Reaching your outsourcing destination

Not to avail oneself of the tools, processes and various guides available to help steer one through the complexities of selecting and contracting with an outsourcing services provider would be as perilous as setting out on a journey without maps, charts or compass.

Among those guides are seasoned travellers who bring valuable insight as they recount the lessons they have learned. One such traveller is Debbie Koscielniak, director, Operations Management and Governance, Human Resources Division, BMO Financial Group, who found that communicating effectively is a key issue on such an undertaking.

Koscielniak spoke as a panellist at CIO Canada’s Outsourcing Summit in Toronto on May 5, 2003, referring to her experience as part of the BMO team that led to the bank signing an agreement with Exult Canada, Inc. on April 23. The subsidiary of Irvine, CA-based Exult, Inc. has been contracted to assume responsibility for managing administrative human resources (HR) services such as payroll and benefits administration, HR call centre management, employee records, and other technology-driven administrative functions.

The outsourcing agreement is valued at $75 million per year over a ten year period, according to a joint company press release. The agreement will affect approximately 250 positions in Canada and the United States. The majority of the employees in these roles have been offered comparable positions within Exult, Inc. or in other BMO departments.

From a lessons learned perspective, “it is tricky to get the message right, to know how much to say when and to whom,” Koscielniak said, referring to communicating internally. “Depending on who your audiences are, a little bit of knowledge can be dangerous because people go away and make assumptions based on not the whole story. But too much information can really slow you down. The core project team found themselves needing to share their gained knowledge of the business process outsouring environment to help put context around information sharing.

“We have a fairly rigorous internal stakeholder structure so lots of areas have to sign off on a project the size and scope of this,” she added. “Internal groups like risk management, taxation, audit – those kinds of groups – you need to give them enough information to properly understand the deal while managing their interest in the whole outsourcing concept and their need for more and more information.”

She said that BMO took a very open approach in communicating with their HR employees, using broadcast email, password protected intranet sites and fireside chats with senior leaders in HR.

Fellow panellist Peggy Mulligan, executive vice-president, Systems and Operations, Scotiabank, also stressed the importance of communication from her lessons learned perspective at the CIO Canada Outsourcing Summit. In May 2000, Mulligan led Scotiabank to a $900 million, seven-year agreement with IBM Global Services to outsource the bank’s domestic computer operations. Twenty months later, on Feb. 3 this year, financial transaction outsourcing service provider Symcor took over all of Scotiabank’s cheque and bill payment processing, including associated statement and report printing activities across Canada. The 13-year service agreement is valued at about $1.1 billion and involved about 1,000 Scotiabank staff in six centres from Halifax to Vancouver becoming Symcor employees.

The Canadian Public Relations Society in June is presenting an honourable mention award in the internal communications category for a joint submission from Scotiabank and its outsourcing partner Symcor highlighting the internal communications program that addressed the item processing outsourcing that went into effect last February.

“I probably spent about 40 per cent of my time on the employee communication side,” Mulligan recalled in an interview later. “We did a lot of face to face. We did a lot of town halls.”

As the driver of the outsourcing bus, she stayed in open communication with staff and withstood the heat even when they loudly voiced their doubts and concerns.

“The personal direct touch and the sheer amount of time we spent on it probably helped.”

The focus on communication was one of the recommendations by Scotiabank’s hired advisor TPI.

“TPI were real clear that you better have your employees understanding and ultimately accepting what you’re doing,” Mulligan recalled. “There was a good warning from the start from them and good structure about the things one should think about and the right time to do the various levels of communication. Taking all these very good processes from the IBM [outsourcing experience] and adding things that we should have and could have done better and applying those lessons the second time around – it just worked really well.”

Hire a guide

Although Scotiabank has a strategic sourcing group, Mulligan said that given the transaction’s size, substance, severity and importance, they felt they needed someone who had gone down the road a few times with these transactions. TPI claims to have advised on over 550 sourcing transactions with a total contract value of more than US$330 billion since its inception in 1989.

“It is foolish, na

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