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Outsourcing has Increased IT's Level of Accountability to the Management: CIO of Consumers Energy

o Shweta Rao
23.01.2013 kl 22:06 | Computerworld India

The traditional full-term, fixed price outsourcing model has long been predicted by 'industry experts' as a goner. But despite the cash-strapped situation across industries today, 2013 has renewed the sense of hope among outsourcing vendors as many CIOs adopt a counter-intuitive approach to IT sourcing. Here's what Mamatha Chamarthi, CIO at Consumers Energy--a Michigan electric and natural gas utility, had to say on the resurfacing of outsourcing strategies in the new-age economy.

 

The traditional full-term, fixed price outsourcing model has long been predicted by 'industry experts' as a goner. But despite the cash-strapped situation across industries today, 2013 has renewed the sense of hope among outsourcing vendors as many CIOs adopt a counter-intuitive approach to IT sourcing. Here's what Mamatha Chamarthi, CIO at Consumers Energy--a Michigan electric and natural gas utility, had to say on the resurfacing of outsourcing strategies in the new-age economy.

How do you define the IT staff of a 21st century utility?

The IT staff of a 21st century utility puts communication on top of its priority list. It tends to use social media as its primary mode of contact with the outside world. This is one of the reasons we, as a utility company, had to adapt to this change and allow access to Facebook during company hours. This is a big leap from the times when we didn't have a policy on access to social media. The new generation decides upon its organization loyalty depending on the work-place culture and how it caters to their needs.

How has the end-customer profile of a modern utility changed over the decade, and how has it affected your internal processes?

A decade is only equal to three years in the IT world today. The last five years have seen a peculiar change in the behaviour of utility customers. All end-users today want utility companies to meet them where they are standing. They demand a host of real-time information over the Web with no patience for delays. This essentially means they want a seamless experience across all channels through which they interact with the world. And that, I'm sure, is a major challenge across industries.

When customers today want more information and show interest to interact more, the onus lies on us to provide for it. Customer demands today range from "give me my energy tip" and "tell me how I must use my smart meter" to "what pockets of the city face a blackout during a calamity" and other such queries. Today, words like "green thinking" and "energy efficiency" matter a lot. And we profile our customers in new age terms like "a single household", "a tech-savvy household", and a "green-thinking household".

Catering to their demands has led us down a path where our customer care processes have become equivalent to an enterprise in the retail or hospitality industry today.

Why did you opt for outsourcing despite the opposition prevailing against it?

The overall rate of service price increase that Consumers Energy offers its customer is below the rate of inflation, and that has a tremendous cost pressure on us. That's why we favour capital investments like outsourcing in IT to lower operational expenses.

Outsourcing has a stigma attached to it because it led to thousands of employees being laid off and jobs moving from the U.S. to Asian countries. But our partnership with HCL defies that traditional model of outsourcing. In our concept, our Michigan Technology Delivery Centre with HCL will create 500 new jobs by 2016 (through partnership with local colleges and universities). Also, we haven't laid off any employees, but have re-trained and re-skilled them to transition into newer roles.

What has the scenario at Consumers Energy been during and after this transition?

Consumers Energy has experienced tremendous growth in the last five years. We realized that we were leaving a lot of business value on the table because of our lack of staff capacity, even if we could afford new technological investments. We then decided to outsource our operations to HCL and moved our staff capacity into newer projects such as smart grid, automated metering, and security-related infrastructure.

Contrary to popular views, this move has increased IT's level of accountability to the management. As a result, we take compliance and regulatory changes more seriously than ever. Frequent regulation changes go through a more agile process to accommodate these changes into our system today. The offshore HCL center works with us in a virtualized environment and so, all of us receive real-time updates 24x7.

Shweta Rao is a correspondent for CIO India and ComputerWorld India. Send your feedback to shweta_rao@idgindia.com.

Keywords: IT Management  
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