Top outsourcing stories of 2009

This is a list of what I think are the top ten outsourcing stories I wrote last year. I have ranked them in terms of the number of people that clicked on the articles.

Obviously there were massive stories written by other people. But what were the best?

1.Satyam chief B Ramalinga Raju admits to fixing the outsourcer’s books

The chairman of Indian IT outsourcer Satyam Computer Services admitted that he fixed the company’s books for several years.

2.Satyam staff exodus as fraud unravels

More than 14,000 Satyam workers had their CVs on the web within a day of the news breaking that the company’s chairman had been cooking the books.

3. HP staff face a hurricane of cuts to pay and benefits

HP staff, who already face significant voluntary pay cuts as part of the firm’s cost-cutting plan, face further involuntarily cuts to many more of their benefits.

4.Pay cuts barely touch HP executives

Hewlett-Packard’s top executives are unlikely to suffer in the company’s voluntary pay cut programme, despite agreeing to take pay cuts of up to 20%.

5.‘Naive’ BT Global Services split into three

BT is restructuring its struggling Global Services business to focus on three separate areas after its “unacceptable performance” led to the group losing more than £1.3bn.

6.India losing its advantage in outsourcing

Indian IT service providers are losing their advantage against global competitors for providing IT outsourcing services as customer satisfaction levels fall. But they still compete successfully and still achieve high customer satisfaction levels.

7.Why IT service providers should offer flexible pricing now

EDS’s decision to offer businesses flexible service options will help IT departments cut costs without losing service levels. EDS’s new model will allow customers to take out services while not paying as much up front.

8.1,000 angry HP EDS staff vote to strike

As many as 1,000 Hewlett-Packard staff will go on strike for one day in December to show their disapproval of pay freezes and job cuts at the company.

9.Who will buy Satyam?

Indian IT supplier Satyam is up for sale, but who will buy the company that has been shaken by an accounting fraud that went on for several years unnoticed.

10.Business outsourcing is on life support, bosses told

Commoditised outsourcing is no longer outsourcing and strategic outsourcing is on life support.

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Karl - A great top ten of 2009. I wonder if your readers (or devotees!) have joined the dots and seen the future behind the headlines you have highlighted?

For me and my clients in the outsourcing industry, 2009 saw a crossing of a line.

This line is the wholesale industrialisation of services and the scary possibility that outsourcing is rapidly becoming a rate card driven "service". This is exemplified by the rate of investment in new technologies like the cloud, SAAS, infrastructure on demand, virtual storage, etc. These services will allow clients to chose the SLA level and therefore the price and client can swap the provider at almost a moments notice and without major penalty.

The tragic end and demise of EDS into HP and the wholesale removal of the business consultancy capability EDS enjoyed - to be turned into a pure numbers driven commodity service provider. 2010 will see the fall of other good service providers as consolidation continues.

Outsourcing is about Business enablement NOT merely technical solutions and hardware homogenisation.

Outsourcing is about mitigated risk and contractual flexibility.

Outsourcing is about exploiting the service providers previous investments, assets, people skills, experience and using that partnership for the good of the Business.

Before I switch you off by thinking that I am working for the service provider community or some altruistic dreamer - I broker outsourcing marriages and have done so via Morgan Chambers and Hamilton Bailey for the last 16 years. All parties try it on and jockey for position but eventually once all the testosterone calms down we done agree solid contracts with mutual commitment, flexibility, transparency, accountability and sustainability.

So what fate intermediaries in this new commoditisation of everything? Well American intermediaries seem to embrace it and as a result suffer the fall in fee rates as a consequence. Once lost this can never be recovered. Home grown consultancies however continue to illustrate real value via underwriting results and sharing risk and still maintain a high level innovation. Who will ultimately win - the answer is subjective of course!!

Another area for rapid recline of value has come from the Analysts. Who can remember the great and innovative approaches of Gartner in Outsourcing? These days all output seems to be cost orientated and only around value for money on commoditised outsourcing service lines. Where is the innovative thinking guys?

Anyway back to the article, Satyam dominated Karl's top ten and rightly so. Satyam was Offshore's ENRON and I have a feeling it will not be the last example to surface. But more broadly there are emerging real threats to the offshore model and India's pre-eminent position. Commodity offshore services have their place but a range of near-shore (European)initiatives are successfully illustrating the innovation is more obvious and customer touching services are almost as cheap, but definitely more client acceptable, closer to home.

Expect more questions about India or China decisions to come from the Business and shareholder communities.

2010 will see a great deal more change within our industry but we should all fight for more demonstrable value ahead of commoditisation - we want and need accountability!!

Thanks Robert.

So which service providers do you think are set to be turned into a pure numbers driven commodity service provider this year?

These will be biog stories?

But another Satyam could be even bigger.