In the mid 1990s, when the Internet was not yet prevalent throughout Europe, Mayor Andre Santini thought of his city not just as a suburb in France, or even a city in Europe. He envisioned it as a leader in a huge, fast-moving, high-tech world; and he began taking major strides toward that vision. When it comes to information technology, the Paris suburb, Issy-les-Moulineaux, is now the most advanced city in France - and it's getting a lot of attention around the world.
Upon an outsourcing arrangement negotiated in 1997 with the 10-year-old Paris-headquartered Euriware Group (one of the first IT outsourcing companies in France), Issy-les-Moulineaux became the first French city to outsource its entire IT infrastructure. Now it's an IT outsourcing services model recognized around the world. Alain Ribere, the city's IS director, reports they've been visited by representatives from Tel-Aviv, Israel, as well as such U.S. cities as Madison City, New Jersey; Seattle, Washington; and other local governments. The mayor is frequently contacted for information about this success and almost monthly speaks about the outsourcing relationship at conferences.
They outsourced, says Eric Legale, the city's IT Manager, because they wanted to "go very fast with the information technology evolution." That would require IT specialists most city governments cannot afford to hire or train. Mayor Santini had read about the U.K. Treasury's successful IT outsourcing and decided upon that strategy for his city.
Determining the Future
Ideas are powerful, but they require action and resources to make them reality. Issy-les-Moulineaux selected a provider with expertise and resources for "all the IT services you can imagine," says Ribere, but, more importantly, one that would partner with them on innovative IT projects. Together, they established an IT Services Strategy Planner as a proactive framework for focusing on "what can be done in a better way in the city." An important part of ensuring the city's objective of being "very inventive" and having the best in IT systems is the contractual bonus plan for performing beyond the service level specifications in five criteria, including new projects.
The results - such as a Web-enabled citizen-interaction function with the city council; or the "CommeVous" search engine on the city's Web site, which allows citizens to discover people who share the same interests; or the functionality to vote via the city's Web site - speak for themselves. Prior to outsourcing, the city was able to accomplish one or two IT projects a year. Their outsourcing contract specified 10 new projects over four years. They actually completed 45 projects!
Application development, new Internet-based features and other innovative projects are self-funded by the approximate $500,000 annual savings Euriware achieved by introducing efficiencies resulting in cost reductions.
Following the example of Euriware Group, the city has created its own Helpdesk Center, which addresses the needs of all the city's inhabitants. Now the mayor can claim that, "This outsourcing relationship is not only helping the people working in the city, but it's also helping the people living in the city." Today, everybody calling the city with any questions regarding the city and its organizations is calling the city's helpdesk. Euriware ensures all the technical IT services of this center, one of the most important helpdesk city centers of France.
In addition to the annual employee satisfaction survey, there is a quarterly Web-enabled citizens panel who is questioned about all of the city's programs and services. According to Legale, the city bases its definition of "success" on the satisfaction levels of its workers and inhabitants. He adds that "The inhabitants say the IT strategy of the city is the best strategy of all the sectors (economic development, social issues, IT) in our city, and it is rated number one in inhabitants' satisfaction."
Both parties speak about the mayor's belief that his role is to serve the inhabitants. It's not just a concept; the mayor is engaged even in visiting the people in the city and is integrally involved in planning services delivery to its inhabitants.
Transitioning to Outsourcing
Because of French legalities, new jobs were in place for all 10 people in Issy-les-Moulineaux's IT department before the outsourcing transaction. That necessitated a quick transition because no one was left in the department, and its director had found a job at Euriware Group. Even so, the four-month transition was phased in: first the new network; then the server and applications; followed by the helpdesk, financial and administrative/reporting processes.
They then built what is termed an "Outsourced System," which is an intranet dedicated to all reporting and monitoring functions for outsourced services. It includes current status on service level performance reports, financial reports and strategic plans.
"We are working together always in the same direction and as a true partnership," says Issy-les-Moulineaux's IS director. "We make sure each time we are in a project, and when we do the traditional IT services too, that we are both winning something. The partnership component of this arrangement is really very important. We want to always evolve and change together in the same direction."
As Charles de Gaulle wrote in his memoirs, "France cannot be France without greatness." One aspect of its greatness these days is the outsourcing relationship between Issy-les-Moulineaux and Euriware Group.
Their contract has been renewed through 2005; the renewal calls for even more projects to be completed per year and even higher-quality goals. Ribere states they are focusing on new challenges, as well as maintaining their top ranking for IT strategy in France. He adds, "Without this outsourcing partnership, it couldn't happen."
Lessons from the Outsourcing Journal:
- Operational cost reductions resulting from an outsourcing provider's efficiencies can be used as a self-funding mechanism for innovative projects and additional improvements.
- Establishing an incentive plan that rewards the outsourcing provider for continual improvements or innovation is the best means of ensuring the parties' interests remain aligned in these objectives.