Whirlpool's Web ChainWhirlpool's Web Chain

Whirlpool Corp. is increasingly turning to its IT department to help reduce inventory and improve product deliveries.

Whirlpool's Global Information Systems division recently began developing a Web-based supply-chain management application to communicate with trading partners. The $10 billion a year appliance manufacturer hopes to gather more up-to-the-minute information on product demand so it can cut excess inventories and their associated costs. The company is also developing

a call-center application based on Siebel Systems Inc.'s customer-relationship management software. These ambitious projects were threatening to spread Whirlpool's IT 400-member staff too thin, so earlier this month it freed up personnel by outsourcing support for existing applications to Keane Inc.

The five-year, $39 million contract requires Keane's application development and management consultants to provide repair and help-desk support for Whirlpool's SAP R/3, electronic data interchange, and existing call-center applications. Keane also will collaborate with Whirlpool to modify the manufacturer's EDI application whenever supply-chain partners are added or removed.

"We want to outsource more of the support functions to Keane so that Whirlpool IT employees can work on areas that best use their knowledge of the company," says Richard Vavra-Musser, Whirlpool's director of business-systems solutions. Whirlpool will continue to use its IT staff to work on larger, long-term development projects, because they're most familiar with the company's business and can do the work with less training than an outsider, he says.

Keane consultants will be brought in only when necessary to supplement Whirlpool's staff on the new online supply-chain and call-center applications. Keane is also likely to take on support and some development work on other incumbent applications, such as apps from IBM WebSphere, i2, and Trilogy.

A shortage of IT skills is still a major driver of application outsourcing, as is the need to offer internal IT staffers the more challenging IT projects, says Rita Terdiman, a Gartner VP. And if there are several applications that are interconnected, companies can outsource the whole project to a single vendor like Keane, she says.

Whirlpool is somewhat personnel-constrained due to its location in Benton Harbor, Mich., says Tim Barry, VP of application outsourcing for Keane, which derives more than half of its $872 million in annual revenue from application support. "Whirlpool is going to continue to look for ways to motivate their programmers by finding them new, more strategic work," he says.

Whirlpool also recently turned to a third party to help it manage its collaboration with repair contractors (Nov. 5, p. 28; information.com/862/whirlpool.htm). ServiceBench Inc., a Fairfax, Va., application service provider, is helping Whirlpool manage the workflow with its contractors via a Web-based warranty repair system.