| |Cathay Pacific |
To: Edward Nicol, Director of IM
From: Anthony Yeung, General Manager of IM
CC: Jakob Iverson
Re: Cathay Pacific Outsourcing Process
Once again, welcome back to Cathay Pacific! I thought I would take time to articulate the current state of Cathay’s outsourcing processes and more importantly present my recommendations to revise our methodology in managing our strategic partners that will enable future success.
Understanding we are in ...view middle of the document...
We need to assess on what we will need to support Cathay in the long term. It is critical our team develops an understanding of emerging technologies and how they could relate to Cathay. We need to take the leadership role with regards to technology alternatives and show the value to the enterprise. This is clearly not a role for a third party.
2. We did not issue RFP’s or obtain bids from other vendors when we outsourced to IBM and SABRE. This was clearly a mistake. However, going forward, we need to develop a procurement process that draws out competition, one that will enhance our overall solution, and one that its performance can be objectively measured. With that being said, I recommend we review our “smartsourcing” contracts. We are almost six years into the contract and our business climate and technologies have changed. Originally, IBM had to offer fees that were 10-15 percent below our in-house cost. Was this the right percentage? Was it understated? Was it measured? They had to provide equal or better service than was existing in-house. A strategic alliance needs to bring value to both parties. I understand that we can’t go back. However, we need to assess the value that it is bringing to Cathay. Going forward, we need to accurately assess our value and worth prior to going to market. We also need to develop measureable metrics and conduct regular service reviews to ensure we are collectively working towards or above our expectations. We need to keep in mind a third party...