Maintaining Control Over Outsourcing

Deck: 

Utilities can transform the business while managing risk.

Fortnightly Magazine - September 2005
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Utility companies have seen the advantages of outsourcing. They are moving aggressively to turn various operations over to outside service providers.

In a survey of 305 North American utilities, conducted in 2004, 51 percent of the respondents said they either had outsourced or were planning to outsource a customer-care function in the next two years.1 Another study found that 76 percent of surveyed utility companies already were outsourcing one or more of their major human resource (HR) functions.2 Bill print, credit and collections, and bill remittance marked other top areas that utilities have considered outsourcing.

Most recently, NiSource and IBM entered into an ambitious 10-year, $1.6 billion outsourcing agreement that calls for IBM to take over a variety of business support functions, including HR, finance and accounting, supply chain, customer care, billing and collections, and information technology (IT). The deal was expected to deliver more than $530 million in operating and capital cost savings across NiSource's 15 primary operating subsidiaries over the life of the contract, as well as technology advances and enhanced service capabilities.

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