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Evolving Views On Outsourcing


Rockwell's low-cost model with MBT evolved into a more-collaborative effort, Biggam says.
Biggam says that after starting with an emphasis on getting low-cost coding, Rockwell evolved the relationship with MBT into a more collaborative one. A new three-year contract with MBT lets Rockwell quickly tap specialized telecom experts--such as CRM integration specialists for call centers--as needed. The agreement also calls for the companies to rely on a shared workbook of development practices. For example, in the first year, both companies will work to function on Level Three of the five-level Capability Maturity Model, a system for assuring quality in software development. Level Three means all the steps in a software-development process are repeatable. MBT is certified at Level Five; the companies are looking for some Level Four processes related to benchmarking quality measurements. "This workbook is really the cornerstone of trying to implement that," Biggam says.

It also includes "statements of work" templates for different types of jobs--like a new development project, maintenance effort, or specialty projects--within which they can customize shared risk-reward, so MBT's compensation is tied to the most-important factors. The goal is to balance the outsourcer's and the client's needs, while building both process rigor and flexibility. "The outsourcer wants a guarantee that so many people will be a part of the mix, not necessarily the same people, but a certain number of people at a certain skill level," Biggam says. "We're concerned about quality deliverables, and access to specialty skills."

One of the most-important decisions Biggam, Murphy, and the rest of the leadership makes is which skills need to be kept in-house and which should be hired from MBT, even as the technology changes quickly. "We always want to be strong, no matter what the underlying technology is, in what we'd consider contact-center infrastructure," Biggam says.

That's shifting quickly with the growing use of IP for voice and data, forcing Rockwell to re-train employees and hire people with newer skills. MBT often fills the gaps by supporting old platforms. "All businesses face the re-tooling and the re-skilling of their development organization," Murphy says. "A conscious part of what we're doing with our outsourcing strategy is to create the bandwidth that allows us to invest in the staff development and re-training efforts that people need to stay current."

For Rockwell employees such as James, it's meant a much different workplace. "My day starts a lot earlier than it has in the past," says James, who typically starts at 7 or 7:30 a.m. to catch people in India at the end of their day.

At first, he felt like he was spending all his time bringing MBT employees up to speed on Rockwell's business, which gave him the uneasy feeling he was training his replacement. Now, he feels like it's more of an interaction--MBT employees know more about some technologies such as development tools and processes like as CMM, but he knows more about the inner-workings of Rockwell's tools and its customers. Still, he worries about having to constantly train new people as others move up the ranks of MBT. "Four to five years is about how long it takes to become expert in the product, and then they become a manager," James says.

There are three MBT employees--all Americans--who work full-time on the Rockwell project at its U.S. offices. Kim Harrington, the senior project manager, has been on the job for about a year, working with Rockwell executives as they map out product strategies and customer needs. But Harrington emphasizes he's more a facilitator than a funnel--there's widespread interaction among many Rockwell and MBT employees.

Rockwell finished 2003 with its third straight year of profits and revenue of $112 million. Its executives know the controversy surrounding outsourcing--that it hurt the people laid off and challenged the people who stayed. But they also believe the way they've implemented and evolved the outsourcing partnership is part of their advantage for the future. Says Murphy, "This whole structure is greatly improving our ability to do business as a global company based in America."