Cost Reduction & Avoidance Archives

Outsourcing in Uncertain Times

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

Corporate layoffs command the headlines. Inflation numbers are jumping up and the NASDAQ index is diving down. Yet some industries still can’t find enough people to meet their growing orders. Are we heading toward the locust years or new boom? While economists are debating the answer, businesses have to decide what to do. Should they hire more people to be ready for a surge? Or should they lay off staff to stay lean and mean in preparation for the hard times ahead? Decisions today can affect the bottom line tomorrow. But one thing is clear in the cloudy horizon: Outsourcing is one of the best tools to deal with change in uncertain times, says Michel Janssen, chief operating officer of Outsourcing Center in Dallas, Texas.

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.

Magnificent Medicaid Management

Outsourcing Center, Kathleen Goolsby, Senior Writer

Medicaid is one of the most controversial, complicated and expensive programs in U.S. government. It’s very political, so there is a high level of interest, and there is also a lot of change going on in it all the time, says Peggy Bartels, Administrator of the State of Wisconsin’s Division of Health Care Financing. So any entity that provides outsourcing for Medicaid is going to be in a fishbowl environment. It’s very difficult. She explains that the process of reviewing and making determinations about whether or not Medicaid will fund services is all done under the very close supervision and administration of the State. Decisions are controversial. By being our business partner, the outsourcer invites the same criticism we receive, she adds. They’re in the bull’s eye, and it is a big challenge to do that kind of work and maintain a positive presence. Nevertheless, EDS took the challenge and has been the Medicaid fiscal agent in the State of Wisconsin since their outsourcing agreement began in 1977.

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,

IT Vendor as Change Agent

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

Buyers are interested in transformation, says Joe Ragusa, vice president, Transformational Outsourcing for IBM Global Services, based in Somers, New York. They see outsourcing vendors as change agents who can provide the skills, processes and technology they need to enter the brave new economy. IT is enabling, adds Ragusa. The Web has created some strange bedfellows. Heated competitors are now working together in business-to-business (B2B) exchanges…

Big Companies Embrace Multi-Process BPO

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

The trend to outsource non-core business processes is ‘irreversible,’ says John Barnsley, global leader for Business Process Outsourcing for PricewaterhouseCoopers (PwC), and is steadily moving to include multiple activities. Barnsley attributes an overall increase in acceptance of BPO as an important strategic tool to the rapid transformation in technology. Constant change, accelerated by the Internet, has altered companies’ risk equations.

A Global Objective – Profitability and Efficiency

Chris Pryer, Business Writer

With the global business climate changing, and shrinking somewhat due to the Internet, business process outsourcers (BPO) such as Raytheon Training find themselves filling in a vacuum.

Giving IT Capabilities Some Real Structure

Steve Gust

As a vendor, (i)Structure is gaining some real momentum in the information technology field. Lots of companies are starting to put faith, and more importantly contracts with the business, a subsidiary of Level 3 communication. Its services are being used by the Bradford Exchange, Vlassic Foods Int. and most recently Corporate Express Inc., a world office supplier with 400 facilities and 15,000 employees…….(outsourcing)

Outsourcing’s Little Dipper

Outsourcing Center, Kathleen Goolsby, Senior Writer

Ancient navigators found their way by following the Little Dipper. The constellation’s polestar, Polaris, always conspicuous and very near the north celestial pole, was used as a guide in traveling the seas. Outsourcing, often undertaken by buyers who have no prior experience navigating the depths of this intricate business relationship model, can end up in a shipwreck. Ted Williams, Vice President of Business Development for Compass America, reminds companies considering embarking on an outsourcing journey to make sure they are well represented by a neutral third party. Outsourcers write a lot more contracts than buyers. They are better at it than you are, he says……..

Hatching An Application

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

Outsourcing may turn out to be the golden egg for Commtouch. Since every youth in Israel must serve in the Army, which relies on sophisticated military intelligence and technology to survive, Israel has a wealth of technically skilled young people.

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