A Merger, a Consolidation and a Transformation: The Critical First Steps

By Outsourcing Center, Patti Putnicki, Business Writer

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A Merger, a Consolidation and a Transformation: The Critical First Steps

16th Annual Outsourcing Excellence Awards – Best ITO: Towers Watson and Dell Services 

“The biggest mistake companies make is picking a provider and then treating them like a vendor. You can hire the best company in the world, but if you don’t work with that provider as a team, you are going to fail.”John Dabek, Chief Technology Officer, Towers Watson

“It’s not where you start, it’s where you finish,” is a philosophy that works for some things. But, according to Towers Watson Chief Technology Officer John Dabek, when it comes to a massive transition, it’s the initial planning and change management that ensures you finish strong.

Today, Towers Watson is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company was formed in 2010 by the merger of Watson Wyatt and Towers Perrin, two formidable firms on their own. The result was a 14,000-employee powerhouse with a very intricate IT challenge ahead of it.

The data center models at the two merging companies were completely different, with a combination of outsourced and internally managed infrastructures. The goal was not simply consolidation–but a transformed operation.

“We didn’t want to push nine data centers into two. We wanted a transformation; to create a whole different model with standardized provisioning, the implementation of a Service Catalog, a multi-tiered storage model and high rates of virtualization,” Dabek explained.

As soon as company executives knew that the merger was forthcoming, Dabek and team began an “exhaustive” process and analysis to find the right transformation and managed services partner.

“We knew that it was critical to partner with the right people, so we involved key people in all roles throughout our selection process. We were going to be working together, so we had to find the right fit,” said Dabek. “I think a lot of companies look at outsourcing as a procurement exercise when it’s really far more personal than that.”

Ultimately, Towers Watson chose Dell Services as its partner.

“We saw our match in Dell Services. Their executive leadership made it clear that they were going to do everything that they could to make us successful. At the time, Dell had recently acquired Perot Systems, and what we were doing mirrored where Dell wanted to go as a company,” Dabek said. “We also were given an excellent Customer Executive who stays actively involved. If there’s an issue, he wrestles it to the ground.”

The Fine Art of Change Management

The Towers Watson IT leadership worked with the Dell Services team to jointly develop a business case and “Transform to Manage” implementation strategy designed to reduce IT spend by 40 percent while creating a more flexible, predictable IT infrastructure.  This strategy included the development of a new, highly standardized reference architecture that relied heavily on virtualization, standing up that infrastructure in two new data centers, transforming the existing platforms to this architecture and migrating the applications to the Dell-managed centers.

But, the success of a transformation of this magnitude isn’t based on technological skill alone.

“We had two companies coming together, a technology transformation and a tremendous amount of change happening. So, change management was key,” Dabek said. “As we laid out strategies, we involved stakeholders we provide services for as part of the process.”

Continual, honest communications with every party involved was also critical.

“You can’t communicate enough in a situation like this – you have to communicate and communicate again, even if it’s bad news,” Dabek said. “You have to invest time and money in the change model and embrace your internal stakeholders to create a real sense of team.”

That team concept extended to how Towers Watson works with Dell Services.

“The biggest mistake companies make is picking a provider and then treating them like a vendor. You can hire the best company in the world, but if you don’t work with that provider as a team, you are going to fail,” Dabek said. “Towers Watson was as critical to this project as Dell Services, but only if we worked as a single unit. You can’t create that kind of relationship if it’s ‘us’ and ‘them’.”

Go Big or Go Home

Towers Watson and Dell Services took a phased approach to the transformation, with the first actual migration involving the two Towers Perrin data centers, which were the most complex of the migrating operations.

“Although they were complex, these data centers were well-organized, as they had been outsourced with another provider and had been consolidated six years ago. Now, we were taking them to the next step with virtualization,” Dabek said.

This approach was a smart financial strategy as well.

“This migration provided the greatest synergies so, with the monies saved, we could fund the rest of the project,” Dabek said.

The transition happened over a period of weeks, pulling applications over in logical groupings. Not only did the migration happen with clockwork precision, it worked to further build trust among stakeholders and solidify the team.

“With that first transition, when people saw how non-disruptive it was and that our strategy was working, that was our defining moment,” Dabek said. “Everything fell into place from there.”

Great Expectations, Outstanding Results

Although orchestrating the subsequent transitions has been a continuum, with next-stage planning going on at the same time the current transition is taking place, Dabek believes it’s important to take a moment to celebrate the successes and do it as a team.

“It is rare that one assembles a team that accomplishes something of this magnitude. And in the process, these people get beaten down enough. It’s important to counterbalance that with a sense of success,” Dabek said.

After that first major milestone, all the key people from Dell Services, Towers Watson and others who contributed went out to dinner and celebrated as one.  The recognition of these shared victories continually strengthens the companies’ relationship, and, in many ways, fuels the desire to work a little harder.

“I think as a client, you have to remember the fact that people want to succeed. Everyone who works for your outsourcing provider wants to do a good job for you, so trust them to do it,” Dabek said. “If you expect great things of people, you’ll often get them. We’ve proven that here.”

About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, BPO, IT Outsourcing, and Cybersecurity Managed Services. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides valuable insights and guidance to buyers and managed services executives. Contact him at [email protected].

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