"The following article was nominated for our Editor's Choice Award 2001. We felt it was a story worth sharing with our readers as an example of excellence in outsourcing."
A goal to realign resources to be more client-centered led to outsourcing at Justice Canada, the federal Department of Justice that is the attorney general for Canada. Linda Holmes, Director of Informatic Services and Technology Division of the Information Management Branch (IMB) for Justice Canada, says that IMB decided to establish a "front office function, where the focus would be on the business of law and how technology can enable the department to do that business better." Budget constraints, however, were no help in establishing this business analyst/architect design function. The solution was to shift employees into this new core area and then outsource the day-to-day operations.
Outsourcing would solve two other serious dilemmas. IMB managed the infrastructure for its client, Justice Canada and was dealing with a lot of client dissatisfaction. "We didn't have enough staff or enough expertise to perform the day-to-day functions, and the department's lawyers had a perception that we were not doing a good job," Holmes explains. IMB's other headache was the rigmarole for procurement of good or services through public works, involving numerous forms and competitive tendering. It made sense to roll this function into the outsourcing contract for "one-stop shopping."
Burden of Proof
Compaq, which has a strong presence in Canada, won the contract. Holmes says they were impressed with Compaq because it had a high-quality bilingual help desk, strong IT expertise and sterling references. "They also showed that they had a understanding of the requirements and would be able to meet our aggressive timeframe - to be up and running completely within 45 days."
The three-year contract began in 1998 and has two optional one-year extensions. Compaq's services include a coast-to-coast help desk, all onsite support in the national capital region (about 10-12 buildings and 1,400 people), systems and network management (55 servers), and the national mail system. The contract also provides for optional services for project assistance, and there is a training component specific to Justice's needs. "We don't have any more generalist courses like learning Word. It's now how do you use Word within the Department of Justice? What macros and forms are geared to lawyers' needs? And the training can be right at the lawyers' desk sites," says Holmes.
She credits Compaq's flexibility for the success of their relationship. "They have a willingness to go beyond the printed type on the contract and say 'what can we do here?' You have to realize when you go into outsourcing that you are going at it from opposite ends of the spectrum. Our relationship works because we try to understand each other's point of view and then find the middle ground."
There have been several challenges where that effort was put to the test. At the outset there were issues around contract terminology problems because IMB had not included a glossary in its RFP. They came to an understanding. Then they encountered difficulties with services because the buyer had provided data based on an old, ineffectual system, and Compaq based its bid on that data. Because Compaq's services have been so successful, more DOJ people are using the services than was anticipated. The result was installs, moves, adds and changes that "went through the roof." They have gone through some negotiations to get some parameters around the installs, moves, adds, and that resulted in some training for IMB's users so they would understand what is in and out of scope. There were problems with the automated software that was used to generate alarms, so Compaq brought experts onto the scene and resolved the problems. They also made adjustments in account management personnel.
More honest than some buyers in admitting the fact that there are always challenges in these relationships, Holmes summarizes all these adjustments thus: "This has been a really great relationship, and we are quite pleased with it. We have adopted an attitude that it is a win win. We try to be reasonable and nonconfrontational. There is give and take on both sides." In an area highly populated with lawyers, both sides have managed to keep them out of the contract management. She says they did a lot of restructuring, focusing through committees, and that "the big thing is always to keep the lines of communication open."
At the operational and executive levels, both sides see themselves as part of the same team. Both have presented each other with award recognition plaques, and there are "lots of kudos back and forth." Both sponsor "Meet and Greet" events, generating an atmosphere of mutual respect while enjoying pizza.
Besides achieving its original objectives, Holmes says her department and Justice Canada have reaped other benefits from the partnership with Compaq. The Department now has asset management and detailed metrics on its operations. "That has been wonderful in terms of rolling out new projects or upgrading software," she comments. "We also have trends analysis and can use the database to determine who needs training. This has also brought in a discipline in identifying processes and things that were sort of fuzzy, vague best attempts. Now we know how things are supposed to work and can achieve some operational efficiencies as well. We now have a big picture view of the Department, which we never had before." Compaq's assistance on Y2k and on the "I love you" virus were also invaluable.
Compaq provides other "extras." There is a monthly report of recommendations for quality improvement and an intranet site full of tips on better ways of doing things. The supplier is studying the capacity of the mail units and makes suggestions where units need to be moved to an area of greater traffic. Several times Compaq has brought in new hardware (IPAC, projectors, remote email, for example) demo units on loan.
IMB's client satisfaction level has spurted up the thermometer, and user surveys indicate Compaq has averaged 4.5 out of 5 consistently for two years. The lawyers are happy!
Lessons from the Outsourcing Primer:
- To avoid problems, buyers need to be very careful in identifying the exact scope and description of services, and include a responsibility matrix and glossary of terms in the contract.
- Because business conditions change, ongoing challenges and negotiations are part of an outsourcing relationship, and both parties need to develop and attitude of give and take and finding the middle ground.
- The supplier's flexibility and willingness to go beyond the printed type on the contract pages will help the parties find a middle ground in negotiations.