Can outsourcing really be "win-win"?
For this correspondent, one deal in the early nineties was the
deciding factor that outsourcing could make a real difference to
clients' businesses. The deal was the UK-based win that Perot
Systems had with outsourcing East Midlands Electricity's (EME)
technology. The original deal was worth GBP300m and EME was
languishing with a share price that placed it at the bottom of the
list of recently deregulated Regional Electricity Companies
(RECs).
The beauty of Perot's running of the deal was not just to update
and run the technology more effectively, but to transform
the business. Perot hired a number of excellent change consultants
and programme managers (known at the time by as BPR consultants).
These change agents acted as a catalyst for wholesale redefinition
and restructuring of the organisations business processes, not just
the IT department. EME became more efficient as a whole and three
things happened: firstly, EME's share price comparable with the
other RECs jumped from twelfth to sixth. Secondly, Perot doubled
the value of the deal and thirdly, Perot's experience enabled them
to win California Light & Power worth billions of dollars,
rather than hundreds of millions.
Any deal, outsourcing or not, that can have as dramatic an impact
on both itself and the client, has to be the aim of any successful
deal. It is important for both clients and their supplier community
that the lessons learned 10 years ago, do not go unbidden when we
now consider signing BPO deals over the next 18 months.