using

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y a 0 to 5 scheme.

PriceThe scoring will be based on price with the lowest bid be given 40% the rest will be in direct proportion of the price range of bids being evaluated.

The 0 - 5 Scoring Scheme0 Either no response was given or it was not relevant1 The response significantly fails to meet the standard requirement

2 The response fails to meet the standard requirement in a number of identifiable

3 The response meets the standard requirement but has some irregularities

4 The response meets the standard requirement but is lacking in some minor respects

5 The response meets the requirements and has a high probability to deliver the desired output and outcome.

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Pro Staffing Procurement Research for Payroll and TaxServices

Contractual AnalysisVendor selection was made for the top three in each category that had the largest customer base and were financial viable with proven track records of customer satisfaction .

Vendors the company will be accepting bids from for Payroll and Tax

Services1. ADP

2. Advantage Payroll Services

3. Payroll Benefits and Solutions

Vendors the company will be accepting bids from Co-Sourcing Help Desk

Services1. Alsbridge Limited

2. Dell

3. ACCO Technology

Considerations Fixed monthly cost

Cost per employee

Cost per transaction

Length of time period of the contract

Each party's renewal rights (Halvey)

What type of notice is required for renewal (Halvey)

Proposal InformationBidders need to address the questions below along with any additional

information that may be relevant and include a cover in submitting a Proposal.

Automatic Data Processing (ADP), Paychex, and Ceridian are being considered for

procurement companies.

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Legal Compliance Subjects1. List which countries the vendor bidder has worked with

2. Identify governmental requirements for transactions and due dates

3. Identify licenses or legal documents require and who will be

responsible for the costs

4. Identify how varying currency are handled

5. Auditing requirements

Proposal Questionnaire1. Cover letter of introduction.

2. Firm/professional history including how long you have been in

business

3. Professional qualifications and certifications

4. Strong customer portfolio

5.Financially stability

6. Technical Proposal in detail including the Proposer’s proposed

method of accomplishing tasks

7. Cost proposal

8. Detail documentation of how and where Pro Staff data is held and the

type of encryption used

9. Customer portfolio with client references with similar projects

10. Exceptions to Terms and Condition

11. Additional comments or final summary

12. Signed Proposal Certification

13. Pilot period

Eight weeks has been allocated for the RFP Ten business days: collecting responses to an RFI, identifying key

vendors and winnowing the list to a manageable number (i.e., two or

three)

Twenty days: collecting vendors' responses to an RFP

Ten days: deciding on a vendor and making the award

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Thirty days: awaiting delivery

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Instructions to Proposers

Proposals shall deliver a copy in Word and addressed and delivered

electronically to:

Pro Staffing

Attn: Julie Salin

123 Anywhere Drive

Somewhere, US 76242

1. Proposals received after the time for closing shall be returned to the

Proposer unopened.

2. Proposals shall be submitted in one hard copy produced using Word and

one electronic copy clearly labeled with the vendors name to

[email protected] .

3. Proposer may withdraw Proposals at any time during this process.

4. Pro Staffing will reserve the right to conduct discussions

including negotiations with vendors. Pro Staffing shall not disclose

any information including discussions from other vendors with other

bidders.

5. Proposers submitting Proposals may be requested to give an oral

presentation by the selection committee.

6. Proposals shall need to response to all items in the questionnaire

and signed or they may be rejected.

7. Pro Staffing reserves the right to reject any or all Proposals or any

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part thereof, or to accept any Proposal, and to waive or decline to

waive irregularities in any Proposal. Pro Staffing also reserves the

right to hold all Proposals for a period of ninety (90) days after

the opening date.

8. The successful Proposer shall be expected to enter into a standard

form of contract approved by both parties.

9. Prospective Proposers may submit requests for any changes to Pro

Staffing terms and conditions.

10. However, if Pro Staffing chooses not to accept the alternate

terms and conditions, GII may reject such Proposals as non-responsive.

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11. Confidential information may include, but is not limited to, trade

secrets, business plans, copyrights, logos, trademarks, financial and

operational information and membership lists. Both parties expressly

agree not to use or disclose such information in any manner or for

any purpose at any time during or after the effective term of this

Agreement, except as required by law or as required during the course

of the other’s work, unless authorized in writing by the other.

12.Contractor represents and warrants that it has no business,

professional, personal or other interest, including but not limited to

the representation of other clients, that would conflict in any manner

with the performance of its obligations under this Agreement.

13.Either party may terminate this Agreement, with or without cause, upon

thirty (30) days written notice to the other. Pro Staffing shall pay the

Contractor a pro rata share for services rendered up to the period at

which termination occurs but Pro Staffing not be obligated to make any

additional payment. Upon termination, the Contractor shall return all

unearned prepayments or deposits and deliver to Pro Staffing all Pro

Staffing information or materials that is in the Contractor’s possession

or control.

14. In addition, if the Contractor is convicted of any crime or

offense, fails or refuses to comply with the written terms of this

Agreement, and/or the policies or reasonable directive(s) of Pro Staffing,

is guilty of serious misconduct in connection with performance

hereunder, or materially breaches provisions of this Agreement,

GII at any time may terminate the engagement of the Contractor

immediately and without prior written notice to the Contractor.

15. During the term of this Agreement neither party will use or

disclose any confidential information.

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References

Sourcing Analytics Inc. (2103) “The Hidden Benefits of Human Resource Business Process

Outsourcing”

Retrieved from: www.sourcinganalytics.com/resources_hiddenbenefit.php

Sanchez, Carlos. (June 2010) “The Benefits and Risks of Knowledge Process Outsourcing”. Strategy

Retrieved from: http://iveybusinessjournal.com/topics/strategy/the-

benefits-and-risks-of-knowledge-process-outsourcing#.Uy_Wz41OVD8

Jones, Marshall (June 10, 2013). “Should You Keep Your Payroll In-house or Outsource It”.

The New Talent Times

Retrieved from: http://new-talent-times.softwareadvice.com/where-should-

payroll-live-0613

Halvey, John K. Business Process Outsourcing: Process, Strategies and Contracts, (2nd Ed). (p. 164) John Wiley & Sons P&T.

http://iveybusinessjournal.com/topics/strategy/the-benefits-and-risks-of-knowledge-process-outsourcing#.Uy_Wz41OVD8

http://iveybusinessjournal.com/topics/strategy/the-benefits-and-risks-of-knowledge-process-outsourcing#.Uy_Wz41OVD8

http://www.sourcinganalytics.com/resources_hiddenbenefit.php

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