The outsourcers among us

TORONTO — The secret to a successful relationship with an outsourcing partner is treating them like a part of your internal staff, public and private sector senior executives told the CIO Summit Tuesday.

Balancing innovation

with practical business concerns like financial implications should be the foremost concern for any CIO considering an outsourcing deal, Eric Whaley told the Toronto audience of the two-day CIO Summit. The chief technology officer and chief strategist for Merrill Lynch HSBC Canada Inc. said the way to achieve that balance is to approach the deal by looking at its implications on how it will affect the entire organization and to treat the outsourcing partner as part of the internal team.

Merrill Lynch HSBC Canada has taken that exact approach, Whaley said.

“”Any meetings, any townhalls, any Christmas parties we had, they were invited,”” he said.

As result of that inclusion the vendor began identifying with the enterprise’s success, he said. Interaction made staff of the partner company want to see Merrill Lynch HSBC Canada succeed.

Things can get tricky, he admitted, because outsourcing deals bring together companies who are separate and sometimes quite culturally different from each other. A good project leader will ensure everyone knows that outside and internal staff is now part of a whole and that the blame game will not be welcome should trouble arise, Whaley said.

“”Make it clear, no egos. You can’t afford egos and fingerpointing,”” he said.

Things are much easier too, said CIO of BC Ministry of Health Services John Schinbein, if internal staff can be convinced that the outsourcing project is meant to make their lives easier.

Schinbein said his ministry was having a difficult time keeping up with the technology curve in the late 1990s and its staff was spending too much time dealing with administrative issues. Service automation, courtesy of applications developed and managed by new outsourcing partner IBM, freed up staff to concentrate on critical tasks, an easy thing to sell to managers.

Establishing a close working relationship was trickier when it came to dealing with unions, Schinbein said. The public sector unions were none too pleased to hear about the agreement, he said, but looked more positively on it when it was made obvious to them that the government just did not have access to talent necessary to make BC an e-healthcare hotbed.

“”That doesn’t mean there aren’t ongoing issues with the union,”” Schinbein said. “”Good communication has been key to getting around those.””

Since the partnership’s inception the ministry has decided to grant IBM preferred vendor status and handed over the development and management of such applications as client registration, premium billing applications, disaster recovery planning and testing. IBM is now in charge of 300 of the total 360 applications the ministry uses, Schinbein said, and it accounts for 30 per cent of the ministry’s total IT spending.

The ministry’s close working relationship with IBM is proving challenging when it comes to other vendors it works with — another factor to consider when setting out on an outsourcing project, he said.

“”There a lot of vendors who aren’t happy,”” he said.

Outsourcing is only going to be a growing trend when it comes to government services, Schinbein said, so there should be opportunities opening up for other firms.

Outsourcing is always a balancing act, Whaley added. Often the biggest challenge a CIO will face is taking all of the information necessary to successful implementation of a project and creating out of it a roadmap clearly understandable to both the internal and external teams.

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