Says it's a waste of money
I'd liken the whole thing to that Far Side cartoon where there's two panels of a guy with a dog...
"Bad Ginger, Don't shred the carpet Ginger!, Bad Ginger... "
what Ginger hears
"Blah Ginger, Blah blah blah, Ginger, Blah Ginger..."
It's the same thing... seriously!
Yep. Agreed. Many schools do seem to ignore the expertise of those they employ. I think it comes down to the whole 'teachers know best' in a school. For some reason many teachers and head teachers seem to think they can decide on the way forward with all aspects of T&L without actually knowing anything about what is needed to implement their ideas.
It wouldn't happen in business. If a new system were to be implemented in a business, you can be damn well sure that people with expertise in those areas would be consulted.
Yes.. and how everybody is jumping on the Outsourcing bandwagon to save money ... that the saving money is a fantasy.. and it ultimately costs more.. a lot more.. also there is a loss of experienced personnel that know the company and have an in-depth knowledge what the companies aims are..
What you have to realise is the public sector always lags behind the private sector, especially in IT. While the private sector has woken up to the fact that outsourcing IT doesn't save them money and de-skills their workforce the public sector still have that lesson to learn .........
The largest public sector bodies are a match for FTSE 100 companies in terms of IT spend and in-house skills. Neither look like scaling back on outsourcing or 'business transformation' projects. My own opinion is that these deals are notoriously difficult to implement, with the customers and employees of the organisations forced to feel the brunt of the changes while the directors and managers pat themselves on the back, and it often takes years for any benefits in 'efficiency' to materialise...and what 'efficiency' actually means for proponents of outsourcing is job cuts.
Last edited by torledo; 23rd February 2008 at 07:28 PM.
Dave Friedlos, Computing, 22 Mar 2007
More than half of firms exit outsourcing deals early
More than half of FTSE 350 companies have been forced to exit or renegotiate an outsourcing contract before the end of its term, research published this week shows.
The survey from law firm Addleshaw Goddard says poor service, lack of control and hidden costs are usually to blame for failing outsourcing contracts.
‘Companies often embark on outsourcing deals with rose-tinted spectacles and do not anticipate what could happen when they go wrong,’ said Addleshaw Goddard’s technology and outsourcing head Margaret Harvey.
Most firms have renegotiation or break clauses because the cost of technology falls over time, says Forrester analyst Euan Davis.
‘It is vital companies reach their service level agreements to avoid failure,’ he said. ‘When deals go sour, many companies have lost the knowledge required to bring services back in-house.’
Outsourcing success story?
The AA has begun the transition from its £50m, seven-year outsourcing contract with IBM to bring its datacentre back in house.
The motoring organisation, which has saved £22m in IT running costs since the contract began in 2005, believes it can now run its datacentres more cost-effectively internally.
The five-month transition project will bring The AA's IT policy into line with that of its parent company Saga. Darragh O'Keefe, infrastructure strategy manager at The AA, said, "Saga does not believe you can save money by outsourcing."
The AA will migrate the datacentre IT equipment it owns from IBM to its own datacentre between now and the end of June. It is spending £500,000 upgrading the air conditioning in an old AA business continuity site to take modern servers. The centre will run several business systems, including The AA's core customer database, Microsoft Exchange and SQL Server.
What about ......
Media giant BSkyB is suing US IT outsourcing firm EDS for £709m in a High Court case that kicked off in London yesterday.
The broadcaster alleges that EDS failed to fulfil obligations of a £48m contract for a customer service system that was first agreed in 2000.
BSkyB's barrister in the case said the firm's subsequent performance was "woeful", according to today's Financial Times.
The media behemoth ended its contract with EDS in March 2002 and began legal action against the Texas-based firm in August 2004.
The huge damages claim – said to be one of the largest British commercial cases of its kind – alleges deceit, negligent misrepresentation, and breach of contract by EDS.
As far as Public sector outsourcing is concerned ....
Report says outsourcing overruns cost billions
24 December 2007
A think tank has called for 'root and branch change' in public services, following its damning report on ICT outsourcing
Research by the European Services Strategy Unit shows that 105 outsourced public sector ICT contracts have significant cost overruns, delays and terminations.
The unit examined large outsourcing contracts, PPPs, PFIs and strategic service delivery partnerships in central government, the health service, local authorities, public bodies and agencies over the last 10 years.
It found that cost overruns amounted to £9bn for the 105 projects, with an average percentage cost overrun of 30.5%. It also revealed that 30% of contracts were terminated and more than half (57%) had cost overruns.
The main ICT companies with contract cost overruns, delays and terminations, according to the research are EDS (13 contracts); Liberata (eight contracts); Fujitsu and IBM (six each); Accenture, Atos Origin, Capita, ITNet (now Serco) and Siemens (five each) and BT (four).
Many reports by the Public Accounts Committee, the National Audit Office and other organisations have tried to explain these problems, says the unit. But it also says these findings rarely get to the root of the problem because they focus almost exclusively on the procurement process.
It says that clearly some of the problems encountered by ICT projects are a result of over-ambition, a lack of design and development before procurement, and pressures for efficiency savings overtaking the ability to deliver. The technical complexity of ICT projects is also often undeestimated, it says.
Dexter Whitfield, the author of the report said: "The scope of the failures is shocking. The remedies do not lie in tinkering with the procurement process but with root and branch change in the modernisation of public services.
"The government's commitment to commissioning and contestability does not address any of the fundamental causes and will only make matters worse for ICT projects in the next decade."
I have to agree with Broc move in commercial world is to move back in house (slow process but is happening) as it was two years ago I was in a briefing with some high level people at likes of HP who commented that out sourcing boom is declining as they move more back in house.
I was not advocating the merits of outsourcing, just explaining that big outsourcing deals continue to be signed. We can spend all day finding stories of outsourcing deals that have turned awry but that doesn't stop the fact the deals continue to be signed, critical business functions continue to be outsourced. For every example you give of companies taking key services back in-house there are an equal number of new deals being signed.
Apologies, it was Unilever who've outsourced infrastruture to HP in a $675 million deal. Infact the AA and BskyB examples you've used are small change compared to some of the recent deals that have been signed, including Unilever's huge deal with accenture last year to manage their SAP systems.
I don't diagree with the report on the efficiency of outsourcing, i'm not an outsourcing advocate...why would i be. Just don't buy the outsourcing model is dead argument. Not that you were suggesting as such, but many people are.
This distinction between public sector IT and private sector IT i don't agree with...public sector IT departments use the same products, have similarly highly trained IT staff and have very large IT spend in many instances. They also have the same problems to deal with. I will argue about you're claim that public sector IT is 'lagging behind' corporate IT.
Last edited by torledo; 25th February 2008 at 10:35 AM.
It's a very competitive area with numerous companies competing to win business, and many operations are too large and complex to move back in-house. Particularly for large multinationals with sophisticated supply chains.
So companies like HP, accenture, IBM and their partners will continue to do well maybe not in wholesale outsourcing but in the management of certain key business functions on behalf of multnationals and public sector bodies.
I suppose we should really consider the critical measure of outsourcing 'success' is not the number of clients who are signing up, but the number who continue their contract to term and then sign up for more?
A good example of this would be those companies that have outsourced call centres offshore and are bringing them back because they have not always proved popular with their clients.
In any case, while we both gave examples to prove our seperate points of view, citing examples of successful or unsuccessful outsourcing contracts with companies such as IBM, HP, EDS are largely irrelevant as far as BSF is concerned as none of them (as far as I am aware) has won any BSF ICT business yet.
Perhaps it's because they don't think they can make any money out of it, or maybe that the BSF contracts are too small to be bothered with?
I still think the private sector is in the vanguard when it comes to exploiting technology in general; successful companies are continually looking for a competitive edge and can build a business case for funding where there is a business advantage, whereas there will always be funding issues that inhibit technology advances at the same rate in the public sector.
If a city council raise council tax to pay for new services including IT, it's no different than a supermarket chain raising costs of their products to help pay for it's core business functions including IT.
Go down to the school level and the funding disparity is evident, but there is little to choose at the higher levels. City councils, government departments do have the funding available, and are now at the vanguard after a few years of playing catchup in terms of implementing call centres and IT enabling their business. Some choose to outsource some or all of their business functions and some continue to keep certain areas 'in-house'. I suppose it is true the public sector is late to the outsourcing party so have yet to get their fingers burned in the same way as the corporate sector.
I see little benefit for companies like IBM and EDS to bid for BSF projects as they have existing contracts in the public sector to manage. Although i do believe Sun and Dell have bid for bfs contracts, they're not big players in IT services and don't have the portfolio of IBM or EDS.
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