Carphone Warehouse's 'bumpy road' to outsourcing success

Carphone Warehouse has revealed how it overcame teething problems in its use of outsourcing.

The mobile phone retailer has come a long way since 2003 when it first laid out a few hundred thousand to outsource its software development.

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Malcolm Robinson, head of Commercial Group Information Services at Carphone Warehouse, said the company got off to a bumpy start with outsourcing.

Speaking at the European Outsourcing Association Summit 2008, Robinson said: "The road to get here was very, very bumpy. At the start quality was poor, timescales were missed and generally things were not going right. Now when a piece of work comes up we immediately think is there a partner that could help us do this, two or three years ago that would not have happened."

By increasing its service level agreements, working more closely with providers and introducing strong governance and monthly targets, he said the company had turned its outsourcing fortunes around.

From 2006 to date, the company has outsourced an increasing number of services, including software development and testing, product and incident management, some infrastructure support and a limited amount of IT consultancy.

The company uses some Indian providers, outsourcing testing to TCS, some level one and two infrastructure to HCL and service development to Atos Origin, Tech Mahindra, Infosys and Patni. Last October it signed a $200m outsourcing contract with Patni for services including application development and maintenance and systems integration.

Robinson said the company would be looking at rationalising the number of providers it relies on over the next 18 months.

Carphone Warehouse does not micro-manage its partners, rather it sets them clear service level agreements that are reviewed each month and then leaves the outsourcer to decide how to meet them, he said, adding that it builds guarantees into its contracts that pushes providers to take on more processes for no extra money as they automate more services.

He also stressed the importance of a rigorous selection process for providers, clearly delineating who was responsible for what processes, putting the right team in place to manage outsourced services and building the proper communications infrastructure.