First of all, Hutchison didn't release a tender. It approached Ericsson, the company building the infrastructure, to sign a longer term contract. "We went to Ericsson, and we didn't go to anyone else. They didn't have to bid, or compete," said Young, adding that Hutchison had taken the view that if Ericsson wasn't interested the outsourcing simply wouldn't occur.
Central to Young's view was the idea that the outsourcing contract had to benefit the vendor as much as Hutchison. It took several months of workshops before the contract was signed because Ericsson "struggled" with it, according to Young.
"They had an [outsourcing] model that was successful around the world, but Hutchison didn't want that," said Young. The workshops determined what both Hutchison and Ericsson's main objectives were, which created a base level to return to when disagreements arose.
Hutchison was looking for the ability to support rapid change, to control costs and to protect Hutchison intellectual property. Ericsson wanted to support the global push into services, leverage their existing infrastructure and create a re-usable model. They both wanted the model to scale according to need and to share future benefits - which required a new culture, according to Young.
Young wanted the two companies to work together as a team rather than both trying to get the greatest benefit from the deal at the expense of the other. "If we increase our revenue in this area it is because we are growing, and that success needs to be shared," he said.
The two companies created a separate entity called the "Hutchison Practice" which is dedicated to Hutchison from within Ericsson Managed Services. The team consists of Ericsson and Hutchison technical staff, with a governance team that is chaired by the Hutchison CTO. Hutchison retained staff who drive the end solution and decide the strategic direction, while the Hutchison Practice team support the direction provided by Hutchison.
The end result was a contract that included fixed fees for fixed services, with the flexibility to change that if the need required. There is also a "prenuptial", so a graceful exit from the contract is possible if required.
Young said there were efficiencies to the system, the most obvious of which was that both companies were employing people to check up on the other company, and ensure they did what they said they'd do. Those positions became redundant. However, any of Hutchison's staff that were not required under the new model were picked up by Ericsson.
"It hasn't worked all the time and what's kept it together is the fact that we haven't tried to take advantage of each other," said Young. "We needed to be sure there was complete honesty in our dealings."
"Just like a family, there are times when you feel let down, you have to make sure it's the exception not the rule and you get past it," said Young.
Young claimed the result of the joint-venture style outsourcing agreement between the two companies was positive. "We maintained service levels at Orange and managed to launch 3 with reduced costs," he said. He said the streamlined organisation led to fast decision making and eliminated turf wars between and within the two companies. They had also been able to reorganise resources according to need rather than structure, said Young.
If the two parties were starting over, Young said there were only a couple of things he would do differently. First, he would spend more time on process and service level agreements at the beginning, as the failure to complete these satisfactorily led to a lot of people being unsure what they were supposed to do, and what was considered important.
He would also ensure there was better communication to the business and the staff of the advantages of the new processes. Young said the collaboration was not explained well enough, and people within the two businesses kept "throwing rocks" at the other side.
"You cannot over communicate to staff," he said, adding that the shock of suddenly receiving a pay slip from Ericsson was tempered when staff realised the career opportunities were better in the latter company.
