CIO deletes e-mail outsourcing contract

CIO Vic Fischer pulled the plug on an e-mail outsourcing contract when he realized it was adding to the user confusion it was intended to fix.

Colliers Parrish International knows how to close a deal. A real estate firm in northern California with 500 employees and 12 offices, the company grossed $85 million last year.

When it came to outsourcing its e-mail, however, IT Vice President Vic Fischer ultimately decided the real estate firm would be better off walking away from a potential outsourcing contract—despite a lot of internal pressure for a quick fix.

I still have guys who see an e-mail from IT and they delete it without reading it.
Vic Fischer
CIOColliers Parrish International

To be sure, Fischer, was up against some unusual circumstances. Months before he arrived, Colliers had decided to convert from Windows NT4 and Exchange 5.5 to Windows 2000 and Exchange 2000— "a major boundary to cross", Fischer said.

Just after the project launched, a management shakeup resulted in 80% of the company's top executives leaving the firm.

When Fischer was hired as the new CIO, the $50,000 project had not only slowed to a crawl but the IT department had "lost a lot of credibility."

Fischer got to work. When the conversion was completed, he was urged by users to find a way to stabilize the system, which had suffered almost daily outages during the early part of the project.

Fischer went outside for the fix, to CenterBeam, an IT outsourcing firm in San Jose. Unlike other companies that had pitched Fischer, CenterBeam was willing to take on pieces of the projects; other companies insisted on an all-or-nothing basis. "And one of the pieces they were willing to do was stand-alone Exchange support," Fischer said.

This was critical for a firm whose top guns were a lot more interested in making deals than figuring out new technology, said Fischer. "I still have guys who see an e-mail from IT and they delete it without reading it."

Indeed Colliers likes to recruit experienced people, and some of the firm's biggest dealmakers learned their trade on the telephone—without the help of a computer.

The company did not use what many businesses consider core business applications, said Fischer, but e-mail had become a critical tool. "It was a big deal for our users."

Colliers and CenterBeam agreed to go ahead in March 2004, a decision made easier by the IT company's unusual guarantee – that Colliers had the right to cancel, provided they gave advance notice.

"As we went along, we found the whole process—both the conversion and the ongoing support—was less transparent than we might have liked," said Fischer.

Moving from the Colliers domain to the outsourcer's domain might be transparent to the outside world, but for Exchange it was anything but, said Fischer. Saved e-mails had to be re-validated. "And like most real estate brokers, they saved bloody everything," he said.

CenterBeam promised it would hold training sessions, but this too proved challenging for Collier's widely dispersed offices. Audio conferencing held little appeal for realtors who thrive on face-to-face contact.

Even when people signed up for training, there was no guarantee they'd show, said Fischer. "The viral approach is much more effective for us. You talk to the influential guys and they tell the guys next them, and the more you repeat it --the more it sinks in."

As weeks passed, Fischer began to see that the e-mail outsourcing contract had the potential to add more confusion at a time when the firm was already undergoing massive changes. "And this put me right back in the situation I was trying to avoid—uncertainty and turmoil and people not getting what they need."

In January, Fischer opted out of the CenterBeam contract, adding that he would still recommend CenterBeam to other companies looking to outsource. "They have a lot of smart people who do a really good job leveraging technology."

The view from CenterBeam? "We don't kiss and tell," said spokesman Brian Johnson, adding that the CenterBeam has a 97% customer satisfaction.

The company calls on "a lot more prospects than we close," he added. It has most success when it can deal with a "single point decision maker" at the executive level.

Real estate agencies may pose unique IT challenges, said Chris Ambrose, research director for Gartner Inc. But Colliers is not alone, he said. Despite an e-mail market in flux, the growth in e-mail outsourcing as a discrete service "remains sluggish," Ambrose said.

The Colliers' case raises one of outsourcing's major issues, Ambrose said. "One of the big questions you face is this: 'Will your people sit down and understand how it operates?' ''

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