Salt Lake River Plans To Outsource Work

The Salt Lake River officials are planning to outsource 40 to 50 information technology workers job after there was job cut for nearly 100 employees this year. The utility officials had to reconsider their decisions to cut costs amidst the sluggish economic growth. They had to pursue a reasonable option to keep the utility rates low.

Regulators who are in charge of the other utilities in the state are concerned about this outsourcing, because SRP is a wing of political subdivision in the state. They said that outsourcing of jobs to other states or countries would not be allowed at other utility companies.


The officials at SRP have been meeting many BPO service providers to discuss how they would handle the utilities of the computer services. They would be requesting for proposals from the different companies to perform the work as said Kevin Nielsen, the information-technology services manager of SRP.

Some of the employees who do not deal with customer service will be replaced so that, SRP or the outsourcing company rehires them.

Nielsen said that, it is a mixed bag. Some companies have their data center in Tempe, one in Colorado, while others have their data center in India, Philippines or Brazil.

According to an analysis by EquaTerra, an international outsourcing consultancy, SRP spends more than the industry cost on its computer services. Of late, it has been considering to cut down costs for its information- technology division.

Mr. Nielson was not willing to disclose what SRP spends on the division as that would reveal the companies data and hamper their process of bidding on the outsourcing work.

The spokesperson for SRP, Scott Harelson said that, the shrinking economy is to be blamed. The revenue of the company has gone down tremendously but their expenses have relatively remained high. Therefore the company is looking at opportunities to save money and keep their rates relatively low.

SRP does not fall under the management of Corporation Commission such as other utilities such as Arizona Public Service Co. or Tucson Electric Power. Instead, a 14-member board of directors governs SRP.
Nielsen said that, it is still to be decided if the board will be asked to approve outsourcing. Some board members have approved of outsourcing their non core functions to global service providers.
Mr. William Arnett a board member said that “If it comes up, we'll look very hard at it and find out if it is really worth the savings”. He added that in this day and age, one has to look at everything that comes down the road. While others said they trusted SRP management.
Mario Herrera another board member said that "I'm not there to micromanage because that is not my job, I feel very confident in the people that run these different departments."
SRP directors will not consider outsourcing 40 to 50 jobs but other aspects too, as it too has been affected by the weak economy. The company was hit hard during recession. According to a report by Chief Financial Executive Mark Bonsall, during the month of March, SRP had nearly 40,000 fewer customers than projected.
SRP had reported a loss of $24 million in March alone, and hence had reduced its planned capital expenses for the month by $22 million. Before offering severance packages to 99 employees this year, 83 had accepted, while the downsized the contract workers, temps and unfilled positions.