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Secret CIO: Another Outsourcing Done Him Wrong SongSecret CIO: Another Outsourcing Done Him Wrong Song

Low costs are important, but quality service is what really counts.

Herbert Lovelace

March 26, 2004

3 Min Read

Over the years, I've found there's real value in talking to other CIOs about their problems and tribulations. It isn't just the pleasure of commiserating about the unfair burdens heaped upon us. What makes these discussions essential is the ability to learn from their experiences. It's far better to have knowledge of where a specific technology or vendor is weak than it is to go blindly into what can be a career-threatening decision (aren't they all today?). So it was with anticipation that I met my friend Glenn after work.

Glenn is one of the more innovative CIOs in our city. He was the first among us to try voice over IP and to provide executive education in IT when the rest of us were complaining that our business leaders didn't have a clue as to what we did for a living. Recently, he decided to outsource his global help desk for internal users and business customers. Since his company depends heavily on Web-enabled transactions, this step wasn't a trivial one. Glenn had told us that although other industries were using outsourced customer support with mixed results, he felt that he could make it a success, even though his business requires some specialized knowledge of regulated products. When I got to the hotel bar, Glenn was ensconced at a corner table with a drink in front of him. This behavior was unusual for him. The man limits himself to one adult beverage and never orders before I arrive. I figured that I already had some insight into how his great leap forward was progressing. We shook hands and I sat down, ordering my Bombay Sapphire up and very cold. Popping a few turmeric-coated cashews into my mouth--they were delicious--I inquired about how things were going. "Herb," he responded, "things are terrible. I'm getting nothing but grief from the CFO and business heads. They want to save money. I tell them I'm going to cut costs, but there will be a learning curve for the outsourcing. They buy into that and then freak out when we have the normal glitches!" Glenn knows very well that people expect excellent service even when they tell you they're willing to settle for less, so I was somewhat puzzled. I delve a little bit and find out that the outsourcer was cutting his own costs by subcontracting some of the work to a third party who didn't share Glenn's enthusiasm for getting things done right. "Glenn," I ask, "didn't your contract prohibit subcontracting without your approval?" Staring into his second drink, he bitterly tells me that the legal eagles in his company neglected to include that clause in the agreement and that his own IT people didn't notice the omission. "And, what's worse," he concludes, "I know better than to believe my so-called peers when they tell me that they're willing to trade off a little service for reduced costs! All I hear now is that if another customer calls up complaining, they'll hire their own technical-support staff. I'm furious with them and, to tell the truth, with myself for permitting this fiasco to occur." And with that comment, he downed the rest of his drink. Glenn will fix the situation, but his reputation in the company has taken a big hit. He will survive, but he best not fail again in the next decade or so. Herbert W. Lovelace shares his experiences as CIO of a multibillion-dollar international company (changing most names, including his own, to protect the guilty). Send him E-mail at [email protected]. To discuss this column with other readers, please visit Herbert Lovelace's forum on the Listening Post. To find out more about Herbert Lovelace, please visit his page on the Listening Post.

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