Sharing the WorkBy Hailey Lynne McKeefry | Posted 2008-09-29 Email Print
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Sharing the Work
A second prong in Pitney Bowes’ IT strategy has been to outsource extensively. Several years ago, the company decided to give much of its application development and maintenance activities to partner Wipro.
“We felt it was important to look at opportunities that would enhance how we perform as an IT organization,” says Buoncontri. “Our view was that, going forward, our company would need more from IT in terms of innovation and solutions, especially those that our external customers could capitalize on. We wanted a model that would allow us to devote more mindshare to those areas and less to tactical work.”
The partnership with Wipro has allowed Pitney Bowes to leverage a variety of benefits, including cost savings, access to a larger pool of labor and skills, and a higher-quality end product.
“Wipro also made us adopt more stringent software quality measures, since it is Capability Maturity Model Integration (CMMI)-certified,” says Buoncontri. “Working with a partner that is certified at this highest level is a catalyst to get us to do it.”
The move to an outsourced model was difficult, especially since it decreased the size of the internal organization. (The IT department retained about one-third of its development activities and one-third of the staff members—those identified as being most important to the company.) To make it succeed, the department needed clear and consistent communication—both with internal IT employees and with Wipro.
“We needed a good idea of the outcomes that we wanted [from Wipro], and we needed to treat them as a true partner,” says Buoncontri. “This is not a customer/vendor relationship; it’s a strategic relationship that has to be balanced.” The goal was for both organizations to be equally involved and to share the benefits equally.
The new structure allowed Pitney Bowes to create a strategic IT plan that was closely mapped to the company’s business plan. “It also allowed us to create a new vision for the IT organization,” Buoncontri says. The vision involved transforming its business models through the strategic use of technology. “That’s something a company needs to do every five to seven years,” he adds.
A streamlined IT organization and strategic use of outsourcing has allowed Pitney Bowes to focus on implementing technologies to support the business objectives of the firm. In its initial forays, the IT department has focused on enterprise resource planning, customer relationship management, mobile capabilities and greater use of the Web.
“None of these technologies are revolutionary, but we know that the general landscape [of other businesses] is making greater use of these technologies, and we have to do that as well,” says Buoncontri. “We’ve demonstrated to our organization that we can perform in the first quadrant in terms of cost and productivity.”
In addition, the company has expanded its vision for the IT workforce and expects to focus on hiring businesspeople who know something about technology rather than the other way around. “We need to be more consultative and solutions-oriented,” says Buoncontri. “For example, rather than having people who are professionals in SAP and know something about finance, it might be better to have finance people who know a little SAP. That way, we can have a much greater ability to drive business outcomes.”
By leveraging a combination of technology innovation, strong planning, collaboration and strategic outsourcing in its IT department, Pitney Bowes is reaping benefits in terms of business growth. Its half-year results for 2008 show revenues of $3.2 billion—up from $2.9 billion in the same period last year.