How to Redirect a Project:

Present the Facts

For Peter Walton, CIO with the global energy company Hess, it was an uncomfortable moment when the idea to conduct a global efficiency study was first introduced at an executive meeting in June 2005. Hess executives planned to study the company's back-office operations such as finance, human resources and IT with the aim of outsourcing much of the work.

Walton wasn't against outsourcing - he had already contracted out some software development and was considering some other functions. And he was excited by the company's aggressive goals for improving its operations relative to its competitors. What concerned him was the approach - to hand the work over to a single vendor in India. Walton believed that the company should source specific functions to multiple companies that specialized in each area. Only after comparing the outsourcers' costs and service levels to its internal costs could Hess determine if the outsourcing could benefit the company. "In all my years of experience, nobody has headed into a project like this without having an outsourcing strategy, and we didn't have one," Walton remembers thinking.

Walton knew that simply stating his opinion would not convince anyone of a different approach. A more effective way, he thought, would be to put together a presentation detailing the latest expert opinions on outsourcing and delivering it to those managers in charge of the project.

Providing facts from experts, Walton believed, would remove any chance that his position would be viewed as subjective. The first person he would have to convince was the project manager in charge of the efficiency study, John Douglas. Fortunately for Walton, he had worked with Douglas on a project two years prior, and the two had got to know each other. "There was some trust already there," Walton says.

Back in his office, Walton combed through data he had collected during his three years as Hess's CIO and picked out some key points. He included in his report two slides from the Concours Group that he had saved from a presentation he'd seen at a conference a few months earlier.

One slide, titled "A Blunder: The Wrong Way to Outsource", presented the path that a global electronics manufacturing company took to outsource many of its IT functions. The company's new CEO had promised to cut IT spending by 18 percent, but the goal had no connection to the company's overall business strategy, according to the slide. Written on the slide were the consequences of the company's approach: The company lost some top employees as well as its reputation as a great place to work, and the company was reworking its outsourcing contracts.

The second slide presented another case study, this one of a global financial services company. The company's executives believed there was a looming shortage of critical IT skills that the company knew it needed. The company chose to outsource more than 60 percent of its IT staff to get those skills, giving the work to six vendors with operations in the United States, India, the Philippines and South America, which were chosen based on their expertise and cost. As a result, the company improved productivity, reduced costs and improved the level of IT skills available to them.

Walton sent the material to Douglas, who agreed to consider the more strategic view. After conducting additional research, Douglas brought in the Concours Group to make a presentation on sourcing strategy to the executive steering committee. Subsequently, Hess determined it would outsource different functions to separate companies specializing in the relevant fields.

"You need outside materials that have a wow factor that can hit [your audience] right between the eyes," Walton says. "When you're [looking at] a way of operating that is just like a case study that ended in failure, that's powerful."