Arizona utility company outsourcing jobs to Indian bodyshops
Arizona utility company outsourcing jobs to Indian bodyshops
Date: Tuesday, August 18, 2009 12:28 AM
<<<<< JOB DESTRUCTION NEWSLETTER No. 2049 -- 8/17/2009 >>>>>
The Arizona utility Salt River Project (SRP) decided to outsource their IT
department to the two Indian owned bodyshops Accenture and Infosys. SRP
officials claim that outsourcing the jobs will save them money but they won't
say how much.
Barbara Hoffnagle, assistant general manager and chief information executive,
made a statement that on the surface seems to make sense, but upon reflection
is bizarre:
Some of the work that could be outsourced is done now by contract
workers, she said, but outsourcing could help SRP because the
utility would no longer have to manage the workers.
You can be sure that most of the decisions to outsource are being made by bean
counters with MBA degrees. Their degree is in MANAGEMENT, yet they're
complaining about the burden of having to MANAGE employees. Hopefully once
their computer people are fired SRP will decide to no longer burden the MBAs
by having to come to work because there are no more people for them to manage.
SRP paints an optimistic forecast of the fate of those who will lose their
jobs, but the reality will be quite different for most of them. Some of them
will lose their houses, but that will go unnoticed in the Phoenix metro area
where foreclosures are epidemic. Most of them will be hard pressed to find a
job in the depressed Arizona economy.
This is the type of standard boilerplate all companies tell the news media
when they are going to throw their employees on the street:
SRP officials said that between 40-50 jobs are at stake, but that
some employees who work in IT have been leaving for other jobs
because of the likelihood of outsourcing. Others are being
encouraged to seek positions in other IT areas that won't be
outsourced, Hoffnagle said.
Doesn't it make you feel good to know that SRP employees have been quitting,
ostensibly for high paying jobs, and undisclosed numbers of them will be
"encouraged" to find other types of jobs at SRP?
So, in order to save a fistfull of dollars, SRP is disposing a few dozen of
their American employees. Nobody including SRP seems to be concerned with the
fact that Indian nationals will control the computer systems for large parts
of Arizona's water and electricity infrastructure. To make matters even worse
Arizona residents who are captive customers of SRP will have no say in how
their personal data is used by the Indians. National security and personal
privacy always seems to play a back seat role when corporate profits are to be
realized.
In other SRP news: they are raising rates for electricity that will increase
their revenue by $200 million and they are applying for federal stimulus funds
(they haven't disclosed how many hundreds of millions of
dollars) that are supposed to be used to create jobs.
REFERENCES:
http://www.azcentral.com/business/articles/2009/08/10/20090810biz-srp0812.html
SRP considers outsourcing to save money
http://www.kswt.com/Global/story.asp?S=10853037&nav=menu613_2_6
Some question need for huge SRP rate increase
http://www.bizjournals.com/phoenix/stories/2009/07/13/daily72.html?ana=from_rss
Salt River Project applying for stimulus money; Arizona Public Service
considering it
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.azcentral.com/business/articles/2009/08/10/20090810biz-srp0812.html
SRP considers outsourcing to save money
40 comments by Ryan Randazzo - Aug. 10, 2009 05:27 PM The Arizona Republic
Salt River Project this week will send bid requests to two global consulting
companies to see if the utility can save money outsourcing about 50
information-technology employees.
Officials are considering the cost-cutting move because of sluggish customer
growth and said they have to pursue any reasonable option to keep utility
rates low.
A consultant's analysis showed that SRP spends more than the industry average
on its computer services, prompting the outsourcing plan, officials said.
They would not disclose what SRP spends on the IT work, saying that
information could influence how the companies bid on the job.
SRP officials have been interviewing outsourcing companies to see how they
would handle "selected" computer services, including maintaining the 5,500 or
so desktop computers used by employees and the customer-account system, said
Barbara Hoffnagle, assistant general manager and chief information executive.
If SRP decides to outsource, the contracted company will not deal directly
with customers, she said.
Based on the interviews, Accenture Ltd. and Infosys Technologies Ltd.
likely could do the work for less than SRP is spending, Hoffnagle said.
Both Accenture and Infosys operate globally and have a presence in Phoenix.
Accenture shareholders recently voted to move the company from a Bermuda base
and incorporate in Ireland. Infosys is based in Bangalore, India.
SRP officials said that between 40-50 jobs are at stake, but that some
employees who work in IT have been leaving for other jobs because of the
likelihood of outsourcing.
Others are being encouraged to seek positions in other IT areas that won't be
outsourced, Hoffnagle said.
She said SRP officials hope to move their existing workers into more advanced
computing jobs, and outsource the simpler programming.
"Our interest is not to lose SRP employees," she said. "Our interest is
keeping our knowledge inside. We like to keep our intellectual property inside
our organization."
Some of the work that could be outsourced is done now by contract workers, she
said, but outsourcing could help SRP because the utility would no longer have
to manage the workers.
"If we choose to outsource, it will be phased in," she said.
Accenture has done contract work for the utility in the past, including
developing parts of the customer system, Hoffnagle said. Infosys has not
worked for SRP before, she said.
A 14-member board of directors governs SRP, and those officials were briefed
on the outsourcing plan Monday. None raised objections.
When asked about the plan in May, SRP directors wouldn't speculate on how much
the company would have to save to justify outsourcing 40 to 50 jobs.
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.kswt.com/Global/story.asp?S=10853037&nav=menu613_2_6
Some question need for huge SRP rate increase
Associated Press - August 5, 2009 2:14 PM ET
MESA, Ariz. (AP) - A public interest lawyer and others are questioning why
Salt River Project needs an 8.8% rate increase during a down economy.
Arizona Center for Law in the Public Interest director Tim Hogan said SRP
doesn't pay taxes or shareholders and is paying less for fuel.
SRP officials say they need the rate hike to replace older power plants and
purchased power contracts that are expiring.
Hogan said if the utility had embraced renewable energy, it wouldn't need to
build new coal-fired plants.
If the utility's board approves the rate hike, SRP would take in an estimated
$218 million in additional income in 2011. An SRP spokesman said the typical
residential customer would see a monthly increase of $12.22.
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.bizjournals.com/phoenix/stories/2009/07/13/daily72.html?ana=from_rss
Friday, July 17, 2009
Salt River Project applying for stimulus money; Arizona Public Service
considering it Phoenix Business Journal - by Mike Sunnucks
Salt River Project is applying for federal stimulus money to upgrade its
electrical grid and substations. Arizona Public Service Co. is considering
applying for upgrade money from the U.S. Department of Energy, but has not
made a decision, said APS spokesman Alan Bunnell.
The federal government is doling out money to utilities and energy companies
through the American Recovery and Reinvestment Act to help upgrade their grids
and distribution systems.
SRP spokesman Scott Harelson said the utility is not yet disclosing how much
money it is seeking from the ARRA Smart Grid Investment Grant Program.
"SRP has filed a letter of interest indicating our intent to submit an
application for funds for smart meters and substation and distribution system
smart-grid automation," he said.
The Energy Department has $4.5 billion in such grants available for utilities
and energy companies aimed at improving electricity delivery, upgrading
systems and technology, and installing smart meters at customers homes to
give them better knowledge of their energy use.
East Coast utility Pepco Holdings is applying for $254 million in federal
stimulus grants to upgrade its various utility systems in Washington, the mid-
Atlantic and New Jersey. Baltimore Gas & Electric is asking for $200 million.
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