InformationWeek

Clients generally approach EDS and other services firms for needed IT expertise or to accomplish an innovative project fast, Rucker says. Productivity is an outcome of helping to improve clients' processes. EDS's clients measure productivity in different ways, depending on the goal of the project, says Rucker. For instance, project goals may include such productivity-enhancing efforts as redirecting staff to more critical functions, reducing costs, increasing market share, improving time to market, or streamlining order-to-fulfillment processes. And contracts are sometimes based on specific productivity improvements, he says. "Sometimes we're paid based on the [additional] tons of steel a customer can ship" as a result of a project, Rucker says.

Other IT services companies agree that productivity improvements are crucial in most client engagements. "We need to justify our existence," says Bahar Uttam, chairman of Synetics, an IT services firm in Wakefield, Mass. "Our philosophy is to show a client with an objective measure that they can improve something through IT." For Synetics' clients--primarily pharmaceutical and insurance companies--that might mean streamlining the process of analyzing tests for trial drugs, or helping to assess a patient's risk factors for a life insurance policy faster, he says. "We can cut 30% to 40% of the time involved in a process," he says. This is often accomplished by using IT to help workers to "work smarter, but not necessarily less." Synetics' customers often see improved productivity right away, Uttam says, though improvements typically are judged by cost-savings at the end of the year. "Improving productivity is an end result of improving processes," Uttam says. "Labor costs are typically a customer's highest costs--if you can make workers more productive, you can save costs."

Productivity improvements through IT may be a shortcut, but it's a mistake to substitute that for the human touch, says EDS's Rucker. "Technology is used to eliminate processes and steps," he says. "We try to reduce steps, as opposed to automate processes." That's because automation isn't a guarantee of customer satisfaction, even it if does improve productivity or eliminate jobs. For instance, deploying a fully automated customer-service operation in which no customer-service workers are available by phone would be frustrating and unsatisfactory to most consumers, he says. Instead, EDS has deployed "high-touch" customer-service solutions such as one for General Motors Corp. that let the automaker's customer-service reps see callers' prefixes and area codes automatically so that the system can advise the consumer of nearby dealers, he says. That eliminates process steps and saves time, while enhancing services and maintaining a relationship between GM's customer-service people and the company's clients, he says.

For most clients, says Uttam, the services equation is simple: "Time is money."