partnering Archives

Strategic Defense

Outsourcing Center, Kathleen Goolsby, Senior Writer

With technology requirements aimed squarely at their weakest point, yet with a goal to be the government’s choice to build 21st-century destroyers, BIW made the strategic decision to outsource all of its IT operations to Computer Sciences Corporation (CSC). We felt CSC would be able to support us in our effort to achieve our goal of being a technology leader and could do it at the rate at which our customer would like to see it done. Bowie admits that BIW had blinders on when it outsourced in November 1996, not realizing the extent of technological advancement that would be required. The original contract spend was about $27 million, and it has now grown to include new services and a value of nearly $50 million over four years. Because its customer was driving certain initiatives, BIW found it needed new PCs for all employees so that they could do design work more efficiently and win more government contracts.

Feathering Each Other’s Nests

Outsourcing Center, Kathleen Goolsby, Senior Writer

Birds of a feather flock together aptly describes the beginnings of the outsourcing relationship between Commonwealth Bank of Australia and its supplier-partner, EDS Australia. Both organizations are huge, both are global, both are renowned for the top-notch services they provide for their customers, and both fly on the wings of innovation when it comes to business ventures. Commonwealth is Australia’s largest domestic financial services organization (largest domestic bank, largest funds manager, largest online stockbroker, and among the largest insurance companies). It has more than 10 million customers, more than 110,000 location points, 3000 ATMs, 120,000 point-of-sale terminals, Internet banking, online telephone banking; and its Web site handles more than 10% of the total trades on the Australian stock exchange on any given day. 1,400 Commonwealth employees transferred to EDS when the October 1997 contract was signed.

Cultivating a High Yield in Outsourcing

Outsourcing Center, Kathleen Goolsby, Senior Writer

The fourth largest steel company in the U.S., National Steel manufactures steel for the automotive, construction and tin container industries and has annual shipments of almost six million tons of flat rolled products. The company outsourced the housing and operation of its mainframe and data center services to IBM in November 1998 with a seven-year contract worth nearly $60 million. John Davis, CIO of National Steel, explains that they wanted to reallocate its human resources to solve National Steel problems, rather than technology problems. I wanted them working on solutions that would differentiate National Steel from other steel competitors, he says. The company has accomplished that and other goals, and their agreement has yielded far more than they asked for. But, after all, National Steel is no novice to outsourcing. In the 1980s, National Steel spun off its data center (which then became a part of ACS).

Digital Dilemma

Outsourcing Center, Kathleen Goolsby, Senior Writer

Without a doubt, today’s competitive forces have pushed the role and importance of customer relationship management up to the top rung of the ladder to success for organizations. As it is so vital, it has become a specialized area and an industry in itself. Thomson Consumer Electronics, which manufactures electronic products for the well-known brands of RCA, GE and Proscan, came to understand in the mid 1990s that customer care is a separate skill and a trade apart from manufacturing. We are in the manufacturing business. We wanted to develop a partnership with a company that had expertise in managing a customer care center and call center, recalls Scott Medawar, Manager of Customer Care Operations for Thomson. They began outsourcing these strategic functions to Spherion in 1997. Prior to their agreement, Thomson had operated its own call center and had a relationship with Norell to staff the center (Norell later became Spherion).

Getting a Handle on Purse Strings

Outsourcing Center, Kathleen Goolsby, Senior Writer

Because of its poor position with respect to costs (three years ago), the bank hired Peter Donald, an outsourcing veteran with noted success for the City of Melbourne. ANZ wanted him to identify outsourcing opportunities and to apply his prior successful principles in implementing outsourcing for the bank. Donald recalls that this departure from conservative thinking sparked internal challenges. Although the bank had decreed that something had to be done about its costing structure, there were degrees of tension among management when it came to identifying which opportunities might be selected. The opportunity identified was the bank’s procurement — its sourcing function — because it was not providing the level of strategic importance to the bank that was desired. We spend just under $1 billion Australian dollars per year in Australia and New Zealand (a total of about $1.5 billion worldwide) on a whole range of items from telecommunication to stationary, from technology to marketing and travel,

An Outsourcing Mutual Admiration Society

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

Joe Szmadzinski is a connoisseur of outsourcing contracts. Szmadzinski has negotiated and lived through 25 outsourcing contracts in the last three years as president of System Advisory Group in Southfield, Michigan, a firm that provides interim CIOs for major corporations like Budget Rent A Car….. (outsourcing)

Research & Insight

partnering

Strategic Defense

Feathering Each Other’s Nests

Cultivating a High Yield in Outsourcing

Digital Dilemma

An Outsourcing Mutual Admiration Society

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