IT outsourcing "mega deals" with a single supplier are
flawed and companies should look to sign contracts with a range of
suppliers to minimise the damage if a deal goes wrong, according to
Robert Fawthrop, former managing director of LogicaCMG's global
outsourcing business.
"I think the days of the multi-billion-pound outsourcing deals
ought to be numbered," said Fawthrop, who last week took over as
chief executive of outsourcing consultancy Morgan Chambers. "It is
a slightly flawed model. You are putting all your eggs in one
basket and you are not allowing your in-house IT people to do what
they do best."
Fawthrop said that although deals with multiple suppliers were
harder to manage they delivered better value for money.
He added that a growing number of companies would outsource
back-office processes and technology to shared service centres if
the outsourced technology was not used to give the organisation a
competitive advantage.
This has proved popular with banks and suppliers who have created
joint venture companies to process cheques and other administrative
functions.
Rolls-Royce's mega deal success
Rolls-Royce believes outsourcing mega deals can deliver hefty
savings and adapt to meet business needs.
Rolls-Royce IT director Luc Schmitz said the company saved tens
of millions of pounds by halving the cost of its PC managed service
unit under an outsourcing deal worth £1.3bn made with EDS in
2000.
However, other large companies, such as Barclays Bank, have
signed a series of smaller outsourcing deals with different
suppliers.