During the first year, HP also met or exceeded P&Gs "critical measures" such as service level availability and problem resolution time in 95.78% of cases, according to the two companies. During the last six months, the average was 97.41%.
"Weve been very careful not to disrupt service levels," Talbott says. "Our approach was not to move operations right away. Its not uncommon that after you move operations, service levels decline."
Just as important: not disrupting people.
"The big goal for us was making sure that employees who came to work August 2 last year didnt notice anything different from August 1," says Damon Jones, communications manager for P&G Global Business Services. For HP, the P&G deal is critical in its quest to be taken seriously as an alternative to services giants such as IBM and EDS. The August 2003 deal was the first big splash for the companys services business following its merger with Compaq Computer, which gave HP a total of 65,000 consultants, a large number but roughly half of IBMs or EDS army.
Recognizing that HP was a cultural match but new to large outsourcing pacts, P&G deployed a "two-in-a-box" system. The setup paired an HP manager with a P&G counterpart to manage the transition on fronts such as human resources, technology infrastructure, applications and contracts. HPs role was to figure out how to make the transition, with P&G taking a support role. In areas where HP had little expertise, such as the contents of P&Gs 5,000 technology contracts globally and their various regulations and tax rules, the consumer-goods giant took the lead role, Clement-Holmes explains.
HP has thrown more resources at P&G than expected, Talbott says, but he wouldnt describe the number of additional people or the amount of extra money devoted to its tasks. For the second quarter ending April 30, HP Services revenue grew 15% year-over-year to $3.5 billion, with an operating profit of $329 million.
For P&G and HP, much of the first year was spent putting more rigor behind project management processes. The biggest move was to create a project management office that will oversee tasks such as upgrades to SAP software, revisions to the data warehouse architecture, and the integration of the operations of beauty products company Wella, which P&G recently acquired, into its systems.
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