Unisys’ has the ability to implement and operate an entire IT (Information technology) process, but it also has the skills to provide expertise in the smaller functions within the operation. Mainframe services is one of several niches that Unisys provides its customers that prefer to selectively outsource, as an option to total outsourcing. And though deals like this don’t often grab headlines, Unisys doesn’t look at these tasks as any less important.
New Holland is one of Unisys’ clients that prefer the selective outsourcing route. New Holland is a manufacturer of agricultural and industrial equipment. It has 19,200 employees in 24 countries and in fiscal year 1998 made about $5 billion in revenue. Unisys provides mainframe computer operations to New Holland’s North American units. Though Unisys provides the mainframe operations, New Holland prefers to perform the rest of the IT functions with an in house staff.
“Part of our corporate philosophy is that we constantly evaluate ‘make versus buy decisions’ especially for our non-core business functions,” says Marlan Nolt, IT services provisions manager at New Holland. “We are not an IT company, our business is to design, manufacture and market agricultural and industrial equipment, so it makes sense to look at selective outsourcing.”
Unisys had quite a task on its hands when it took over the operation, Nolt says. New Holland had a very labor-intensive system, in which all of the scheduling was done manually. And as part of the mainframe operation, New Holland had about 30,000 round reel tapes. So, Unisys and New Holland worked together to develop a more efficient system.†
“We completed a migration from round reel to cartridge tapes, which greatly aided the operations process,” Nolt says. “And they automated our scheduling process, which was a big jump.”
New Holland and Unisys went from a manual paper schedule to an automated scheduler software package.† In other words, New Holland handed Unisys a paper schedule, whereby an operator followed manually released jobs and checked them off based on a piece of paper. Then a report was generated each night that sequenced what jobs had to be done. When Unisys came in, it implemented a software program that automated the schedule.
Nolt says having Unisys helps New Holland strategically because it allows them the ability to focus on other areas of IT and the business at hand. And over the long haul New Holland also expects an overall improvement in its IT performance.
“We give the service to a company like Unisys, where IT is their business and they should be able to provide an improved quality of service,” Nolt says.
Just recently, New Holland extended its contract with Unisys another thirty months, which more than anything is confirmation of results.
Reducing IT Costs
Koppers Industries is another manufacturer that came to Unisys with the need to run a more efficient mainframe. Koppers is a producer of carbon materials and chemicals, railroad and utility products, and commercial roofing supplies.
The 2,400 employee company was hoping to reduce its IT costs by outsourcing the mainframe function, which Joe Reeher, manager of computer operations at Koppers, says the company has been successful in doing. This is made possible because Unisys uses one of its service centers to provide the mainframe services; in this case the Unisys service center in Eagan, Minnesota. The service center in Eagan not only provides services to Koppers, but to many of Unisys’ clients. By leveraging the staff and the IT across a number of organizations, Unisys is able operate Koppers mainframe at a reduced cost. Mainframes is one of many functions and processes that Unisys can perform out of the service center along with end-to-end IT services, networks, applications, desktop, helpdesk, midrange outsourcing and others.
Reeher says that the transition to the service center went well. “They already had a machine in place when we transitioned,” he says. “All we had to do was back off our data, send the data to the service center, they loaded it on the machine that they had waiting for us, and then the data was brought up. First we did a trial run and then the following month we did it live. It all worked rather smoothly.”
An Exchange of Culture
The most challenging part of the transition according to Reeher was the culture exchange from Koppers to Unisys. Though Unisys has the ability to perform the operations at hand, Koppers had a systematic way it wanted to continue doing things after the function had been handed off, Reeher says.
So, to become familiar with the way Koppers did things, Unisys sent one of their operators to Koppers location for a month, in order to work with their IT people and learn their culture, he says.
“It’s nice to have someone come to our location and learn our business,” Reeher says. “We also have somebody that we can call on with questions about the operating system at anytime we run into a problem.”
Lessons From the Outsourcing Primer:
- Outsourcing can help companies strategically by giving them the ability to focus on other areas of IT and the business at hand.
- Outsourcers can improve the overall performance of IT functions.
- A challenging part of the transition is the culture exchange from the customer to the vendor. The vendor may have the ability to perform the function, but it must also learn how the client likes the function to be formed.