December 2009 Archives
HP workers call off a strike.
This story is significant because if the workers at the DWP walked out in large numbers HP's reputation as an IT service provider could have been seriously damaged. And still could.
Equaterra reveals which suppliers serve their customers best.
This annual survey of customer satisfaction is always a good guide to what works and what doesn't in outsourcing. It also highlights the strengths and weaknesses of different suppliers.
HCL wins another deal
HCL has announced another deal after last week's agreement with Equitable Life.
Cloud computing is gathering pace but businesses want private clouds first
Cloud computing to have a similar impact on corporate IT as the introduction of the PC.
HP reported the good news that its services business was growing. The completion of the integration of its EDS acquisition was the main contributor to an increase of 8%.
But the EDS integration has not been straight forward. Many of its people, which in an industry like outsourcing are pivotal, are unhappy with their new owner.
A series of cuts to jobs, pay and other benefits has turned many against the leadership.
The latest episode saw HP workers, who work at the Department of Work and Pensions, vote for strike. If disruption is caused this week as planned it could damage HP's reputation and possibly undermine outsourcing in general.
US staff seem even worse off than UK workers with cuts to pay of up to 50% being made, according to emails recieved by Computer Weekly.
Staff are furious that HP's top executives are barely touched by the cuts to pay and benefits.
Check out replies to this blog entry in the US to see staff reaction.
But is this just good business?
Or will the EDS beating heart eventually stop?
So the government is going to cut back on parts of the £12bn NHS IT project (NPfIT)
to save money. But there could be penalties for breaking contracts from
the suppliers which could cost millions. Then it will have to go back
and pay for the work to be done again.
Robert Morgan, director at Hamilton Bailey, which advices suppliers, says the decision could cost the government millions.
"Chancellor Darling's apparent willingness to scrap parts of the NHS electronic record programme is another example of knee-jerk political interference which has dogged this project from the beginning. What does you think he can achieve - has he understood the contractual obligations? Officially his action is to save £600m
"Cancelling the various contracts with suppliers BT Global Services and CSC will still cost many hundreds of millions in penalties. Fujitsu is currently suing the NHS for £700m from the cancellation of their contract in 2008. Not all the contracts have the same clauses however government will be liable for cancelling all or part of their obligations. Failure to play fair will have a severe impact on any future contracts with supplier unwilling to accept anything except water-tight compensation clauses. Government has some £30Bn of new and renewing contracts due during 2010-2011.
"Less than 20 hospital
And that is not to mention how it will damage the NHS's operational capabilities in the future.
Here are a selection of links to interesting stories so far this week.
1 - http://www.computerweekly.com/Articles/2009/12/03/239567/1000-angry-HP-EDS-staff-vote-to-strike.htm
Many EDS staff are not happy. Since HP took over the company in 2008 there have been thousands of job cuts and reductions in other benefits.
2 - http://www.cbronline.com/news/hcl_unveils_new_suite_of_data_centre_services_091201
HCL is also bolstering its offering with a raft of new datacentre services
3 - http://www.computerweekly.com/Articles/2009/12/02/239557/seven-steps-to-outsourcing-heaven.htm
A report by the Warwick Business Schools offers businesses a guide to help them get more out of outsourcing contracts.
4 - http://www.computerweekly.com/Articles/2009/12/02/239544/bp-outsources-comms-and-supplier-management-to-t-systems.htm
BP has outsourced its voice and data comms to T-Systems. It is also passing the supplier responsibility for managing its multi-sourcing strategy for comms.
There is never a dull day in the outsourcing world.
The multi-million pound deal which spans 5 years was announced today.
Industry expert Robert Morgan, at Hamilton Bailey, says this is the way the market is moving.
He says, what is known as the Service Integration role, which T-Systems has assumed in this case, is a good thing to do logically speaking. But he warns that the supplier chosen to do this must really understand what's available in the market.
Because the BP deal is global T-Systems must understand the different service capabilities of suppliers in different regions.
I would ask:
If this trend continues will smaller suppliers be destined to play peripheral roles in outsourcing contracts?
There is also a potential conflict of interest with the Service Integrator potentially preferring its own products over that of existing or potential suppliers.
Robert thinks this is more of a cause for concern in IT outsourcing deals rather than comms deals, like BP's.
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