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Free of charge: Manufacturing Success - Two Pronged Strategy for IT Infrastructure Outsourcing

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This article by Kathleen Goolsby looks at the experience of Lear Corporation, the world's Largest Automotive interior Systems Supplier, working with Compuware Corporation to deliver an outsourced solution to increase Lear's flexibility to adapt to changing business operations. 'When you're serving customers like Chrysler, Ford, and GM,' explains Brian Vautaw, vice president of Information Technology at Lear, 'you really have to be able to turn on a dime to accommodate their changes.' (PDF file, 2 pages, 168 KB).

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Unformated preview of the document: 'Manufacturing Success - Two Pronged Strategy for IT Infrastructure Outsourcing' (Part 1):

Manufacturing Success
Two-Pronged Strategy for IT Infrastructure
How Compuware's Outsourcing Services Enable Lear's Business
By Kathleen Goolsby, Senior Writer
Unlike people or vehicles - which can go in only one direction at a time -
companies must be able to quickly move in several directions simultaneously.
IT is the prime enabler of latitude for multi-directional objectives, but it also
creates new risks at various stages of the software and hardware lifecycles.
Lear Corporation, the world's largest automotive interior systems supplier,
enjoyed record net sales (up by nine percent) in 2003, saw its stock go up by
80%, increased its customer satisfaction levels, and achieved milestones in
setting the stage for future growth. Obviously, Lear has an effective business
solution for minimizing the risks in its enabling IT infrastructure.
Lear tapped Compuware Corporation in 2001 for an outsourced solution to
increase Lear's flexibility to adapt to changing business operations. "When you're serving customers like Chrysler,
Ford, and GM," explains Brian Vautaw, vice president of Information Technology at Lear, "you really have to be
able to turn on a dime to accommodate their changes."
The original objective that drove the Fortune 500 manufacturer to
consider outsourcing started with a corporate decision that the
particular ERP system Lear was using had become non-strategic and
would be replaced with a new system. For the existing system,
Vautaw says they would "put a box around it and not grow it - just
maintain it." Given that situation, Lear's internal IT professionals
supporting that system would be in a position of not having much of
a career path and would simply be in maintenance mode.
Lear cares about its employees' careers and welfare; the company
also recognized that such a scenario would likely trigger attrition,
eventually increasing the costs of maintaining the old system. But
outsourcing and transitioning the Lear professionals to Compuware,
which excels in maintaining legacy systems and giving IT
professionals the opportunity to learn and use new technologies,
would provide excellent career paths for the Lear employees.
"We decided to outsource because it provided a win all the way
around," says Vautaw.
Management at both companies placed considerable effort into
upfront communications about what Compuware is all about and
why the change would be a win for Lear's IT staff. Basically, they
would be doing the same work, sitting at the same desks, but have a
different project manager and a different company's name on the
paycheck.
Impact of Outsourcing on Managing
Operations
Buyers shifting to an outsourced solution
usually encounter situations where the
outsourcing provider's project
management and people management
approach is more formal than the buyer's
normal approach.
The service levels agreed to in an
outsourcing arrangement usually are at a
higher level of performance than existed in
the buyer's organization prior to
outsourcing.
The outcomes achieved by both of these
scenarios will be noticed throughout the
buyer's enterprise and are likely to impact
the operations of other internal processes
and people's performance levels. As
explained by Todd Furniss, COO of Everest
Group, outsourcing has significant impacts
on the departments "left behind."
Outsourcing the Risks for Outgoing IT Systems
The five-year outsourcing agreement's original scope was for production support (break/fix) with minimal
functional enhancements of the system. But, as often happens with ERP projects, the planned five-year
implementation of the new system has been slower than anticipated.
At Lear, everyone's job is affected by new procedures and processes because of the new system; all must learn the
new way to perform their jobs before the replacement system is turned on. Training takes place in each of the 280
Lear manufacturing facilities in 33 countries as the new system is put
in place.
The unanticipated challenge of a longer timeline for system
implementation has made the outsourcing to Compuware more
strategic. Compuware's scope was increased to include new
development projects to enhance the old system in order to keep
pace with the needs of end users not yet transitioned to the new
system.


Unformated preview of the document: 'Manufacturing Success - Two Pronged Strategy for IT Infrastructure Outsourcing':  Part 2

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