Salt River Project officials said Tuesday they decided not to outsource about 50 technology jobs, which the utility has been considering for several months.
After requesting information from local and global outsourcing companies earlier this year, SRP asked for formal bids from an Irish and an Indian company.
SRP could save money by outsourcing the jobs, but the up-front costs are too much for the company to take on during the current recession, Assistant General Manager Barbara Hoffnagle said. Outsourcing the jobs would cost money up front because the new contract workers would have to work side by side with SRP employees for about a year to learn their jobs, she said.
"I know there was initial euphoria among the employees," she said of the decision. "But the heavy lifting has just begun."
She said that after consulting with Accenture Ltd. of Ireland and Infosys Technologies Ltd. of India, she believes the information-technology department at SRP can make significant cuts to its $120 million annual budget.
The 40 to 50 jobs SRP was looking to outsource represent only a small fraction of that IT budget, Hoffnagle said.
"There were cost savings (with outsourcing), but not as high as anticipated," she said of the bids from Accenture and Infosys. "They certainly could help us."
Hoffnagle declined to answer how much money SRP could save after the first year by using one of the companies, or whether Accenture or Infosys presented a better offer.
She said outsourcing could be an option when the economy rebounds and the up-front costs are not such a critical issue. "Never say never," she said.
Like Arizona Public Service Co., the other Phoenix-area utility, SRP uses some workers from outsourcing companies for supplemental contract work in its IT department.
APS' Chief Financial Officer James Hatfield got in a heated debate with a state regulator in September regarding his company's outsourcing efforts.
APS asked all the companies bidding on contract labor for its IT department to provide rates for onshore and offshore labor, which Hatfield said was "the cheapest way to get the job done and keep the permanent payroll down."
Source: azcentral.com
