Turning an Outsourcer Into a Strategic Partner

How Hallmark Cards transformed an outsourcing relationship from one that just supplied IT support into a partnership that provides strategic advice.

Emailed thank-you notes, texted birthday wishes and Skype on Mother’s Day mean that Hallmark Cards must grow beyond paper and licked envelopes. There’s still a market for physical cards—just ask your favorite valentine—but for 10 years, revenues at privately held Hallmark have been flat at around $4 billion, according to Hoover’s, an online provider of business information.

But expanding Hallmark’s digital product line beyond basic cards was a four-year journey that included a revamp of its IT infrastructure. Hallmark tapped its application support and maintenance provider, Infosys, to help it conceive and carry out technology improvements aimed at bringing in new revenue, reducing costs, and improving performance and stability.

However, Mike Goodwin, Hallmark’s CIO, says Infosys’s transformation from commodity IT service provider to business partner was gradual. First, Hallmark added development duties that it directed. Today, Infosys helps vet ways to architect applications for new consumer products, including a mobile initiative planned for this year.

“We included them in business meetings. They would bring ideas and helped us find ways to achieve goals,” says Goodwin.

Better Customer Experiences

Like other outsourcers, Infosys has steadily added enterprise architecture and business-process consultants to attract longer-term and more lucrative senior-level relationships, says David Rutchik, a partner at outsourcing advisory firm Pace Harmon. CIOs who want that type of support must be willing, as Goodwin was, to reveal the internal workings of the company, such as its five-year plans and growth projections, says Rutchik.

An early Infosys contribution was to advise Goodwin on how to re-architect Hallmark’s e-commerce applications. During peak periods such as Valentine’s Day, customer orders could take several minutes to complete, and sometimes the site didn’t respond. “It doesn’t take much to lose a consumer with one bad digital experience,” Goodwin says.

At the time, Hallmark was using IBM’s WebSphere server with many homegrown features added, such as one that reminded customers of upcoming occasions. Infosys helped validate Hallmark’s switch to a software-as-a-service version of Microsoft’s Commerce Server and add the reminder feature through a third-party module. Using less custom code resulted in faster, more reliable performance, according to Goodwin. The improvement, he says, helped to convert 30 percent more browsers into paying customers last year than in 2009.

Now Hallmark has added digital products such as personalized paper plates and subscriptions to cards featuring Disney characters. Promotions, too, are part of Hallmark’s strategy to keep people coming to the site throughout the year. For example, for a contest in May, customers uploaded personal photos to create a funny card. The winners, to be announced this month, will get $250, and Hallmark will sell the cards online.

Follow Senior Editor Kim S. Nash on Twitter: @knash99.

Copyright © 2011 IDG Communications, Inc.

7 secrets of successful remote IT teams