There is always that sense of confidence that companies get when they have the AT&Ts and MCIs of the world as their supplier. Companies like big vendors because they have many resources at their disposal and through years of experience have gained a great deal of knowledge about the network infrastructure business. But as Jeff Winston, vice president of information technology at Allergan, Inc., looked at five or six communications vendors in early 1996, there wasn’t any objective data that pointed him away from Infonet, a smaller communications organization that at the time had an annual revenue of $300 million.
“The network was a strategic cornerstone of everything that we were going to do from an IT perspective, so we had to come up with the most solid solution that we could find,” Winston says. “And there were some people in the company that weren’t comfortable with Infonet because they aren’t that big, but I think that they are one of the better kept secrets in the industry.”
Working as Partners
Winston says that the two companies prefer to share a partnership relationship rather than a contract-driven arrangement. “I hear people say that it can’t be a partnership unless the partner fields some of the financial pain as you experience the ups and downs of the business. If that criteria is used, then it isn’t a partnership,” he says. “But the definition that I prefer to use is more of a pragmatic definition. We think of this particular vendor as an extension of our own in-house capabilities. We talk with them every day. We know them on a first name basis and there is a very interactive relationship going on.”
Allergan, a global health care company, wasn’t experiencing that type of relationship before Infonet stepped in. The Infonet network was a replacement for another vendor’s network that was not functioning well. When Allergan made a strategic decision to implement SAP on a global basis the company came to the realization that the network design and service that it was receiving at the time was not adequate.
After assessing the situation, Winston put an RFP on the street and that is how Infonet came into the picture. “We did a very arduous RFP process. We made half a dozen vendors really jump through hoops,” he says. “We not only prepared an extremely difficult RFP to answer, but we were extremely meticulous in our evaluation process, which took several months to complete. We really believe in due diligence, especially when you are not happy with your current vendor; you don’t want to make the same mistake twice. So we put together some very objective evaluation criteria, we assembled a small team of Allergan people to independently read all the proposals and to rate and rank the vendors in various categories–and every way that we cut the data, Infonet came out on top. They were not the least expensive, but cost wasn’t our number one priority.”
Providing a Solid Foundation
The goal of implementing a network infrastructure was to provide a solid foundation for Allergan’s global distributed computing infrastructure. And one of the things that has impressed Winston the most is the degree of focus that Infonet had towards Allergan’s business. The company wasn’t looking for just frame services, it was looking for managed network service, which implies that it didn’t want to own the network, manage it, or repair it.
“Our use of the network has mushroomed,” he says. “The level of data traffic has increased significantly, so there has been this constant renewing over time. Now we are looking at some newer technology network services that Infonet has brought to the table and we are seeing if we can take advantage of that as we move forward.”
Some of what Infonet does is connect to new sites while it improves others existing locations by doing things like increasing the line’s bandwidth. Right now there are about 50 sites that span 25 countries, so it is a truly a global network. “Some of those locations are fairly far from major metropolitan areas, so this isn’t necessarily a simple, straightforward procedure,” he says. “For example, we have a very large manufacturing plant on the western coast of Ireland. Although the Irish infrastructure is good, it certainly isn’t Dublin, where we have another facility. And we have facilities throughout Latin America, as well as Puerto Rico, which are also a challenge. But we work through all those issues.”
The contract is a 3-year agreement and it is coming up next year. The two sides are currently in discussions about where they should head on the technical side of the network, and some of the new offerings that Infonet is bringing to the table will offer reduced costs as well. But even though there are no service, quality or performance reasons that would make Allergan want to change vendors, it isn’t a given that Infonet will be back.
Overall Winston says that Allergan has a very high level of satisfaction with the services that Infonet provides and with the relationship itself. He adds that Infonet is in a very challenging business. So when Allergan evaluates a global network provider that does end-to-end managed network services like Infonet does, it is important to look at them relative to other companies because there are certain things in the supply chain that are out of their control.
“There are local issues, which they can only influence because they do not control the last mile of infrastructure, so it becomes a question of ‘how do they deal with the issues’ and not necessarily an absolute measure of network availability,” he says. “You have to look at the situation relative to other providers and I think that Infonet does a wonderful job. But still, we entered this negotiation just like we would enter any other one. Even though it is a partnership it is still a business arrangement–so everybody has to keep their pencils nice and sharp.”
Lessons From the Outsourcing Primer:
- Some people contend that two companies aren’t involved in a partnership unless the partner fields some of the financial pain together.
- Others feel that a partnership exists when the vendor is an extension of the client’s own in-house capabilities.