Well, some outsourcing deals really sometimes go sour when they fail to apply basic principles of IT management efficiently onto the contract. This sensational revelation comes from PricewaterhouseCoopers (PwC) which audited Swansea City Council’s £83 million outsourcing deal. Surely, you can expect some heavyweight big executives’ movement now. The guys who were responsible for the mess that is.
PwC report said that Swansea City Council completely failed to gauge the benefit in terms of saving that Capgemini predicted earlier. Capgemini before being awarded with a back office outsourcing contract from the Swansea City Council in 2006 predicted that the firm will be able to save £70 million over ten years. Later after scaling back the contract the council reshaped the prediction to £26 million over ten years. PwC report said till date it has been able to save £6 million.
That’s not bad actually. Saving of £6 million in one year and four months (assuming that the contract has started in January 2006 and considering PwC audited till April 2007, equals to 1 year and 4 months) means approximately the council will be able to achieve a saving of £24 million in 10 years. (£6 million in one and half year, that is £12 million in 3 years and £24 million in 6 years).
So, what’s the fuss, the council will well achieve its the renewed target. Can any one answer or clarify?
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