Fisher-Price Will Offshore IT to India

In the last two blogs I’ve written, I’ve reported that business among the top three Indian outsourcing companies–Infosys, Tata Consultancy Services, and Wipro–is up.

Count this one as the third such blog reporting such news. According to this story in the Buffalo News, Fisher-Price is outsourcing IT work to Wipro.

Founded in 1930, Fisher-Price is headquartered in East Aurora, N.Y., and has been a division of Mattel Corp. since 1993.

According to the article, there will be some impact on IT positions at Fisher-Price, but no official word as to how many. Also unknown is which IT functions will be affected. But one aspect that is known, according to the article, is that Wipro will take over technology operations currently handled in Phoenix.

But really, that’s not the purpose of this post. Really, it’s about making sure IT outsourcing and offshoring deals are rife with quality.

One would expect that Mattel will carefully and meticulously manage any IT outsourcing deals it makes. After all, it was the outsourcing of toy manufacturing to China that nearly did Mattel in.

Keep in mind that Mattel has been outsourcing manufacturing for a long, long time. In fact, I’ve read that the toy company started making Barbies in Asia as far back as 1959. All those outsourcing years—which presumably were successful—led to less-than-strict oversight of the vendors and suppliers building those toys.

And what happened in 2007 is that the toy company had to recall millions of toys for unacceptable levels of lead in their paint, among other problems. The recalls kicked off much more stringent processes and controls for managing their outsourcing operations. For example, it brought product quality testing in house, rather than rely on subcontractors to do it.

Clearly, companies that choose to outsource, and especially offshore, IT work must do their homework. They must be sure to evaluate a service provider to see whether that provider can meet the requirements specific to their needs – can they meet the scope of the project, do they have the necessary organizational and technical capabilities, what are their risk management strateties, do they employ six-sigma methods for measuring and managing execution of their contracts, are the service fees in line with what you want to pay? And finally, what quality of service agreements do they offer?

Quality is critical to the success of any outsourcing engagement. And remember, it isn’t only about the quality of work a service provider offers, or the quality of software they’ve created for you. The quality of an IT outsourcing agreement must be directly related to the quality of your business. After all, IT is a fundamental process on which your business rests.

If you outsource the making of gidgets or gadgets or Barbies, and the quality is bad, your business will be bad. If you outsource IT, and the quality is bad, rest assured, your business will be bad.