640 Part IV • The Information Management System
someone stops us, and they don’t have a ticket. We
can spend an hour at somebody’s desk—turn in an
AIP (Action in Progress)—and get credit for the
time we spent on what we did. You are still not doing
it as “freebie” work, but accounting for your time. So
within this last year here, we have had tons of com-
pliments on the way things are working.
—Larry Brown
Part of that was morale. There were people in the
[desktop] team that were just frustrated with being in
that middle position— being in between your cus-
tomer and your employer. They felt they were caught
is this “tug-of-war.” Once it came in house, everybody
saw the opportunities that were available, and realized
that things were going to be better—but at the same
time that expectations were going to be higher.
—Evan McGreary, Desktop Support Lead
Several business users expressed their happiness with
the improved customer service in writing (see Exhibit 3)
The New Outsourcing Dilemma for Schaeffer
About four years into the contract with ABC, Schaeffer
announced a more radical business restructuring plan:
The parent entity would be dissolved, and two separate
business entities would be created for its two remaining
divisions. The news of the split was received positively
by Schaeffer’s shareholders, as Colbert currently had
about $700 million in annual revenues and 3,500
employees, but Reitzel was almost twice that size and
still growing.
An agreement was reached with ABC to transfer the
outsourcing contract from the parent (Schaeffer) to the new
Reitzel Corporation, with no financial penalty. This meant
that the new Colbert Corporation could decide whether to
continue in an outsourcing arrangement with ABC via
Reitzel, start a new outsourcing contract of its own, or
insource all of its IT infrastructure activities. The current
IT leadership team at Colbert included several seasoned IT
managers, including one manager with deep experience
working for a different large outsourcing vendor. These
same managers had been responsible for Colbert’s recent
success at insourcing the desktop support for all of
Schaeffer. A few weeks after the business restructuring
announcement, Colbert’s IT leaders began assessing what
insourcing would mean in terms of not only IT costs but
also the hiring of new IT talent in the current regional labor
market:We think we can do it cheaper, better, and faster
internally. There’s always a markup with a vendor:
the vendor has to make 15–30% markup with their
people and leveraging is very difficult. When you
need a dedicated onsite facility, a vendor can’t do it
cheaper than you can—unless you do offshoring.
—Rusty EvansPursuing an agreement with a regional IT out-
sourcer that is not burdened with global support needs
also might be an attractive option. But every one of
Colbert’s IT managers agreed that the complaints about
customer service under any new arrangement would need
to go away.
As for the new Reitzel Corporation, its managers
must decide whether or not to renew the IT infrastructure
contract with ABC when it expires, and whether or not to
continue to purchase desktop support from Colbert.
Another key outsourcing issue to be addressed is
whether to continue to sole-source its IT infrastructure
activities, or whether to open up negotiations with other
vendors for competitive bids. Sole-sourcing may not
lead to the lowest cost or best SLA contract terms.
Competitive bidding might lead to lower IT contract
costs for Reitzel, but even going through the decision
EXHIBIT 3 Quotes from Business Users process would be resource-intensive. Changing to a
1.It is so paralyzing not to have a computer in this day and
age, and Sam was of great help. I thought you should
know that I was very pleased with your staff.
2.Two words come to mind regarding the implementation of
my new laptop–“AWESOME SERVICE!” From the time
the e-mail was sent to the final installation of the laptop,
everyone involved was very professional, and extremely
helpful in getting this done so quickly for me. You all did
an awesome job and should feel good about what you
do for our organization.
3.Thanks for the excellent job in setting up my new laptop.
This will make my transition to Germany much smoother.
4.Tina and John have been awesome! I was blown away at
how quickly you turned around my computer! You were
both available by phone for me. My computer is great! I
feel like it’s Christmas all over again.... I can’t tell you
how much I appreciate your seamless response!
5.I wanted to let you know that Jack came up this AM, to
work on my problematic printer. He arrived early and
was very cheerful and took a lot of time to work on it. He
even gave me his cell number in case I ran into any more
problems. I know this printer has been difficult and with
Jack’s help, it now seems to be working wonderfully!