Do You Know What You Need to Know?

One of the biggest issues in offshoring is the fact that very few IT departments have decent documentation on their systems. You have to know what you know about a system or process before you can communicate that information to an outsourcer.

That lack of internal knowledge doomed the offshoring of Lehman Brothers' IT help desk to Bangalore-based Wipro Spectramind. Jonathan Beyman, CIO of Lehman Brothers, had already decided to outsource the maintenance and support of a mainframe settlement system (which records the receipt and delivery of securities and money for the company's fixed income and equities businesses) to Wipro's system development arm. At the same time, he decided to send the New York help desk for Lehman's 7500 employees to the Indian vendor's technical support division, which he thought would be a pretty straightforward affair.

He was wrong.

It turned out Beyman didn't fully understand the nature of calls made to the IT help desk or the requirements Wipro would have to meet to respond to them. He underestimated the complexity of internal help desk calls, as well as the training and process documentation that would be required to make the offshoring work. As a result, Lehman found that service levels were abysmal, and Beyman wasn't saving money - his objective in offshoring the help desk. So last December, "after eight months of banging our heads against the wall", Beyman pulled the plug. When he went in to tell his CEO, Richard Fuld Jr, about his change of heart on the offshore help desk, Fuld called in his assistant, who promptly kissed Beyman on the cheek in gratitude. Although Beyman had retained a skeleton staff of 12 help desk employees in New York and had built the insourced help desk around them, he had to hire 20 new employees, since those he had retrenched nine months earlier were no longer available.

In retrospect, Beyman admits he was surprised. "I would have thought that the help desk would have been easier to transfer offshore," he says. "But it turned out we had a much better idea of what goes on in our settlement systems than we did in our help desk." The company still offshores application development and maintenance of several systems, including the mainframe settlement system, to 400 workers at Wipro and Tata Consultancy Services as part of two contracts costing approximately $US70 million. The business processes supported by the settlement systems were mature, well understood and decently documented. "As a consequence, it was far simpler to move the support of these types of systems offshore," Beyman adds.

But even with mature applications, internal documentation can be hit or miss. Sixty percent or more of the knowledge of legacy systems is sitting in someone's head, according to Steve DeLaCastro of Tatum CIO Partners, an IT professional services provider and consultancy. "If there is any [documentation], it was probably done 20 years ago by someone on the verge of retirement - you know, the kind of person that if they were ever hit by a bus, the whole company would go down," he says.