October 21, 2014

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Latest News, Massachusetts

Charlie Baker Tries To Hide From His Outsourcing Record

In tonight’s debate Republican Charlie Baker continued to make false claims about his “jobs” record.

Here’s the truth:

Baker outsourced jobs and was so good at it that he won the Outsourcing Excellence Award at the “Oscars of Outsourcing.”

Baker was pressed on this record by moderator Margery Eagan, asking what he was he thinking getting dressed up in a tuxedo to accept the Outsourcing award “like it was something to celebrate.”

“Charlie Baker’s jobs record is clear: he outsourced Massachusetts jobs to India, while his own salary tripled.” said DGA Deputy Communications Director Sabrina Singh. “Winning an award for outsourcing might be something Baker’s proud of, but it’s bad news for Massachusetts middle-class families who needs someone to fight for them, not just the special-interest insiders he represents.”

Watch the video here

TRANSCRIPT:

EAGAN: “Charlie when you rescued Harvard Pilgrim you also outsourced jobs to India and you shut down an operation in Rhode island that cost about 1200 jobs, so the same question I ask to Martha I ask to you, why should people have confidence that you can create the jobs you claim you can in the private sector and public sector?”

EAGAN: “One quick thing about the outsourcing, I get your explanation that you had to save Harvard Pilgrim, what I don’t get though is the picture I’ve seen of you when you got dressed up in the tuxedo and you got an award, the Outsourcing Excellence Award, like there was something to celebrate about outsourcing jobs out of the country.”

Background

Harvard Pilgrim Won “Outsourcing Excellence” Award For Its Contract With Perot Systems. In 2008, Outsourcing Center – then an Everest Group Company – awarded its “Best Partnership” award for Outsourcing Excellence to Harvard Pilgrim and Perot Systems. The award citation noted that “U.S.News & World Report named Harvard Pilgrim Health Care (HPHC), the No. 1 commercial health plan for the last three consecutive years. That’s a dramatic recovery from the deathbed days of 1999 when the insurance company lost $227 million and fell into receivership. Outsourcing turned out to be the transfusion it needed… Today, Perot has 640 employees processing over 10 million claims annually for HPHC. Harvard Pilgrim also outsourced its IT operations and application development to Perot Systems. The service provider is supporting over 2,000 end users.” [Outsourcing Center, 8/1/08]

  • 1999: Harvard Pilgrim’s Information Systems Employed 1,100 Workers When Baker Approved Outsourcing Contract With Perot. “Baker promised an eventual end to the technical snarls that have plagued the health plan for years. His plan involves outsourcing tasks to Perot Systems Corp., based in Dallas. The $300 million, five-year contract calls for Perot Systems to take over Harvard Pilgrim’s computer systems, process all claims, maintain and upgrade the computers, and manage the large databases containing the company’s medical and financial information. It remains unclear whether the 1,100 Harvard Pilgrim employees currently working on the company’s information systems will become Perot Systems employees, remain on Harvard Pilgrim’s payroll, or be laid off.” [Boston Globe, 7/29/99]
  • By 2008, Only 300 IT Workers From Harvard Pilgrim Remained At Perot. “Harvard Pilgrim Health Care plans in June to slash as many as 84 jobs relating to back-office technology work. But most of those employees will be transferred to longtime outsourcer Perot Systems Corp… Perot Systems, in announcing the contract extension last month, said the move would save Harvard Pilgrim about $150 million in administrative costs over the life of the agreement. The company now employs 500 people to handle IT work for Harvard Pilgrim and most are based in Quincy. Of that number, 300 were Harvard Pilgrim positions at one point but they’ve been gradually shifted to Perot over the last nine years.” [Boston Business Journal, 5/13/08]

Award Citation Noted That The Relationship Between Harvard Pilgrim And Perot “Includes Some Offshoring Components” In India. The citation continued that “This relationship includes some offshoring components. [Harvard Pilgrim deputy CIO Bob] Trombly explains that healthcare insurance is a low-margin business; ‘a one percent annual fluctuation can make or break us. There is constant pressure from employers and regulators to reduce administrative costs. In our recent contract renegotiation, we challenged Perot Systems to help us aggressively reduce costs. One of the things they brought to the table was a proposal to reduce administrative costs by sending some of the work offshore.’ […]Trombly is the first to admit he had ‘fears and misgivings’ at the outset. But his view changed when he visited Perot Systems’s facilities in India. When he came home, he told his oldest son, who is heading to college this fall, ‘You better get off your butt because the rest of the world is ready to compete. It’s one thing to read The World is Flat; it’s another to see it in real time.’ He says ‘the staff in India is very well trained, doing great work, and eager to take on more. I think that’s a sobering lesson to everyone about the global marketplace.’” [Outsourcing Center, 8/1/08]

Outsourcing Center Calls Its Awards “The Oscars Of Outsourcing.” A January 2009 nomination page for the Outsourcing Excellence Awards notes that “Next month is our Awards issue where we highlight the 2008 winners of the Oscars of outsourcing–the Outsourcing Center Outsourcing Excellence Awards, sponsored in part by Forbes. In addition to sharing each winning relationship’s story, the Outsourcing Journal will have some winners share the benefits of winning an Outsourcing Excellence Award. Winning an Outsourcing Excellence Award is a PR department’s dream.” [Internet Archive, 1/29/09]

Outsourcing Center Lauds Itself As A “Best Practices” Leader In Outsourcing. On their “About Us” page, Outsourcing Center notes that “Our heritage is in sourcing insights; Outsourcing Center has been the most prominent Internet portal for thought leadership, best practices, emerging trends, and strategies for successful sourcing since 1997. In addition, since 1997 we have recognized the world’s best outsourcing relationships through the annual Outsourcing Excellence Awards program.” [www.outsourcing-center.com]

2011: Alsbridge Acquired Outsourcing-Center.com From Everest Group “To Create Industry’s Single Largest Source Of Outsourcing Data And Best Practices.” In a March 2011 press release, Alsbridge announced that the company “has acquired Outsourcing-Center.com, the most widely read source of research for outsourcing buyers… since 1997 Outsourcing Center has recognized the success of the world’s best outsourcing relationships through the annual Outsourcing Excellence Awards with past winners including companies like AT&T, Coca-Cola, Barclays, Microsoft, Prudential, Unilever and Universal Music.” [Alsbridge Press Release, 3/21/11]

  • Outsourcing Center Was Spun Off From Outsourcing Advisory Firm Alsbridge In May 2014. In a May 2014 press release, management consulting firm Alsbridge announced that they “will transfer ownership of Outsourcing Center LLC to Alsbridge’s founder Ben Trowbridge… The newly independent Outsourcing Center will focus on online media and communications for the sourcing industry and provide thought provoking articles, white papers and opinions on the state and future of technology, outsourcing, global business services and telecommunications.” [Alsbridge Press Release, 5/5/14]

Baker Said He Would “Highly Recommend” Perot Systems. “Perot Systems helped us to architect our strategic turnaround plan in 1999 and 2000 and has provided innovative, outstanding and dedicated service to our company for many years,” Baker said in a February 2005 Perot Systems press release. “We are very grateful for the transformation Perot Systems helped to facilitate and believe they are a true leader in the healthcare services industry. I highly recommend their services to any healthcare company considering a partnership with an IT services company.” [Perot Systems Release, 2/19/05]

2008 Perot’s Annual Report Lauds Outsourcing Award With Harvard Pilgrim, Notes Substantial Presence In India. Perot System’s annual report notes that “For our Industry Solutions Segment, emerging offshore development capacity in countries such as India, Mexico, and the Philippines is increasing the degree of competition for our software development services… We have a significant business presence in India… we own two campus facilities in India. We own the buildings and lease the land (under a 99-year lease agreement) of our Delhi facility and we own both the land and buildings of our Bangalore facility.” The report also notes that “Our relationship with Harvard Pilgrim Health Care was judged the “Best Partnership” in the Outsourcing Excellence Awards sponsored by the Everest Group and Forbes.” [Perot Systems 2008 Annual Report]

Dell Bought Perot Systems For $3.9 Billion In 2009. “Dell announced Monday that it will buy IT services provider Perot Systems for $3.9 billion. The two companies expect to provide a broad range of IT services and packages, expanding the global reach of Perot Systems and selling Dell computer systems to additional Perot customers. The move could be a shot in the arm for Dell, giving it a way to diversify beyond its bread-and-butter business of selling hardware… Perot Systems, founded by one-time presidential candidate Ross Perot, provides IT services and business solutions to customers in health care, government, manufacturing, banking, and insurance. The company has built a large customer base in North America, Europe, the Middle East and Africa, and Asia.” [CNET, 9/21/09]

2010: Dell/Perot Shipped Rhode Island Jobs To India. A 2010 investigation by the Department of Labor’s Division of Trade Adjustment Assistance determined that Dell Healthcare Services – including reported wages under “Perot Systems Healthcare Services, LLC and Perot Systems Business Process Solutions, Inc.” had shifted jobs from Providence, RI to India: “the shift of supply of information management, application development and maintenance, member administration and claims processing services to India by Dell contributed importantly to worker group separations at Dell.” [TAA Decision 74847, U.S. Dept. of Labor Employment & Training Administration]

Previous Department Of Labor Investigations Confirmed That Perot Systems Outsourced Arizona, Texas Jobs To India. In two 2009 cases, the Department of Labor’s Division of Trade Adjustment Assistance determined that Perot Systems had outsourced jobs to India from their Data Center Operations Department in Plano, TX and their Healthcare Business Unit in Phoenix, AZ. The decisions affected workers release between late 2008 and 2011. [TAA Decision 7245373007, U.S. Dept. of Labor Employment & Training Administration]

Nebraska State Petition Said Dell/Perot Systems Moved 250 Jobs From Lincoln To India. “Dell’s Perot Systems has cut 250 or more jobs in Lincoln and moved the work to India, according to a state Labor Department petition the company says is inaccurate. The petition, which seeks training and financial help for those losing work, showed a total of jobs lost that the company has not disclosed publicly and would not confirm. ‘The worker group is made up of business analysts and programmer analysts,’ the petition said. ‘Many employees have trained their Indian counterparts before being laid off from the company.’ Asked on the petition whether the company or any part of it is closing, the Labor Department responded: ‘Yes closing, early 2011.’” [Lincoln Journal Star, 10/30/10]

2009: New Perot Systems Call Center Brought The Company’s Employment In India To “More Than 7,000.”“Perot Systems Corp. is opening an IT call center in Chennai, India, that initially will employ a few hundred but has a capacity for as many as a thousand new jobs. Plano-based Perot Systems said the new location will handle business from Perot’s worldwide business process operations, and brings the company’s employment in India to more than 7,000. The new facility, comprised of 23,617 square feet on a single floor, is slated to open in late March.” [Dallas Business Journal, 3/11/09]

 

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