Ulrich very often is utilized to legitimate cost cuttings in HR but that is not what Ulrich meant. I have written already in my last post that Ulrichs foundation is in the resource-based view. The 2nd misinterpretationis to reduce Ulrich down to Shared Service Center only.
Concentrating only on Shared Service Centers in HR is a big mistake if not to say the worst you can do. And why? Easy answer: HR work does not only consist of transactional/ administrative tasks, but also (to use Ulrichs language) transformational tasks. And on a continuum of tasks, these are on the opposites. It is not possible to treat both in the same way.
Ulrich says and in that he is right: Transactional HR tasks are standardizable, exchangeable and non-differentiating. Still, they have to be delivered (or who wants to claim that although it is a standard process, payroll can be neglected ;)). But these activities are destined to be delivered through a Shared Service Center or through outsourcing.
Differentiating are transformational activities. With and through these, companies and the entire workforce can be formed, motivated and targeted in their day-to-day work. For Ulrich, these are the most important activities for HR, these are value leavers! And for those, Ulrich has foreseen the Centers of Expertise. They are the strategic and conceptual part of HR (core HR if you want). With its knowledge about the company and its functional expertise their mandate and job is to design and develop tools (meaning processes, services, etc.) that motivate the workforce and that make the whole workforce more efficient and effective. Of course, as soon as these tools are finalized, implementation and day-to-day servicing lies with HR Business Partners and the Shared Service Center – no question on that. But the transformational part lies with the CoEs.
Sometimes I hear from our clients that CoEs belong into the Service Center, but this interpretation of Ulrichs idea is wrong and honestly, not working. Why? The goals of both are diametric. I will talk about this in the next post in more detail.
Chief HR Officer 