Organizations transitioning a business process to an outsourced model find themselves in the throes of dynamic change at every turn. Let's be honest: the transition or implementation period is not easy; many outsourcing relationships encounter costly delays and quarrels at this phase, despite their upfront planning.
Yet, some go through extremely complex transitions without a hitch.
At Outsourcing Center, we've studied hundreds of outsourcing relationships. In some successful cases, the parties follow the step-by-step, tried-and-proven transition methodology for a particular offering of the service provider. In others, the parties work with an advisory firm with expertise in outsourcing transitions. Either way, there are some common characteristics in successful transitions.
We highlight some of them here, in a case study of Istituto Nazionale per lo Studio e la Cura dei Tumori (the Institute), the leading cancer research institute in Italy. The Institute, consisting of nine buildings located in Milan, has outsourced its systems management, help desk, deskside support, hardware maintenance, and asset management services to Getronics, the Netherlands and Billerica, Massachusetts-based global provider of information and communication technology (ICT) infrastructure and solutions.
Founded in 1925, the Institute is financed by the government and run by a Ministry of Health-appointed board. The renowned organization has 300 researchers and is a 500-bed hospital for cancer patients, including children. When Elena Sini, ICT director, joined the Institute in early 2000, she found an unreliable IT infrastructure including very old systems and several not-connected LANs across the campus.
Success Characteristic #1: Frequent communication
The seven-month transition began with migration of 1,300 desktops from the old network to the new one. Moreover, 9,000 access points were deployed with the new Gigabit Ethernet Campus LAN. The old server hardware was replaced at the same time as the hardware migration and replacements were happening. Getronics' crew also transitioned the desktops to Windows 2000 and Office XP and implemented Exchange 2000 and Windows 2000 Active Directory platform. It was a lot of work and a lot of hours, according to Sini. But the real difficulty was in the timing and the environment.
Sini explains: "We have a very high level of service, especially for the operating theatre and the ambulatory areas (where people are waiting); so the Getronics team had a short time to remove the equipment. It was a difficult situation with the very old systems. We had daily meetings to make the transition smooth."
Success Characteristic #2: Flexibility
In all the critical areas, the work was performed during the night and weekends to minimize potential problems to the patients and their families. "We were even working in the operating theatre because there are desktops and the imaging for the network even there," Sini recalls. "Getronics was very flexible to work with us in a way to help our patients. And the feedback from the physicians was that people in the wards said the Getronics people were good at waiting and were very kind with the patients."
They also worked well with the Institute's staff, training both the ICT team and the end users. She says, "A lot of the nurses of about 50 years old had never used a PC and didn't even know what a mouse was. So you can imagine training these kinds of people. But the Getronics team was kind, and our end users even became friends with them at the end of these days together."
Success Characteristic #3: Provider expertise
Many outsourcing transitions encounter unexpected problems, and the Institute/Getronics relationship is no exception. At such times, buyers who have selected service providers with in-depth expertise beyond the specific contractual obligations are the winners, for they have partners who can solve the problems faster and at less cost.
The Institute's ICT director remembers such a problem during the migration of the ambulatory of the pediatria (the children's ward). "They had a particular kind of software doing the work of this unit," she explains, "but the software is from a company that wasn't giving us support. Getronics solved the problem of migrating the software to Windows 2000 very brilliantly even without stopping the work of the children's ward. It was so very difficult to work in that area because of the babies and their parents. There is always a lot of tension there. But Getronics somehow worked very well in the middle of it, even without a program for the software."
Success Characteristic #4: Stakeholder support
For each hospital unit, there is a focal point, an individual who has direct contact with ICT. The focal points are doctors who want to know more about technology and believe in change, Sini says. "During the transition, and afterwards, they acted in their own unit as a champion of the outsourced ICT, promoting the new services. I talk with all of them and explain all the changes we are making, all the new services we are deploying, so they are very conscious of what Getronics is bringing on."
The focal points participate in a very collaborative environment with the Institute's ICT team and the Getronics team. They meet weekly, discussing how they can improve the service and do things better together. One result of the collaborative discussions resulted in deployment of a VPN service for the physicians to connect to the LAN from home and work remotely; the physicians participated in designing the service.
The response to the outsourced services has been so positive that the Institute also decided to outsource its clinical information system.
Their successful relationship has captured a lot of interest, Sini reports. She is asked to speak at seminars and write newspaper articles about their experience. "For the most part, the healthcare industry in Italy is public," she says, and while "it's quite normal to have outsourced services in a private company, it's not normal for a public company yet." In fact, at the announcement of the outsourcing plan, the Institute's physicians didn't believe it was possible accomplish all those objectives in nine months in a public institution. "Nobody believed me or my team," Sini recalls. "But they believe now. And they have much hope in these changes."
Lessons from the Outsourcing Journal:
- Frequent communication and flexibility are key to successful outsourcing transitions.
- Buyers should select providers with in-depth expertise beyond the specific contractual obligations, for they will be able to solve unanticipated problems faster and at less cost.
- Key executives who are stakeholders of the outsourced process in the buyer organization must be kept apprised of change and progress so they can be champions of the outsourcing initiative.