Dear Bob ...
I'm not looking for advice -- more a reaction to the Carlson Companies lawsuit against IBM as it terminates its mega-outsource.
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This is, after all, in your backyard (Minneapolis). So what do you think -- is this a problem of concept or just bad execution?
- Stirring the Pot
Dear Stirring ...
I really should duck this question, on the theory that the best position from which to view every divorce is to change the subject. Certainly, there's no way to ever know what went wrong in the relationship, as those who know what happened aren't remotely objective, while those who are objective are entirely unencumbered by actual facts.
But a soapbox is a soapbox -- so what the heck.
Whatever the particulars of this deal, it's unlikely to have made more sense than any other mega-outsourcing deal. That's because the megadeals are signed by companies big enough to have access to all the economies of scale the outsourcer might bring to bear to help cut costs. So long as someone in the contracting food chain is a decent negotiator, there's nothing the outsourcer can provide at a low enough cost to cover their margins.
Financially, something usually smells in these deals, and the last time I looked it was usually in the financing: The contracts load the benefits on the front end and the costs on the back end. Somewhere in the middle, all the economic advantages run out.
Next issue: A lot of companies that outsource IT in particular do so because they've given up on their own ability to manage the function. The problem is that if someone isn't competent to manage IT when it's run and staffed by presumably loyal employees, they're even less competent to manage an outsourcing relationship, when everyone involved has a financial stake in upselling and overcharging.
If anyone reading this is considering an outsourcing deal, please take this to the bank: If you can't manage it now, you'll manage the outsource worse.
There is, I suppose, one advantage to outsourcing as an alternative to management competence: You can sue an outsourcer, but not your own employees. Congratulations.