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GOVERNMENT OUTSOURCING - You Can't Outsource City Hall

Two years ago, San Diego County was supposed to be the proving ground for wholesale IT outsourcing of local and ...

 

PAGE 2

Part of the problem, says Howard Lackow, senior vice president at The Outsourcing Institute in Jericho, N.Y., is the fundamental disconnect between big business (which wants to move fast) and municipal government (which traditionally moves slow). "Government is so archaic and cumbersome," Lackow says. "The whole objective [of outsourcing] is to try to streamline government, but that doesn’t seem to happen."

Although outsourcing might at first seem cost-effective for CIOs and lucrative for vendors, once projects are under way both parties find themselves spending a lot more time, money and energy than expected. Just ask CSC, the $10.5 billion IT services provider based in El Segundo, Calif., whose Pennant Alliance consortium has already exceeded its projected investments in San Diego County by about $10 million and 300 extra people. "Government takes a lot more hand-holding, care and feeding than people expect," Lackow says, and as a result there are fewer clients or vendors willing to take the risk.

But beyond unforeseen expenses, which can dog any IT project, public sector outsourcing poses some unique challenges?any one of which could kill a deal.

The scope of work. Frankly, state and local government IT is in worse shape than one might think. Because IT investments have been spotty at best in most agencies, the equipment is old, the networks are patched together, and the information silos are unbreached. It being the public sector, political turf is fiercely protected. Even though both sides in the San Diego contract did their due diligence before inking the pact, the county never really knew what it had for IT assets?much less what shape they were in. And no amount of homework prepared CSC’s Pennant Alliance for the amount of work that needed to be done just to get the county’s creaky infrastructure ready for upgrading. "We knew the triage work was going to be complex and difficult, but it was more than we expected," says CSC’s Richard Jennings, the former project manager of the San Diego contract. To complicate matters, all the work has had to be done while maintaining high levels of public service. "We’re changing the engine in a car that’s moving," Jennings says.

The publicity. Even though most private sector outsourcing deals are conducted between publicly held companies, the negotiations are still held in private. Not so in government, where every bid is a public document. The government executives are used to this transparency (not that they like it), but the vendors aren’t. "It’s a turnoff," Lackow says. "From the vendor’s perspective, even if you lose the contract, suddenly your pricing structure is public." And from the CIO’s perspective...well, would you want all your dirty data aired in public?

 
 
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WHITE PAPERS

The Evolution of Getting Things Done

Inefficiency is as persistent as the competition. Inside this brochure you'll read several case studies about companies that didn't settle for "good enough" processes and maximized the potential of every business relationship-from employees to business partners to customers.
 

Achieving Business Agility and Cost Optimization

This brochure describes the value and need for both messaging and enrichment capabilities together to have a truly complete ESB solution. The combination enables fast and flexible application integration, reduces integration costs and bridges to next-generation interconnectivity.
 

WebSphere Application Server V7.0

WebSphere® has evolved again to help companies adapt to ever-changing business requirements. This Redbook discusses end-to-end planning for WebSphere V7.0 implementations and thoroughly defines WebSphere concepts and best practices.
 

Enhance Customer Experience

Read how American Airlines tapped EDS, now HP, global competency centers in Latin America and India to help cut costs and optimize its IT investment.
 

The New Face of IT Service Management

In today's business climate, IT organizations need to demonstrate their ability to add value. This white paper from Macehiter Ward-Dutton - an IT advisory firm that specializes in issues of IT-business alignment - shows how IT can contribute to the strategic advantage of the enterprise.
 

Empower People and Embrace Change

The world is getting smarter, providing an opportunity to think and act in new ways - economically, socially and technically. IBM can help you harness the power of new insights to gain the efficiency and agility that's critical for success in today's volatile environment.
 

WEBCASTS

Is Content Killing Your Productivity?

Is Content Killing Your Productivity?
 

How Cloud & SaaS will change IT in 2010, and How It Won't

How Cloud & SaaS will change IT in 2010
 

A Roadmap for IT Innovation

A Roadmap for IT Innovation
 

Intel and Microsoft: Helping Solve Your Business Critical Challenges

Helping Solve Your Business Critical Challenges
 

Forrester Webinar: The Changing Landscape of Structured Data in E-Discovery

What is structured data and why is it often overlooked in e-discovery? Presenters Brian Hill of Forrester and David...
 

IDC Webinar: The Myth and Promise of Search Technology for E-Discovery

Search technology can provide several benefits to the e-discovery process, including faster review and reduced over...
 

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