Outsourcing Disaster Relief

By Katherine Swarts, Business Writer

Outsourcing Disaster Relief

Quick Starts and Smooth Transitions

On September 11, 2001, the fall of the World Trade Center shook New York City, the United States and most of the world. The aftermath of that day has brought many issues to the forefront of the American mind including the honor due firefighters, police and other rescue workers.

Among the hundreds of casualties in New York on 9/11 were over 400 rescue personnel—representatives of the New York City Fire Department, the New York City Police Department, the Port Authority of New York and New Jersey Police Department, and the New York State Office of Court Administration, among others. In response to the widespread desire to help families of the uniformed rescue personnel who suffered death or serious injury on September 11, the Twin Towers Fund (TTF) was established shortly after the disaster to coordinate the collection and distribution of donations. Also included in the distribution are families of some 32 civilians who suffered death or injury while assisting in the rescue efforts. (Most of these civilian heroes worked in the World Trade Center.)

The TTF started without an accounting system or accounting personnel. With an immediate flood of donations and a need to “get down to business” promptly and smoothly, the fund chose outsourcing as the most prompt and practical route to effectively handle the accounting functions. TTF representatives selected Outsource Partners International (OPI), a BPO firm specializing in finance and accounting. In the interest of giving back to the community in New York City, OPI, which is headquartered in Manhattan, provides its services to the TTF on a “pro-bono” basis.

OPI began work in April 2002, starting with the implementation of suitable contribution management and financial accounting systems, and the integration of the two systems. OPI then began the task of recording contributions, distributing payments to beneficiary families, balancing the books and handling financial reporting. “We marry a whole bunch of skill sets on an engagement,” says James Liggett, managing director of OPI’s New York office.

The Offshore Component

OPI’s work on this project also “marries” two countries; OPI’s Bangalore (India) office handles most of TTF’s accounting work. Source documents are scanned in New York and sent to Bangalore by remote connection; the Bangalore office handles 95 percent of document and transaction processing. Meanwhile, the New York office manages overall supervision, quality control, exception management, financial reporting and client relationship.

The sharing of duties leads to a tangible increase in efficiency. “While we are sleeping, our team in India is working,” says Keith Alphonso, spokesman for OPI’s marketing department.

Efficiency is vital in managing disaster relief. Since disasters happen with little warning and relief programs are frequently geared toward specific disasters, it is necessary to assemble staff, resources and management on extremely short notice. Outsourcing, which can provide turnkey solutions practically on demand, is an extremely effective and usually inexpensive solution to the need to get going quickly, especially when an agency or fund is already familiar with an outsource provider’s work and reputation. “We had to give them a solution real fast,” says Manish Vora, OPI’s main contact with TTF.

OPI did provide a fast and scalable solution. “When any difficulty has arisen,” says TTF president Larry Levy, “OPI has acted quickly to resolve it.” OPI also provided a built-in transition plan for the transfer of data, “a very effective way for the fund to start up and turn off,” says Liggett. The first distribution, totaling approximately $103 million, went out within a month of OPI’s coming on board.

Staff members at OPI and TTF remain in continual touch with each other, ensuring that OPI, as the fund’s accounting backbone, stays updated on the fund’s business. In addition to holding formal monthly meetings with OPI, fund representatives are “never more than a phone call away” from OPI’s Vora, says Levy.

Vora is a “virtual member of our team. We consider him an extension of the staff,” adds Howard Greenstein, TTF’s director of operations. Such regular contact ensures smooth operations and full exploration of options.

Currently, the fund is exploring the smoothest way to dissolve its operations. As of January 2003, the Twin Towers Fund (planned as a two-to-three-year program from the beginning) has distributed nearly $200 million, more than 90 percent of its allocated donations. The TTF will make its final distribution in the summer of 2003 and formally cease to exist in August 2003. Its legacy will live on in the people it assisted and the memories of the heroism displayed by those it honored.

The TTF has left its mark on OPI as well. “It was very challenging getting all the systems in place,” says not for profit specialist Debra Miloscia, OPI’s TTF manager, “but extremely rewarding.”

Paying back society for a good deed is always rewarding, all the more so when done effectively. Even in hard and hectic times—perhaps especially in hard and hectic times—outsourcing is a useful way of ensuring effective results.

Lessons from the Outsourcing Journal:

  • Regular communications between provider and contractor are important to smooth and effective relations, and a specific regular contact person is particularly valuable.
  • Outsourcing provides a swift turn-key solution, which is often vital in a disaster situation.
  • Using offshore labor means the service provider is able to work 24 hours a day thanks to the time difference.

About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].

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