When you’re planning a project with the largest size and scale in the world, there can be no better strategy than outsourcing. That’s what GM did in order to eliminate risks and ensure success when it built mySocrates, the largest employee portal on the planet.
In support of lean manufacturing principles, GM decided to outsource to a third-party logistics supplier. The results were even beyond expectationss.
When GM realized it wasn’t making the best use of its enterprise marketing dollars and customer services, it came up with a unique strategy. But to ensure success in achieving enterprise-wide value, the strategy required outsourcing.
2000 was the year of the BPO mega deals. BPO deals are getting larger and we will see more of that, says Tom White, global managing partner for BPO outsourcing at Arthur Andersen (AA), a Big 5 accounting firm based in Chicago, Illinois. These outsourcing contracts ranged from $350 million to over $1 billion. And they were long range contracts, spanning a decade. The mega deals included: General Motors (GM) with Arthur Andersen BP Amoco with Exult, PricewaterhouseCoopers and Arthur Andersen Nortel with PricewaterhouseCoopers Bank of America with Exult White says AA’s contract with GM was unique because it was the first time a vendor concluded a finance and accounting contract that brought 17 different countries together in one shared services center. Employees at AA’s shared services center in Barcelona, Spain had to centralize the languages and cultures of those countries into a seamless BPO process.
If you want an outsourcing agreement to be beneficial for both sides, you have to start with a good contract. Great outsourcing contracts happen when you know exactly what you are trying to accomplish, says Bob Chaffin, director of contract management and finance for General Motors’ Information Systems and Services Division in Detroit, Michigan.