Friday, March 26, 2004

Outsourcing: what would Wal-Mart do?

Bob Cringley has a long article on problems the U.S. Navy has had with outsourcing to EDS. At the end of the article, he contrasts the Navy's approach with that of one of the world's most well-run corporations, Walmart. Cringley called some of his sources internal to Walmart and asked them confidentially whether Walmart would ever consider outsourcing some or all of its IT function to an outside contractor.
Those sources were clear: there is no way Wal-Mart would entrust its IT services to an outside contractor or even to several outside contractors. Doing so would threaten the entire organization. If costs are out of control and services are inconsistent, that's something to be dealt with internally, not by hoping some outside organization is smarter or more disciplined. "We have suppliers, sure, but the ultimate responsibility always remains here in Bentonville," said my Ozark IT guy. "We centralize it, we control it, we know what we are buying and what we are doing with it. Anything less is just too much of a risk."
Cringley's whole article is on the PBS website.

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