Contract Archives

Collective Behavior

Outsourcing Center, Kathleen Goolsby, Senior Writer

Believe it or not, before the launch of Windows 95, the ledgers of Microsoft’s European entity, based in Ireland, looked dreadful. Mark Creighton, EMEA Credit and Collections Manager for Microsoft European Operations Centre, says the company decided to bring someone on board to clean it up before the launch of the new Windows product. French & Associates knocked on the door at just that time and was given the task. Their fee was based on a percentage of what they managed to collect, and Creighton (who was at that time part of the French team) recalls that it was far more successful than we ever had imagined.

Downtime Detour

Outsourcing Center, Kathleen Goolsby, Senior Writer

Imagine that you own a retail gas store and the cash register goes down. You can’t sell gas or Twinkies. Now imagine, just for a moment, that you own over 1700 retail gas stores where this could happen. ARCO, a West Coast gasoline refiner and retailer, actually owns that many gas stores and a large convenience store network. Downtime can be disastrous, so ARCO outsourced its point-of-sale terminals to outsourcer, Getronics. When the Getronics help desk receives a call from one of the retail outlets, the staff diagnoses whether the fix will require a technician. If so, they must obtain the needed part from a depot, dispatch a technician to the site to install the part, and have it up and running within four hours from the time the call was placed — no matter how remote the location might be. It’s truly an extraordinary feat in logistics.

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.

Special Recognition For Outstanding Service

Outsourcing Center, Kathleen Goolsby, Senior Writer

Johnson & Johnson, the largest and most diversified healthcare company in the world. Deutsche Bank, one of the world’s leading investment banks. Boeing Company, a leader in the aerospace industry. Glaxo Wellcome, Inc., a leading research pharmaceutical firm. Rohm and Haas, a specialty chemical company. BP Amoco. Nokia. CNA Insurance. And PSEG, an electric and gas holding company in 13 countries. The roster of satisfied customers of outsourcer, Hewitt Associates, is a Who’s Who of leading world-class companies. Each of those companies recognizes the role their employees play in making their companies successful. They also recognize that their ability to recruit and retain high-caliber employees depends heavily on the benefits programs and quality of human resources services extended to employees.

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).

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.

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,

CRM Becomes A Star At ENSTAR

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

The I Love You virus did very unloving things to the computers of email readers who couldn’t resist opening the infected note. The malicious message did billions of dollars of damage. And an avalanche of email messages brought down Yahoo in a DDOS (distributed denial of service) attack. These high profile events made companies realize the Internet is full of lurkers and some of them are evil people.

Outsourcing is Taking Three Forks

Outsourcing Center, Kathleen Goolsby, Senior Writer

Traditionally, outsourcing has been IT oriented. Today, however, outsourcing is taking three different paths. I see outsourcing falling into three distinct categories: the traditional IT suppliers,† the application service providers (ASP), and the business process outsourcing (BPO) suppliers. Different currents are buffeting each sector. Historically, IBM, EDS and CSCformed the top tier of the IT …

Research & Insight

Contract

Collective Behavior

Downtime Detour

Strategic Defense

Cultivating a High Yield in Outsourcing

Magnificent Medicaid Management

Digital Dilemma

CRM Becomes A Star At ENSTAR

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