[LINK] Outsourcing - how to fix it?

[Tom Worthington]

At 10:30  16/01/01 +1100, Bernard Robertson-Dunn wrote (was: "Re: [LINK] 
Fahey interview/report access"):
>Tom Worthington wrote:
>
>>An alternative approach ... reverse the current system and have small 
>>Australian IT companies oversee the work of large multinationals.
>
>The problem with this approach is that the government wants to offload
>the risk.

The major risk with an IT system is that it won't work and the client will 
not be able to do their business. The financial risk in owning obsolete 
equipment is minor in comparison. Leasing can be arranged for an outsourced 
system. However, IT equipment depreciates quickly anyway, so it doesn't 
much matter.

A more important question might be how gets the savings with new 
technology. If web terminals become feasible in place of full function PCs, 
who will pocket the resulting savings: the client or the outsourcer? Are 
there any incentives for outsourcers to even look at such alternative 
technology under existing agreements or is there an incentive for the 
outsourcer to maximize the cost and complexity of the implementation so 
they maximize their percentage?

ps: An example of a web terminal (or thin client) is Sun's Sunray 
<http://www.zdnet.com/pcmag/stories/reviews/0,6755,2455867,00.html>. If the 
technology proves itself cheaper versions should be possible using low 
power PCs as the terminals and higher power Beowulf clusters as the servers 
<http://tux.anu.edu.au/Projects/Beowulf/>.


Tom Worthington FACS tom.worthington@tomw.net.au Ph: 0419 496150
Director, Tomw Communications Pty Ltd ABN: 17 088 714 309
http://www.tomw.net.au PO Box 13, Belconnen ACT 2617
Visiting Fellow, Computer Science, Australian National University
Publications Director & Past President, Australian Computer Society
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