John Fretwell had a problem. His company, ING Baring Securities (Hong Kong) Limited, needed to improve the quality of service provided through their whole organization, as part of a fast track upgrade program for their equity business. Existing support services were being provided through various organizations and structures in different parts of the environment, and that wasn’t going to work any longer.
ING Baring Securities, part of the global ING Baring Bank, deals with trade settlements and provides derivatives to financial companies. The company takes advantage of changes in the market conditions, so all service functions have to react quickly. The user base is extremely demanding, and all problems received are critical. Those factors add complexity to the delivery of help desk services.
“We wanted to centralize,” said Fretwell, chief information officer, Asia, “and we needed to do it fast. We looked at various ways to do that.”
Considering the Options
The company considered external recruitment and training of a new team, making changes in the existing internal resource, and outsourcing. Outsourcing, they decided, was the fastest way to bring in the experienced personnel they needed. “An outsourcer could recruit people who are trained,” said Fretwell.
ING Barings selected Digital (now Compaq) as their vendor, based primarily on the supplier’s ability to provide the right people and on their flexibility. The original agreement reached two years ago was to provide help desk applications support in Hong Kong. The relationship has expanded to include provision of those services in Japan and Singapore, as well as operations management services, firewall and security and computer maintenance and support services, as needed, in each location. The additional agreements, according to Fretwell, evolved from Compaq’s initial success in providing help desk support in Hong Kong.
“One of the reasons for rolling out in slow stages was for us to get an understanding and appreciation of outsourcing, how the vendor/client relationship would work,” said Fretwell. “That has enabled us to really enhance the program each time, before we rolled it out to outsource.”
Flexibility — An All-Important Factor
A key factor in vendor selection was flexibility. “We found they were an organization who were very open to adopting some of our own styles and working with us to project our own culture, rather than bringing a fixed solution,” said Fretwell. “We had our existing security policies and methodologies of working that we needed to maintain. We didn’t want this to be a huge culture shock for our own internal staff.”
The company also had concerns about the impact of outsourcing and what it would mean to internal functions. “We clearly wanted to demonstrate that outsourcing wasn’t going to change any existing business roles,” said Fretwell. “If anything, it was going to enhance career opportunities.”
For two years now, ING Barings and Compaq have maintained a good working relationship. Part of that success may lie in the steps the customer took initially. They identified the services they wanted, including what was expected from the first day and what they expected to occur over the first six months or one year. They specified that their existing security procedures would not be compromised. In fact, the outsourcing group still does not have access to certain elements of the network.
“Digital/Compaq was flexible enough to adapt to that,” said Fretwell. “This is a partnership. Unless Digital/Compaq were in a position to adopt our methodologies, the structure wasn’t going to work.”
Meeting the Challenges
The main challenge facing the relationship was acceptance on two fronts. Users were accustomed to placing a phone call and having a support engineer appear at their desks. With the new system, they had to provide more information about the problem, so the correct team could be sent. Then there was the question of the internal staff learning to work with people who were not part of their own team. “The internal staff gaining the trust of the outsourcing group and the outsourcing group gaining the trust of the internal group was very important,” said Fretwell.
Another glitch was in management. Hindsight has shown Fretwell that the company did not build in enough internal management control in the beginning. “We were under the misapprehension, to a certain extent, that this was going to solve all our problems immediately,” he said. “We didn’t necessarily allocate the management for that function among our internal staff. That gave us some problems initially, and we had to make some changes there.”
There now exists a regular dialog between outsourcing and internal management groups, and all of the teams are located in the same building. The outsourcing team is made fully aware of the customer’s strategies, direction goals for achievement, and the drivers involved.
Another part of the learning curve has been understanding that solutions in one location cannot be moved across countries without some adaptation. The solutions must accommodate the cultures and working practices of the company where they are implemented.
Preparing for Success
Fretwell said that any executive considering outsourcing should be aware that it is not the solution to all problems. “You have to work very hard internally to make outsourcing work,” he said. “You need to be very sure what the problems are that you’re trying to overcome with outsourcing and to be clear on what metrics and measurements you are using to assess whether you’ve been successful in outsourcing.”
He paints a rosy future for global outsourcing.†
“It has huge potential as the market for IT staff becomes tighter ” said Fretwell. “As technology changes at a faster pace, you need to have a flexible organization that can accommodate that change, and outsourcing is far more flexible than an internal support staff.”
Lessons from the Outsourcing Primer:
- Outsourcing can deliver trained personnel quickly.
- Rolling outsourcing out in stages offers the opportunity to enhance the program.
- Flexibility is a major factor in creating partnership.
- Internal and end user acceptance can be a challenge in implementing an outsourcing program.
- Strong internal management is essential.