CIO Magazine has
a fascinating article on the meltdown at AT&T Wireless.
AT&T Wireless's fall from greatness — and their now-pending Cingular buy-out — can be traced (in part) to their embrace of offshoring as a way to cut costs. Read on for more....
Part of the problem stems from the transition itself causing disruption in the home country, closest to customers. Here are three key paragraphs:
Christopher Corrado, the head of the security solutions practice for Wipro, an Indian offshore outsourcing company, was named executive vice president and CIO. Before joining AT&T Wireless, Corrado had been CTO at two divisions of Merrill Lynch, where he presided over the offshore outsourcing of portions of Merrill Lynch's IT. Employees speculated that it was just a matter of time before offshoring began at AT&T Wireless.
"Corrado was the hatchet man-everyone knew it," says a former employee. "We'd see our people going into these long meetings with people from Indian companies. We'd see whiteboards that had questions like, 'What opportunity do we have to offshore/outsource?'"
Former employees say morale wasn't helped by Corrado's first presentation to the IT group, in which they say he proclaimed, "Come in every day and expect to be fired." Intended to inspire the troops to greater effort, the talk backfired, says another former employee. "We all came away saying, 'Who is this arrogant jerk?'" Corrado could not be reached for comment.
There's more, much more, in the full article. Suffice it to say that AT&T Wireless's drive to roll out a new and complex customer service system (to support wireless number portability), build a new network, and (at the same time) lay off thousands of its workers (via offshoring) resulted in disaster and ruin.
Please note that I'm not suggesting offshoring is necessarily bad. Some jobs belong overseas because of comparative economic advantage. Free trade gives consumers choices, and, absent a compelling reason otherwise, I prefer trade agreements that fit on postcards and trade restrictions that fit on postage stamps.
Nonetheless, this cautionary tale should help companies understand that often you get what you pay for. Market leader Verizon Wireless has relatively little offshored customer service, and Verizon was a prime beneficiary of AT&T Wireless's woes, grabbing its customers. Verizon was recently named the best wireless carrier by Consumer Reports.
Finally, full disclosure: this article gave me a lot of perspective on my own, individual struggles with AT&T Wireless. I signed up with AT&T Wireless almost as soon as they introduced their innovative Digital One Rate plan some years ago, and I stuck with them for years. I paid a more-than-fair price for an excellent product. Then they went downhill, and I experienced many of the problems described in the article (jammed networks, poor customer service, etc.) I switched to Verizon Wireless in September (after a brief and miserable experiment with Sprint — I'm waiting for the $80 you still owe me, Sprint), two months before number portability. I'm happy with Verizon's service.
I wish Qualcomm didn't get all those royalties, and I wish CDMA were more of an open international standard, but in the United States Verizon rocks.