Carphone Warehouse made a critical culture change in order to resolve growing outsourcing problems, it has revealed.

Malcolm Robinson, head of commercial IT at the mobile phone and broadband retailer, said that in 2003 to 2005, the company had been receiving a poor service from its previous outsourcers, which were missing deadlines, and it was becoming involved in arguments with those companies. He did not name the providers.

But Robinson said Carphone Warehouse harboured the blame, and that after changing the way it interacted with IT providers, it is now receiving an improved service from its current outsourcers.

Speaking at the European Outsourcing Association's annual conference in London, Robinson said Carphone Warehouse was “in a much stronger place than we were three to four years ago”.

“We started by setting a clearer strategy of what we wanted from the outsourcing, and had more sensible conversations with our IT staff,” he said. “Then we made sure that selection processes were more rigorous and got a better understanding of how the different providers work. HCL and Infosys work very differently, for example.”

In the next step, Carphone Warehouse set out clearer accountability and tougher service levels in its contracts. The company made sure it retained the right IT team in-house to manage the outsourcers, and offered new jobs to those whose who were affected by the outsourcing.

“We made steps to nurture team work and partnership,” Robinson said. “We make sure our staff meet the outsourcers, and that cultural differences are understood.”

Carphone Warehouse took action to ensure the right basic IT infrastructure remained in place, he added. "And crucially we made sure we had strong governance,” Robinson said.

Carphone Warehouse works with Tata Consultancy Services for software testing, Infosys for data warehousing, warranty management and stock services, Patni for insurance, repairs and online services, Tech Mahindra for billing, Atos Origin for Oracle financial software, and HCL for networking services. It spent only £8.5 million on outsourcing last year, but this has grown from under £500,000 four years ago.

The company, which operates in seven European markets and generated revenues of £4bn last year, uses a service oriented architecture to develop new internal IT processes, and installed HP Systinet software to better govern that activity.

Last November, it said it had cut the time needed to extract business intelligence data from 12 hours to 30 minutes after upgrading to an improved data integration tool from Informatica. It also runs Enigmatec IT process automation and management software to improve its support for critical applications.

Earlier this month, Carphone Warehouse announced a large joint venture with US retailer Best Buy to sell consumer electronics goods in Europe.

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