By  on April 13, 2010

Usually companies outsource to save money, but at Kellwood Co., doing the unexpected and bringing the tech department in-house — plus hiring 54 new employees to staff it — saved it $3.6 million in only five months.

After a reorganization, acquisitions including Vince, new ownership and new financing transformed the company and saved it from bankruptcy, the old IT organization was no longer relevant or needed.

Kellwood severed its 13-year contract with outsourcing and technology services company EDS (now HP Enterprise Services) and updated its systems. The company installed a new network, switched from AT&T to Verizon, jettisoned its old internal e-mail system in favor of Outlook in the “cloud,” where Microsoft hosts it, and redesigned the support center to better meet employee needs.

Through EDS, the company used to offer tech support 24-7, but found employees rarely used the costly service. Now a smaller help desk is staffed from early morning to late at night, and employees who are traveling in Asia or need assistance during the wee hours can call an emergency number.

The company’s top priorities for this year are to support new acquisitions with e-commerce and retail technology, and to move the whole company to one reporting and dashboard system. The company uses Gerber for product data management, Oracle for financials and Manhattan Associates for warehouse management.

“We’re moving, wherever it makes sense, to cloud technology, and either software as service or off-the-shelf applications,” said Kellwood vice president and chief information officer Linda Kinder. A 14-year Kellwood veteran, Kinder was previously at EDS and McDonnell Douglas.

Cloud computing, which means software that is hosted out of house, and standardized software have become popular ways to save money by decreasing administrative and development costs. Before making the switch, Kellwood brought in consultants Alsbridge Inc. to advise on what would work best. Kellwood decided to end its relationship with EDS and renegotiate other contracts in the fall, and the company implemented that decision from October to February.

Kellwood is still looking to fill one open position, but overall, it devotes fewer resources to technology now (including previously outsourced staff in the calculations).

In addition, over the years, “we’ve built tighter interfaces between our wholesale, retail, e-commerce and distribution systems, so we have more streamlined operations regardless of where our inventory goes,” said Kinder.

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