InformationWeek

December 8, 1997

Outsourcing Gets Specific, And Complex

Manpower and GE make sure they get what they asked for

hen it comes to outsourcing, companies are finding that it pays to be picky in choosing exactly what to outsource and how to go about it.

Both Manpower Inc. and GE Appliance are implementing outsourcing strategies that cover help desk, network support, and other areas. Both are taking special steps to ensure they get what they want. GE Appliance, the $7 billion household appliance unit of General Electric Co., closely monitors its supplier's ability to deliver a pre- determined set of productivity improvement goals.

Manpower, a supplier of staffing services, has support and help-desk functions handled by a third party under an agreement that includes a transfer-of-technology training plan that will ultimately see Manpower's IT staff taking back responsibility for those activities.

Manpowe r originally planned a broader, multiyear outsourcing plan involving several outsourcers. But "Management decided that the plan was too costly," says CIO Peter Stockhausen, who joined the company last April. Instead, Manpower decided to modify its existing plan. Stockhausen contracted network integrator Vanstar Corp. to create an integrated help desk to support Manpower's network and user applications, as well as deploy Computer Associates' Unicenter TNG network and systems administration software. The goal is to have Manpower's own staff oversee those operations after the installation. "We saved a significant amount of money by not outsourcing these operations on a longer-term basis," Stockhausen says.

For the Manpower project, which is slated to be completed next April, Vanstar is rolling out approximately 6,000 Windows 95-based IBM and Hewlett-Packard PCs to Manpower's 1,600 North American offices, which are split between company-owned and franchised operations.

The Manpower offices are linked vi a a WAN into an NT client-server architecture that replaces hundreds of standalone AS/400 systems that supported individual offices or clusters of regional offices, says Stockhausen. The PCs, which will run Microsoft Office, homegrown ManPower business applications, and a variety of training software, will replace thousands of green-screen AS/400 terminals used by Manpower employees, he says.

To manage the network, Vanstar is installing the Unicenter TNG network suite. Once Unicenter TNG is fully deployed, Manpower's own IT staff will be able to manage the network of PCs and server systems from one location. In addition, Vanstar is integrating Manpower's desktop application help desk with a Unicenter help desk. This will let Manpower help-desk personnel handle end-user calls and troubleshoot network problems.

Skills Transfer
Right now, about a dozen Vanstar personnel are handling those help-desk and network activities with their own "operational experts," says Stockhausen. However, "Vanst ar's staff is providing us with the seeds for our own people to take over through technology [skills] transfer," he adds. That technology transfer, or training, should be completed over the next several months, says Stockhausen.

Outsourcing Precautions

What two companies have done to get what they want

Manpower Inc.: Dropped plans for long-term contracts. Instead, signed short term deal for installing new technology. Deal includes transfer of technology expertise back to Manpower's staff.

GE Appliance: Terminated original deal because of poor performance. Signed deal with new supplier that specifies productivity improvements the vendor must deliver.
DATA: INFORMATIONWEEK

For other companies, it's not so much the decision to outsour ce that's problematic; it's the fine print of the arrangement that can make or break the relationship. GE Appliance, in Louisville, Ky., recently terminated a three-year outsourcing relationship with an undisclosed service company only a year into the contract. GE Appliance CIO Greg Levinsky alleges that the outsourcer failed to do "what it promised to do," but won't provide details because the failed contract is now the subject of a lawsuit.

GE Appliance replaced that outsourcer with Vanstar-which was presented with "a very detailed statement of what we expect," Levinsky says. Vanstar, which provides PC maintenance, network support and help-desk services, is required to meet "a dashboard" of monthly productivity improvement goals.

Several months into the arrangement, Vanstar has exceeded the goals, says Levinsky. "You've got to check references and spell out exactly what you expect from these service arrangements in order to make them successful," he adds. "We got burned once. We spent a lot of time doing our homework this time."

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