No Treat, Just Trick

On Halloween evening, the project team tried to bring up the new Siebel system for the first time. It crashed. "It went down and stayed down," says a former employee. "They couldn't get it working again." Project staffers were brought in to work on the system for three straight days to try to rescue it, with no luck, say former employees. The system was unstable.

Though observers could not trace specific causes for the crash, a few factors played a role. As the go-live date neared, former employees say that Deloitte and Touche project managers relaxed testing requirements for various pieces of the system. Rather than freeze the code for the system once problems began, teams continued to add new pieces to the project in an attempt to get it all working. But the new pieces simply added more errors to an already bug-ridden system, which complicated the process of finding root problems and fixing them.

"[Integration was] far more technical and far more difficult to test in advance and also fix problems once they appeared," acknowledged Michael Keith, president of AT&T Wireless Mobility Operations, in a conference call on the company's fourth-quarter results.

Compounding these difficulties was the hit employee morale had taken on November 16, when AT&T Wireless president and CEO John Zeglis confirmed the lay-off rumours. Zeglis told analysts in a third-quarter conference call that the company would lay off 1900 workers. He did not say where the cuts would come or when. But IT managers started telling employees that lay-offs would begin in February 2004, according to former employees.

Some AT&T Wireless IT employees had got hold of a report prepared by Tata Consulting Services of India outlining plans for offshoring pieces of AT&T Wireless's IT infrastructure. The report, obtained by CIO (US), also lays out plans for offshoring a portion of the support and maintenance for the new Siebel system. "You had to wonder why you were working so hard if the whole thing was going to go away anyway," says a former project employee.

On November 19, The Wall Street Journal ran a story on planned lay-offs and outsourcing at AT&T Wireless, and CIO Corrado responded in a memo to the staff: "We are in the awkward position of having reports in the press about a contract with HP before we have communicated with the employees who will be affected. We have just today signed a letter of intent with HP to deliver the services provided by the following teams: Desktop Services; Retail Field Services; Business Office WAN/Telecom; MSI Packaging; Service Desk-password reset and desktop calls." But as for bigger questions, namely that support and maintenance for the Siebel system would be outsourced to offshore providers Wipro and Tata, Corrado did not address the rumours directly. Instead, he concluded: "We currently outsource work throughout the company, including work within both Customer Services and IT. We will continue evaluating the best mix of internal and external resources as we work to achieve best-in-class margins."

In fact, AT&T Wireless was planning to move overseas more than 3000 positions in its computer operations and customer service.