TUESDAY 19TH OCTOBER 1999: Xchanging Offers an Interesting Option?
Meet with John Paddick and hand in my homework, saying we think we can close down Cheadle by year-end and therefore hit the plans I have been asked to achieve. The good news is that I will not have to make any staff cuts in my core Purchasing area if we achieve the Cheadle reduction. I am running about 10 people below our full numbers anyway; I may not be able to fill these gaps given the new targets, but at least I don't have to lose professional purchasers. The job market is buoyant and good staff are not easy to find, so I really don't want to lose good people.
We still don't know exactly when we have to go public with the GHQ job cuts, including Cheadle. They are important enough to warrant a Stock Exchange announcement, so it looks like they will either form part of our defence document or be announced simultaneously with it. Therefore the last possible date is next Thursday, but we may not know internally until the last minute. However, my problem is that it takes 5 hours to get to Cheadle from home, so I can't delay leaving until the announcement- I don't want the staff there to here about it on the Internet or BBC news! I need to call on my interplanetary superpowers and travel instantaneously to Cheadle, as opposed to sitting on the M6 trying to get through Birmingham for two hours which is what usually happens when I go up to the SDC.
John tells me that there have been some top-level discussions with a new company called Xchanging. They are run by a top ex-Andersen Consulting guy, with big money venture capital backing, and are trying to sell an outsourcing proposition with an interesting twist. They are targeting large Financial Services companies and suggesting they outsource "back-office" functions, such as Purchasing, Finance, or HR, to Xchanging. Both the company doing the outsourcing and Xchanging would then take a financial stake in the new company formed. (Following me so far?)
They will then look to create a successful stand-alone business out of this that can go on to obtain more contracts, hence - Hey Presto! - turning a back office cost into a revenue and profit generator. John thinks NW might be interested in this as both a reasonable concept, and something that would demonstrate to the City how forward thinking and innovative we are. It sounds like it could be worth exploring, and I am not necessarily against this, but I am a bit pissed off that no one has even mentioned this to me up to now.