Help wanted - outsourcing desktop management - Desktop Management: Untying the Knots

Chief Executive, The, Nov, 1995 by Peter J. Aitch

Technology's not your core competency. The fear of obsolescence is keeping you from making a decision. Political battles are clouding your corporate vision. Maybe it's time for some strategic outsourcing.

Whenever the Southern California Bank in Orange County had a problem with its branch-office PCs, managers had to talk to several vendors to determine whether the difficulty lay in the hardware, the software, or the network. "My thought was, I'm tired of playing referee here," says Larry Phillips, the bank's vice president of information services. And so the bank outsourced the care of desktop systems to one vendor, who now supports the branch system from PCs all the way to mainframe connection.

Like Southern California, many companies find they need to bring in outside help to manage their desktop systems. By 1998, predicts Dataquest Worldwide Services Group, an industry research firm in Westboro, MA, U.S. companies will be spending $38 billion a year on desktop-oriented services ranging from end-user support to PC asset-management programs.

Driving that growth is the need to get more out of desktop systems. "Companies aren't just looking to hire someone on a time-and-materials basis to fix broken PCs," says Allie Young, a senior analyst at Dataquest. "There's a trend toward viewing the outsourcing vendor as a strategic partner." The benefits that companies expect from such relationships include:

* Dealing with complexity. Desktop systems tend to involve geographically dispersed, relatively incompatible hardware and software from many different vendors. Making them work smoothly calls for skills in networking, software, systems integration, data security - and more. "It can be very costly to build that expertise in-house - to train employees, keep training them so they're ahead of the curve, and then have them leave," says Young.

* Keeping up with rapidly changing technology. In general, a new PC system generation comes along every 18 months or so. "What is installed today will have to be refreshed very shortly to stay on the leading edge," says Young. An outsourcing vendor can provide a "view on what's coming down the pike."

* Streamlined support. Traditionally, support for PCs - like the systems themselves - has been fragmented. Now, some companies are placing all their desktop-management tasks with a single vendor, making it easier to ensure that far-flung systems are working in concert and providing a single point of contact for resolving problems.

* Higher-quality support. Downed PCs can eat into productivity. A report from the Gartner Group estimates that downtime for just one 50-person LAN typically costs a company more than $170,000 a year in lost employee time. An outside vendor can help keep PCs running by providing consolidated support for a variety of systems and being able to respond quickly to problems. In some arrangements, the vendor is obliged contractually to fix or swap any broken PCs within an hour or two.

* Objectivity. Efforts to consolidate control over PCs often are blocked by political battles, as departmental managers defend what they believe is their turf. To a large extent, a third-party company can come in and provide both a neutral perspective and some distance. The vendor also may be able to spot re-engineering opportunities.

The key to getting the most from outsourcing lies in forging a contract that spells out the vendor's responsibilities in great detail - and yet leaves room for new technologies and shifting business requirements. "You need to build in the flexibility to adapt and change with the strategic needs of the corporation," says Lawrence A. Willis, executive vice president of the First Manhattan Consulting Group in New York.

To that end, it's critical that executives do their homework before they turn to outsourcing. "A corporation needs to know what its business objectives are and clearly understand what it wants to accomplish - with specifics," says Gerry Gagliardi, president of the Unisys Global Customer Services Group. Without that knowledge, he explains, it will be hard for the company to know just what it wants the outsourcer to do.

Finally, says Allie Young, pay attention to those gut feelings. "It's important to find a vendor with whom you have a good cultural fit - someone you simply like working with. There has to be a lot of give and take, because when you talk about a strategic partnership, the implication is that both parties are very open. If you don't feel that mutual trust, then that cooperative working relationship just doesn't happen."