A botched software project cost AT&T Wireless $100m in lost business, according to a post mortem by CIO magazine. But the magazine also points to outsourcing as a factor: as IT staff struggled to fix the buggy software, the company's CIO - an offshoring evangelist - motivated them by telling them that their jobs were about to disappear.
The carrier was paralyzed by glitches in its number portability project last November, which led to support staff being unable to deal with customer queries for a week. Almost everything that could go wrong, did go wrong with the company's CRM software. AT&T Wireless already had a mammoth task before number portability was introduced, as it introduced a GSM system alongside the older TDMA system it was intended to replace. AT&T chose a number portability system from NeuStar rather than Telecordia, used by the other carriers.
However a new CIO appointed in April 2003 from Indian offshoring firm Wipro had his own techniques for motivating the IT staff, which borrowed heavily from Dilbert's Pointy Haired Boss. At Merrill Lynch, Christopher Corrado had been responsible for sending tech jobs offshore.
"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," reports CIO magazine.
AT&T Wireless was planning to shift 3,000 tech and customer support jobs offshore, and had earmarked 1,800 when Corrado was appointed. Around a thousand jobs have already been transferred.
"Postpone layoffs and offshore outsourcing until a vital systems project is completed," advises the magazine, which also adds that senior executives have been seeking their own escape hatch from the company.
As a result of the debacle AT&T Wireless missed out on capturing new customers, and only signed a tenth as many as Verizon in the final quarter of last year. This morning, the company said that it lost 367,000 subscribers in the first quarter of 2004, compared to 257,000 gains in the same quarter a year ago. However Executive VP Corrado has won himself a small place in the Motivation Hall of Fame. ®