IT Outsourcing Case Studies

In customer terms, at 6.64 percent, the financial services industry spends the greatest share of total 2002 revenues on information technology, followed by telecommunications (6.4 percent), banking (5.37 percent), and the information technology industry itself, 5.13 percent. Industries spending the least as a percent of total revenue are construction and engineering (1.43 percent), hospitality and travel (1.55 percent), and retail (1.63 percent).

Across all industries, IT executives are under increased scrutiny to reign in spending, provide more accurate and timely information, and give executives greater visibility into both strategic and tactical initiatives. They must accomplish these and other tasks with fewer employees.

At the same time, budgets are on a downward slope. And with an increased emphasis being placed on delivering more innovative services (like self-service capabilities) and products that both add value and help move the enterprise forward, it is no wonder that many firms are now turning to outsourcing.

Some of the best-known case studies in IT outsourcing include Dupont.

Dupont
DuPont is a science company, delivering science-based solutions that make a difference in people's lives in food and nutrition; health care; apparel; home and construction; electronics; and transportation. Founded in 1802, the company operates in 70 countries and has over 90,000 employees.

DuPont signed a 10-year outsourcing alliance agreement in 1997. The mammoth deal worth over $4 billion in contracts with CSC & Accenture includes:

• Outsourced IT infrastructure, applications maintenance, desktops
• 3100 people transferred
• Contracts in 22 countries
• Contract is 30,000 lines long, 600 SLA
• Decision process took 18 months
• Transition period took 2 years

U.K. Inland Revenue
EDS has run the Inland Revenue's tax and national insurance computer systems since 1994. The contract is one of the largest and was estimated to be worth £1bn (€1.4bn). In 2003, serious delays in the payments of new tax credits were blamed by the Revenue on EDS' faulty computer services. The computerized payment scheme crashed, leaving thousands of claimants relying on emergency handouts.

As a result, the Inland Revenue didn't renew an IT deal worth £3bn (€4.2bn) with Electronic Data Systems (EDS). The 10 year Aspire technology contract went to a to a consortium led by Cap Gemini Ernst & Young. Cap Gemini, working with BT and Fujitsu- will take on 2,250 employees to cater for the new contract.