Critical Thinking: Consultant Case Study

complaints about the performance of our present help

desk, so people’s concern in this area may be a case

of preferring our familiar mediocre service to the

unknown. However, the task force understood peo-

ple’s fears and put a lot of effort into defining per-

formance criteria, both for response to help desk calls

and time to resolve problems. We have involved large

numbers of our users in defining these service crite-

ria, and ABC has agreed that they are attainable, and

they will pay significant penalties if they are not met.

In Europe, each country has its local help desk

support.With all the divided responsibility, this is

hard to manage with a hodgepodge of processes and

no global view of our support issues. ABC will pro-

vide a global help desk with a single process and an

integrated database that all countries will work off

of. Furthermore, ABC’s help desk will be globally

redundant as it can be supported from any site where

ABC provides help desk services. We believe that

help desk support will be a shining example of the

value outsourcing brings to the table.

In the final analysis we have to recognize that

Schaeffer’s world has changed. We have to move our

mind-set into the twenty- first century where informa-

tion technology organizations will also become man-

agers of IT service providers rather than providing all

the services themselves. The challenge of our IT peo-

ple will be to manage a long-term relationship with

ABC, and at the same time to establish closer relation-

ships with users in the divisions so that information

technology can more effectively support the essential

needs and strategic directions of the business.

Harding responded to some of the concerns that had

been expressed:

We have been very concerned about what may hap-

pen to our IT people who may be displaced. Many

people who worked in this organization were worried

about what outsourcing would mean for them. We

tried to engage them with ABC so that they could

learn about what it would mean to work for ABC. We

brought in ABC people who joined them from a

client firm who talked with our people about how

wonderful it had been for their career. We tried to

convince our people that if you are a technical per-

son, working for ABC is a good thing because you

have so many more opportunities for technical career

development and advancement. Instead of working in

Vilonia in an IT organization with only 100 positions,

you are going to work with a company that is global

and has 100,000 employees. Unfortunately, that argu-

ment worked with a few people, but the bulk of the

people had the attitude—“Look, I care about my

career advancement, but I want to stay in Vilonia.”

We had about 100 headcount when we started

studying outsourcing. However, during the outsourcing

decision process, 10 people decided to leave for other

jobs; and we did not fill these vacancies with Schaeffer

employees—we filled these positions with temps—so

now we have 90 Schaeffer IT employees who will be

affected. ABC will likely offer jobs to about 40 of our

current employees, but some of them may not take

them because in the long run they might have to leave

Vilonia. So at least 50 people will be terminated if they

can’t find other jobs somewhere within Schaeffer. They

will be given six months’ pay and help in finding other

employment. Fifty is a very small number when com-

pared to the thousands of Schaeffer’s people in Vilonia.

It has been suggested that we could use the

resources that we will devote to outsourcing to build

up our internal IT resources and employ more con-

tractors and thereby satisfy our future needs. This sug-

gestion simply reflects a lack of understanding of how

different our future must be. Although we have good

information technology resources today, “good” will

not be good enough. We are going to have to change

our corporate aspiration level from being satisfied

with our insular way of doing things, to a situation

where in critical areas we aspire to be the very best.

To accomplish our goals, our IT support must be the

very best, and ABC is clearly outstanding in providing

that support. ABC brings IT resources that we simply

cannot match given our size and location.

It has been suggested that we outsource IT for

Reitzel only, and leave all IT in-house for the other divi-

sions. That would be very expensive because we would

lose economies of scale. We would have to restart nego-

tiations with our current vendors as well as ABC, and

would not be able to get the same deals because of the

smaller scale. Furthermore, today our IT operations for

all three divisions are consolidated into a shared infra-

structure. To break this infrastructure apart to take out

Reitzel would be very expensive and take many months.

That would be a logistical nightmare for Reitzel, espe-

cially when they are attempting to concentrate manage-

ment attention on leveraging their core competencies.

Our management is going to have all it can handle just

striving to meet its ambitious growth goals.

It was now up to Schaeffer’s corporate management

to make a decision on the task force recommendation.

Case Study IV-3 • IT Infrastructure Outsourcing at Schaeffer (A): The Outsourcing Decision 633