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Best Practices in Offshore Outsourcing: Strategies for Transition, Attrition, Communication, and Bridging the Cultural Gap

Trend Report: Key Challenges in Implementing an Enterprise Master Data Management Program

The Strategy Infrastructure Connection for the Chicago Park District.

Learning from the Past

The Rise of Progressive Sourcing

Sourcing Management with Oblicore Guarantee^TM

"I respect them highly and I value the expertise that they bring. As an organization, they know their core business and they invest heavily in it. I think very highly of them as individuals and think they're just a first-class organization. We have very high standards within J&J, and I know we've jointly raised the bar on services delivered. The folks on our teams have responded to that and -- both our organizations have benefited from it."

- Eileen K. Palumbo, Director of Shared Service Benefits, Johnson & Johnson

L to R: Michael Winkler, Account Executive, Hewitt Associates Eugene McGough, Manager, Johnson & Johnson

Johnson & Johnson considered Hewitt as a potential business partner in 1993. At that time, Hewitt said their system functionality was not eady to deliver on what J&J expected from them. By 1999 their Total Benefit Administration (TBA) system was in place with the capability of being able to handle the complexities of the J&J benefit plans. "Hewitt came in and had really grown, and they offered what we needed from a technology standpoint," says Mrs. Palumbo. "The Hewitt system is wonderful; it's state-of-the-art."

Under the current contract Hewitt currently provides the following for approximately 50,000 to 70,000 J&J participants:

• Defined contribution,
• Defined benefit,
• Health and welfare outsourcing administration,
• Communication,

The Shared Strategic Imperative

One of J&J's strategic initiatives is Process Excellence (PE). J&J found Hewitt to have very high ethical standards, and a willingness to partner on joint PE projects. J&J and Hewitt meet annually to set shared/joint objectives specifically focused on continuous process improvements. J&J senior management and staff alike view the J&J/Hewitt relationship as a prime example of a successful joint partnership -- it has even been highlighted as premier/best in class within J&J. While many organizations would have simply handed over process improvement projects to the provider with a timeframe for completion, J&J and Hewitt partnered for successful implementation. Specific examples among the many joint PE projects are:

1. Repeat Callers/ Call Minute Reduction,
2. Retirement Experience,
3. Acquisitions,
4. DC Payments,
5. New Hire Process. and
6. Survivor Processing

J&J worked with Hewitt focusing on customer satisfaction. "One of our joint goals was call minute reduction without impacting customer satisfaction, and we did that with the Process Excellence projects that we had targeted at a number of different processes including the retirement event," states Palumbo. J&J credits process excellence, including the call minute reduction and reduction in repeat callers, with an overall reduction in call minutes without impacting our high levels of customer satisfaction.. The changes implemented on the retirement project were so successful, that Hewitt has now implemented them as a best practice.

Hewitt and J&J plan to work together this year on a process excellence project that gets further into retirement process. J&J and Hewitt partnered on a similar project with the new hire process, really "tore it apart and put it back together" in terms of communication and some new tools, and experienced a tremendous increase in satisfaction.

Although the contract doesn't define goals and objectives, J&J and Hewitt regularly conduct joint meetings to discuss goals and objectives and ensure the partners are in sync. Participants include the Vice-President of Worldwide Benefits, Vice President Business Services and the Benefit Services and Savings Plan departments within J&J. On the Corporate side, the Directors of Pension, Savings plan, and Health and Welfare are very active participants in the process as their input is critical for planning our resources and priorities for the upcoming year. And on the Hewitt side, participants are the entire management team: their Executive Consultants and their Managers on the Benefit Service Center side, as well as the Plan Mmanagement side. There are four Steering Committee meetings a year with the management team to talk strategic direction.

Shared Benefits

Johnson & Johnson and Hewitt are individually known for their customer focus and excellence and both partners believe the results of their partnership are unmatched in terms of quality and performance. The foundation upon which they have built the partnership is solid and includes a high degree of openness. Both intend to capitalize on that by bringing even greater value to both organizations.

J&J executives consider themselves out-of-the-box thinkers and have high standards that require 100% quality. The company expects, and receives, the same of its business partner, Hewitt Associates.

To recognize and celebrate our five year anniversary with Hewitt, we had a combined celebration which included inviting every Hewitt employee who worked on the implementation and/or who had been on the J&J team over the last five years. Hewitt "published a brochure celebrating our five years together. It laid out where we were back in 1999, and everything that we've done since then, and it speaks to everything we've done together," successes made possible as a result of the strong partnership between J&J and Hewitt.

Publish Date: June 2005

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