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Vintage Outsourcing

Outsourcing Excellence Award – Best Process Improvement Winners – E&J Gallo Winery and CompuCom Systems

“When I arrived, I would describe the company’s desktop services, network, and server environment as kind of like the wild west,” says David Hatch, Sr. Director, IT Operations, at E & J Gallo Winery (Gallo). “It was a siloed environment with independent, end-user support activities going on in an uncoordinated manner. The Desktop Services group had an average PC repair time of about 20 days. Users who didn’t have a close relationship with their building technician sometimes resorted to the recourse of taking their desktops to the local computer store for repair, or just buying a new one.”

Prior to outsourcing, Gallo’s service desk consisted of four technicians who sat in a closet-sized office, with a voicemail front end, and a trouble-ticket-tracking system that often didn’t function. Most people ended up leaving a voice mail message, which was commonly not responded to in a timely manner, if at all. “It really revolved around who you knew as to whether you got your PC fixed quickly,” Hatch recalls.

Hatch, who was tasked with fixing the IT services situation, was an advocate of outsourcing as the best solution for bringing service levels up and cost of ownership down.

Both finalists in the subsequent service provider bake-off offered the same price, and both claimed they could provide the required services; but CompuCom Systems (which was acquired in May 2004 by Platinum Equity) was deemed to be the best choice for an outsourcing partner because of its flexibility. Although Gallo had historically relied on contracting services, Hatch knew outsourcing success was dependent on relationship factors.

They evaluated where they wanted to go and what the relationship would look like in five years. “We wanted a relationship where the spirit of what we were trying to make happen was that the outsourced entity would be perceived as the desktop services group for the company,” Hatch recalls. Today, six years later, Gallo retains a director, a service manager and an analyst who manages software licensing. Its IT procurement, help desk services, desktop and server support, image management, desktop applications testing and international support are all provided by CompuCom.

Turning the Vision into Reality

The outsourced service desk went live 60 days after the signing of the contract. In contrast to the pre-outsourced service, Gallo and CompuCom decided against using any front-end IVR functionality so that all calls would be answered live, 24×7. They jointly built a culture of taking care of users as quickly, smoothly and courteously as possible.

User resistance slowed progress during the first six months. Initially, users did not understand how CompuCom people answering service calls in Dallas could help Gallo people in California. The fact that a remote service desk could offer an improved level of service without being onsite proved a difficult concept to sell to the end users.

Together, management teams at both companies began a concerted one-on-one marketing campaign to persuade end users to try the CompuCom service desk. “We did a lot of walking around and sitting with people, encouraging them to pick up the phone and try the new service,” Hatch recalls. “We’d say, ‘There’s a live person there who will answer the phone and talk to you, any time, day or night. You no longer have to leave a voice mail message that may never get returned.'” They also instructed the desktop support technicians not to say “no” to users if they didn’t have a trouble ticket; instead, technicians were to show users how to call the service desk and initiate a service request (ticket).

The marketing campaign included posters, computers that danced across users’ desktop screens, brown-bag lunches, information exchanges, attending user departmental staff meetings, and pictures of the CompuCom agents so Gallo people could put a face with a name.

Once Gallo began receiving service performance numbers, they could back up their claims of high-quality services — how many calls were responded to and how quickly. “We had to do a lot of selling — feeding performance metrics back to the users,” says Hatch. “Those results fostered acceptance.” He adds, though, that it took a year to get to the point where everybody was on the bandwagon and using the services the way they were designed.

Sparkling Services at the Winery

Building the relationship remains a priority of Gallo’s corporate team. They travel to CompuCom in Dallas for quarterly business reviews, bringing Gallo user advocates along to meet some of the people answering their calls at CompuCom. They also take some of the provider’s call center agents to dinner the first night of the quarterly meetings to foster team spirit and reinforce the strong relationship. Sometimes, the winery sends wine and t-shirts to the CompuCom service desk folks to make them feel part of the E & J Gallo team.

Their successful relationship has evolved to using the phone number at the service desk for some front-end triage on applications. This strategy is twofold: it extends the guiding concept of a single point of contact for user assistance, and it leverages CompuCom experts for the winery’s new IT initiatives (such as applications testing or XP implementation). The services are SLA-driven; but, as Hatch explains, if CompuCom can leverage its people to meet the SLAs and still provide Gallo support for other projects, they both win. “We get associates who understand our environment and who have a relationship with our users, so our cost is actually less than bringing in somebody who doesn’t know anything about the winery and trying to make something happen,” states Hatch. “So we get efficiency and lower costs, and CompuCom gets an opportunity to leverage its investment.”

Together, they achieved more in 18 months than many had thought would be possible in five years. In regard to desktop support, there is very little distinction between the two companies among the winery’s user community. CompuCom has quite a following. User satisfaction surveys are “glowing,” Hatch reports.

This success of the CompuCom relationship has gone a long way toward convincing the winery that outsourcing can work and is a viable alternative to consider in other areas of the enterprise. “As we benchmark other companies and relationships, this one is different,” Hatch claims. “I take great pride in helping to create this environment, but it’s really about the team and great attitude and the way we work together.” Indeed, this relationship is a great example of “how Gallo’s outsourcing is supposed to be done.”

They’ve come a long way together in six years. CompuCom gives an “Eagle Award” to its top sales reps, program executives and other internal performers annually. Last year, the firm gave its Eagle Award to E & J Gallo Winery. “This is not your typical outsourcing relationship,” says Hatch. “We’ve moved the big eagle statue around to the entire team in Dallas and at the winery so that everybody has an opportunity to share in the glory. That’s the kind of relationship we have.”

View on Relationship-Building:

  • “What we have truly is a cross-organizational team that is focused on delivering value. People throw those words around a lot; but other suppliers always go back to the contract and say, ‘We can’t do that because…’ But what we’ve got with CompuCom is a team and a relationship that’s about servicing the customers. We both bring to bear whatever it takes to do that, and then we deal with the ramifications after the fact.”
  • “At our quarterly business review sessions, we spend an entire day just going through the numbers. In addition, part of the evaluation is going through an analysis of a healthy relationship — what’s working and what’s not working. We are very, very candid with the executives as well as with the operations people at CompuCom about what our thoughts and views are, and we invite them to be just as candid back to us.”

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