Interview with Rick Roscitt, Managing Partner–Outsourcing Practice | Article

AT&T Logo“Our philosophy is different.† At AT&T Solutions, we seek relationships where we become a virtual extension of the client’s operation.”

On Where Outsourcing is Heading

It’s a growth industry that has not yet hit its stride. For instance, in the IT and customer care field, the breadth of what firms are now considering and are in fact outsourcing has grown so dramatically over the last year that it has become an accepted business style. And this is moving the industry toward more specialization. It’s hard for any one firm to cover the entire landscape well. That’s why AT&T Solutions specializes in Networking-centric outsourcing. As businesses start to realize there’s more to survival and thriving globally than just reducing costs, they deploy their IT infrastructure in a more business-connected way. Contracts that are only financial transactions don’t match well with the business strategy for growth. Because there is nothing in a cost reduction contract that will help a firm grow. I equate it to a value hierarchy. The bottom level is network management outsourcing. “Like for like for less” is what most of the outsourcing business operates in today. The next level is high performance advanced networking† designing advanced Networking-centric solutions that literally change the way clients operate. Transformational networking is the next level and focuses on applying the best technology to a client’s business and using that technology to make businesses more successful. With industry networking, existing relationships are recast within industry value chains, and value can also be created and/or transferred across industry players. At the top of the hierarchy is client-specific networking, which creates client-specific customized advanced networking solutions linked with business strategy and processes, so that full potential is unleashed. If you think about these levels, where the industry has been historically is trapped at the bottom of just an economic financial transaction. This simply doesn’t add enough value to most companies’ goals today.

On Types of Relationships

Our philosophy is different. At AT&T Solutions, we seek relationships where we become a virtual extension of the client’s operation. Our networking skills are joined with the client. We’ve partnered with Merrill Lynch, JP Morgan, Textron, United Healthcare, and Mastercard as a virtual extension of their corporation. We’re now part of each of those companies and bring our expertise to them as opposed to taking their MIPS and going somewhere else. It’s a very different paradigm.

On Growth

Networking is hot. Everything from desktops to LANs to the hardware, internet, intranet, software, glueware, to wide area to global networks, is an explosive growth area. G2 says it’s going to grow over 30% annually, which is 2-3 times the growth rate of traditional IT outsourcing.

On Moving Into This Arena

We have a Networking-centric strategy built around a virtual corporation concept† we are an extension of the client. That is in fact our mission and our charter. The fact that in 1996 we signed a staggering $3 billion in new contract business our first full year out† it’s obvious in the marketplace that this concept is well received. We’re going to continue down this road and turn up the volume and turn up the pace. But we’re not going to change our strategy or our approach, because we think it’s working and our clients are telling us they like it.

On Maintaining Smooth Relationships

AT&T Solutions adopts a “we attitude” in these relationships. The right outsourcing contract is a strategic relationship, almost like a merger/ acquisition activity. It takes a lot of hard work and communication to maintain a smooth relationship. And it starts with not seeing it as a client/supplier relationship, but a partner relationship.

On Considering Outsourcing

My first advice is to understand your reason for outsourcing. Is it just a financial transaction or are you seeking more? Is it for technology transformation, business or even industry-impacting transformation† part or all of that? Once you understand your objectives, you’re in a much better position to choose your partner. It is important that your goals and culture match with the company you’re forming a long-term relationship. Make sure you pick the right partner based on complex goals. People rush to an RFP mentality as if that’s going to sort out all the answers as opposed to thinking in through strategically up front.

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