HP: BSkyB-EDS problems occurred in a different outsourcing era

The head of HP Enterprise Services in the UK and Ireland has told Computerworld UK that the outsourcing business is in a “very different place” from the early 2000s when a damaging dispute arose between the company and broadcaster BSkyB.

Craig Wilson, country managing director at HP and former head of EDS UK, said there was an “immeasurable difference” in buying and selling habits compared to the start of the decade. Many firms were now on their “second or third round” of outsourcing, he said.

HP inherited a high-profile court case between EDS and BSkyB, over a failed customer system implementation, when it bought the supplier in 2008. This year, it lost a key judgment in the case – after a sales representative was found to have deliberately lied in 2000 about the timescales needed in order to win the work – and six months later the company reached a full and final settlement for an unprecedented £318 million.

The settlement was agreed in June as damages and cost awards continued to pile in, hitting a total of £270 million before BSkyB’s £48 million legal costs were assessed. HP in March was forced to restate global profits as a result of the mounting expense it was incurring in court.

Wilson was not able to comment directly on the case, because of the terms of the settlement between the companies. But he said that with large businesses now well-accustomed to outsourcing there is smarter buying, fairer selling  and more “professionalism” across the industry than there was ten years before.

“It’s a very different atmosphere from the year 2000,” he said. “The degree of professionalism is clear.”

“Gated reviews” are now common in the industry, including at HP, at various stages of project bidding and during work, Wilson said.

“As well as multiple levels of delivery assurance review, there are a series of gated reviews as deals progress,” he said. “It’s physically impossible at HP to sign a deal that doesn’t go through a gated review. It’s extremely strictly controlled.”

The idea is to “bring together the sales view and the delivery reality”, he explained. “You don’t get sales people or project leaders pursuing the whole thing.”

Wilson insisted the BSkyB case had not forced HP to change its practices “one jot”. Any changes reflected the growing maturity of the market instead, were carried out well before a judgement was delivered, and similar efforts could be seen by other outsourcers.

Asked whether the judge's damning findings, over EDS selling practices and methodology, had had a negative impact on client confidence, Wilson said the company had retained customer support. “I’ve not had one single client phone up about it.”

Copyright © 2010 IDG Communications, Inc.

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