Lands' End Inc. is in its fifth year of
offshore outsourcing, and the retailer says the benefits have far
outweighed the challenges. "When we have new projects or we're
looking to turn over legacy support, what we tend to do now is say,
'Let's look at offshore first,'" John Loranger, VP of IS at Lands'
End, said Tuesday at a conference in Chicago. Not all projects are
appropriate for offshore outsourcing, but in many cases, it's more
cost effective and can help free up IT staff to work on strategic
initiatives, he said.
The Dodgeville, Wis., retailer is working with Covansys Corp., a
U.S. outsourcing and IT services company with three development
centers in India. It initially hired Covansys in 1997 for its Y2K
initiative, which included analyzing 6 million lines of Cobol. That
gave Lands' End an outside group of workers who understood the nuts
and bolts of its legacy systems. Not wanting to waste that
knowledge, the company cherry-picked some of the best workers from
the Y2K project to work on other projects--some onsite, some
off-shore. Most of the project managers and analysts are local,
while much of the coding is done offshore--the ratio of off-shore
workers to on-shore workers at Lands' End is about 4-to-1, Loranger
said.
Covansys' work for Lands' End includes enterprise data warehouse
development and CRM development projects. "We're integrating them
with our own staff just like we would with a local contracting
firm," he says. Many of the retailers' core systems were built 15 to
20 years ago, including order entry, batch-order processing, and
order fulfillment systems. As the company decides when and how to
replace those systems, it can lighten the load of internal IT
staffers by using offshore outsourcing to support legacy systems
needed for day-to-day operations. And if additional IT skills are
needed to handle the replacement of legacy systems, off-shore
outsourcing can help, Loranger said.
Offshore outsourcing also has helped Lands' End improve internal
IT processes, Loranger said. "Our IT processes were pretty loose and
pretty informal" five or six years ago, he said. In addition to
providing thorough documentation of legacy systems, Covansys'
employees helped bring more structure into Lands' End's development
and testing methods.
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