InformationWeek

While shortening installation time was one consideration, the biggest impetus to outsource was the ability to let store associates concentrate on store operations, rather than on system operations. "We're not spending time talking our store associates through the unpacking, setup, and connecting of cables and testing systems and network functionality," Light says. "If problems arise, ICL can do a better job of troubleshooting problems and identifying resolutions."

Each quarter, ICL receives an estimate of the number of Staples stores scheduled to open. When a Staples implementation team receives official notification of a new store launch, ICL is notified via a weekly updated store spreadsheet that lists store number, address, equipment due date, installation date, and opening date.

ICL procures about 80% of the necessary equipment and schedules integration resources to ensure staging and integration. It also schedules technology resources on specified dates and installs all equipment. ICL's call center supports Staples' IS support centers, which field incoming calls on technology issues from sales associates. "We have a single point of contact for all our in-store technology, regardless of the manufacturer," says Light. "If a mission-critical system is down, we're guaranteed a quick response."

That quick response is guaranteed by an unusually high service-level agreement that hits percentages way beyond the traditional performance commitment. The SLA took nearly eight months to hammer out, says ICL's Daniels. While the standard SLA tops out at about 60%, ICL has committed to a 98.5% compliance level on professional services, and a 91% compliance level on maintenance and warranty services.

"The SLA agreement is critical for Staples in terms of what they need to support their operations," says Daniels, who acknowledges that reaching the SLA wasn't easy. "It was a pretty difficult thing to determine what was feasible, what made sense economically for Staples." The companies review the outsourcing effort once a quarter, and while neither will disclose specifics, financial penalties apply if ICL doesn't meet SLA specifications.

For its Staples account, ICL has a global project manager who works alongside Light's IT staff. Four full-time project managers track store installations. Since many store locations are a "retrofit," and not brand-new sites, few site installs are the same. "It's not a cookie-cutter process; it would be great if it was," says Daniels.

Uniformity in the ICL install makes leveraging technology capabilities quicker and easier, especially on the global spectrum, says Light. "We're operating in lots of different channels, lots of different geographies, and we want to be extremely nimble across these different businesses. If we identify a new capability in one channel, we can now apply that to other channels." Staples has completed several store acquisitions in Germany, The Netherlands, and Portugal in the last eight months.

While ICL is hustling to get new locations up and running, Light's IT team is busy in familiar trenches, replacing outdated ICL equipment at older sites and upgrading POS terminals in a majority of locations this year as part of the uniformity effort.

Looking back at the past 18 months, Light advises companies to make sure to do their homework when it comes to handing off total cost of ownership for IT efforts. "A change of this size needs to be managed and nurtured through to maturity," he says. "Just as important, companies must identify the impact to the business if the expectations aren't met, and what type of recompense may offset that impact."

And, of course, be prepared for a long road ahead. Says Light, "It just doesn't happen overnight."

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