The Gamble of Going Global

"We identified nine different vendors. Two were global consulting firms—Accenture and IBM Global Services. The other seven were based in India," said Nelson. "We went over and visited everybody in India. We narrowed it down to four, then sent our IT managers to tour the final four: Wipro, Infosys, Cognizant and Accenture. All were really good—CMMI Level 5."

Cognizant won the deal, which was signed in June 2004. Some 300 Cognizant employees now work for Indymac.

Building the team

While all these companies have taken different approaches to globalization, executives agreed that building a team is necessary to make outsourcing work, and that means ironing out cultural and communications issues early.

"We spend a lot of time with Cognizant on governance structure," said Indymacs Nelson, describing how he formed a team in Los Angeles of 10 Cognizant people and 20 Indymac employees. That group is broken up into smaller teams to manage specific projects, Nelson said. In addition, about 100 Cognizant workers came from India to work in the Indymac building.

Nelson sent a native Indian who had worked for eight years in IT at Indymac to India as the banks liaison to Cognizant. "Hes our country manager there. He works with the vendors in India. Hes our primary point of contact," said Nelson.

ABN AMROs Rosenthal recognized early that his vendors—all of which are rivals—had to work together.

Soon after the banks deals were signed, Rosenthal called a meeting that brought together all ABN AMROs sourcing providers in one room, even though it was a bit awkward. "The first one we had was like a junior high school dance," he said. "Weve had a couple since then. These are companies that compete aggressively with each other. They know the secret to our being successful is them being successful," Rosenthal said. "They understand that their polite cooperation is critical."

But Jacobs said that the bank needs more than a handshake. ABN AMRO drew up so-called operation-level agreements that set out ground rules for how the different contractors will work together. "Getting the vendors to work together on operation-level agreements was a big challenge," said Jacobs. But, he added, such a measure was necessary. "The suppliers work for us; if they dont get it done, we can change them."

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