Can you use a balanced scorecard in an outsourcing deal?
Leonard White
Dear Expert: Question: Can you use a balanced scorecard in an outsourcing deal? Answer: Leonard White, Everest Group.
Research & Insight
Service Level Agreement (SLA)
Virginia COMPETEs for the Common Good
Chris Pryer, Business Writer
Government Competes with Private Sector on Level Playing Field Today, as local and state governments struggle to provide services to an ever-growing, ever-demanding public despite inadequate financial resources, outsourcing and privatization of government functions is becoming more and more of an issue. Taxpayers expect their governments to deliver products and services commensurate — at least in their own minds — with what they pay in taxes. In the Commonwealth of Virginia, a unique organization works to ensure its citizens get the most for their tax dollars. The 15-person Commonwealth Competition Council, created by the Virginia Legislature as part of the Virginia Competition Act of 1995, is proving that there is a better and less costly way to serve its citizens. The Competition Council, whose members hail from government, academia and the private sector, was mandated to research and recommend ways in which state government can reduce the size and scope of its activity, as well as investigate h
From Hamstrung to Power
Outsourcing Center, Kathleen Goolsby, Senior Writer
Italy — its name brings to mind the pungent parmesan and garlic odors, magnificent golden treasures in the cathedrals and palaces, crowded canals of Venice and mysteries of Pompeii. The nation holds many charms for tourists. Part of the culture of this historic land is endurance and pride. Those characteristics carry over into the business arena. There are people who created their businesses from nothing, and they have worked all their lives in those businesses. They are not open to change, says Stefano Valentini, an outsourcing consultant in Rome. He explains that Italy has a lot of small (under 50 employees) and medium (under 250) companies and that 80% of production comes from these companies. Although many executives even in the United States are just coming to grips with it, the fact is that a company can’t be good at doing everything. An attitude of mistrust and not wanting to let go of control of business processes only results in being hamstrung — as crippling as cutting the tendons at the ham
ASPs Hit the Wireless Bull’s Eye
Outsourcing Center, Kathleen Goolsby, Senior Writer
Our mission at the Outsourcing Center is to promote outsourcing to be the first choice in strategic tools to use in achieving business objectives. One of the best ways to do that is to present to you illustrations of excellence in outsourcing, thus showing the value and benefits that can be accomplished. Of the many fine relationships we encounter, the best become recipients of our annual Editor’s Choice Awards. In this very popular annual awards issue of the Outsourcing Journal, we relate their stories so that you may duplicate their successes.
SLAs That Work
Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer
Service level agreements (SLA) are crucial to ASP buyers. SLAs create structure for the relationship and help both parties measure performance. But how do you write an SLA? How do you monitor them? Who is responsible for managing the SLAs?
First Aid for HR
Outsourcing Center, Kathleen Goolsby, Senior Writer
Johnson & Johnson is the largest and most diversified healthcare company in the world. It manufactures world-renowned health care products and provides related services to consumers and pharmaceutical markets, selling products in more than 175 countries. With more than 190 operating companies in 51 nations, the company has more than 99,000 employees worldwide. It’s a human resources migraine, to be sure!
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.
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.