Vanguard had hit a red light: it had to declare Chapter 11 bankruptcy. The light changed to green when investors purchased its assets out of bankruptcy and outsourced its IT and IT-related business processes to Perot Systems, who cut its IT budget in half. Today Vanguard is driving in high gear and making money.
Hughes, America’s 15th largest ISP, outsourced a call center for inbound direct marketing. Today, half the company’s direct sales come from this outsourced relationship. Sales doubled while costs fell 30 percent. ACS turns 14 percent of these calls into sales, up from three percent. Increasing the conversion rate allows Hughes to do more marketing with the same dollars.
Editor Beth Ellyn Rosenthal, who conducted all the interviews, finds six recurring themes among the winners. The most surprising: offshoring actually created jobs for Americans.
The insurer’s sluggish processes and aging technology made it nearly impossible to introduce new products quickly. And its expense-to-premium ratio was 65 percent when the industry norm was closer to 20 percent. Outsourcing included a transformation. The result: In the last 18 months, Channel Life took on 450,000 new policies, four times the number of policies it had.
BT was a plain old phone company. Then competition and the Internet changed telecommunication. Where was BT going to find the capital to fund the requisite new offerings? BT outsourced its HR to Accenture. Together the partnership transformed BT.
One of the victims of September 11 was the airline industry. Delta had to service its call center customers at a lower cost. The solution was offshoring. That decision turned out to be a lifeline when hurricanes hit the US last year, shuttering some US call centers. Wipro routed extra calls to Mumbai and Pune, stretching its resources to support the airline in its time of need.
INVISTA, which owns brands like Lycra, had promised the industry an online fabric library. The CEO had sent letters to thousands of companies announcing the system would go live by October 4. In June it discovered its supplier was failing. It hired Freeborders, whose teams in the US, Europe, and China delivered the library three weeks early.
What do you do when the hospital has a fiscal crisis and can’t staunch the bleeding? Some suppliers would cut off the air supply when the money ran out. But not Eclipsys. It lowered its monthly fees until the hospital recovered, putting patient safety before profit.
Last year Citrix took a direct hit from Hurricane Wilma, shutting down the business for 15 days. But Citrix customers continued to receive their products because several Citrix employees set up shop in HP’s New Hampshire facility, the first time a customer actually moved in to run its business on HP’s systems.
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