Lehman Brothers Holdings is not ending or pulling back on outsourcing. Charlie Cortese, its managing director for information technology, asserted that "overall numbers involved in outsourcing will go up next year".
These remarks, came through a conference call after two US news services reported that the Wall Street-headquartered financial services firm was ending a business process outsourcing project with Wipro because of quality considerations.
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Lehman Brothers is only in the process of ending its helpdesk - a small call centre -- which accounts for a mere 5 per cent of total work outsourced by it.
Of the 450 people involved with outsourced work, only 26 or 27 will be affected by the decision, Cortese clarified.
The deal involves several projects and Lehman was not happy with only the BPO project. "We are new to outsourcing. This one didn't work for many reasons. Perhaps we tried to do too much too quickly." They will go over all that was done and find out why the project did poorly.
Cortese sought to distance the company from the stories, which referred to quality problems. The remark was made "out of context," he asserted as the person who had "complete knowledge" of the project.
What the person concerned (the source for the US stories) should have said was "we were unhappy with the performance of the project, not the quality."
Some projects simply don't do well. Maybe they were trying to outsource without good processes being in place and for the project to perform well more training was needed.
Importantly, Cortese clarified that there was no union pressure, which led to the decision to end the project. In fact, there are no unions in Lehman Brothers.
"We are happy with our relationship with Wipro; our work with them is going up," he added. The overall deal spans the entire range of services offered by Wipro -- applications development and management, infrastructure services, BPO and consulting.
When the deal was struck, it was anticipated to result in up to $70 million worth of business in a year for the two partners (Wipro and Tata Consultancy Services).