PODCAST: CIO: Outsourcing Helps His Team Become Strategic

When JohnsonDiversey CIO Matt Peterson signed his first outsourcing agreement three years ago, his No. 1 goal was cost reduction -- "and it was a long way down the list to get to No. 2," he said. But because the relationship with outsourcer Wipro has steadily evolved, Peterson is finally able to turn his focus outside the company to working with customers to drive revenue and loyalty.Wipro's ability to help $3.5B JohnsonDiversey significantly reduce IT costs on everything from applications maintenance to its data center was a "significant achievement" for the company, Peterson said, and gave him and his team the ability to change "from efficient order-takers to actual strategic business enablers" in the company's growth and development.

"For the first 18 to 24 months, I had to be very tied in to the daily issues," Peterson said, but because his company and Wipro have developed a sense of trust and respect, he and his team have been able to spend more time working with other JohnsonDiversey managers on strategic new projects. (You can hear the story in Peterson's own words on this Global CIO podcast.)

A big lesson Peterson had to learn the hard way involved setting SLAs. As the engagement with Wipro was getting started, he said, the IT team was deeply involved, but not leaders from other parts of the business. As a result, Peterson said, JohnsonDiversey's IT group was meeting its SLAs, but the company overall was not getting full value in customer-satisfaction surveys.

The big aha? "What our IT team thought was important wasn't necessarily important to our customers," Peterson explained.

Other lessons: Clearly articulate and delineate roles and responsibilities for the client and for the outsourcer; create contracts that achieve the above clarity but also leave some room for flexibility for each party; and keep as much emotion as possible out of the interactions by keeping roles and expectations very clear and very simple.

And just as the enhanced relationship JohnsonDiversey has established with Wipro has allowed Peterson and his team to move on to higher-value projects, so too has it given Peterson the confidence to engage with Wipro on more-significant projects. Those include environmental issues, which are crucial to the company as a manufacturer of commercial-cleaning and chemical products; Six Sigma development projects; and a general tendency for Wipro to become engaged with not just technology issues and ideas but also business-related challenges.