Tuesday, 21 January 2014

HCL Partnership - a contrary view

Another of our readers has submitted this contrary comment on the HCL partnership. We thought it worth showing in its own post as well as a comment on the original.
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Mike Lawrie did the right thing with this move.

It is no surprise that CSC is withdrawing from outsourcing.  Lawrie was left with little choice given CSC’s accumulation of mistakes and errors of strategic direction going back 15 years. These were always going to come back and bite CSC and they did. The surprise is that CSC succeeded in managing down major problems in outsourcing for so long. The good news is that they have now found an exit strategy before outsourcing losses and failure to win new business brings the company to its knees as NHS did a couple of years ago.

The strategic errors included initially keeping so many small data centers that came with outsourcing wins, leading to lack of scale and islands of inefficiency;  the profit models which created high profits in the early years of a contract but little or no profit in later years; the permanent need to sign up more and more (doubtful quality?) new business to mask the profit shortfalls in the later years of  older contracts; the unachievable “cost challenges” factored into the profit models which kept pushing problems into the future; the failure or refusal by CSC top executives to understand the changes in the outsourcing market;  a stubbornly persistent focus on trying to win mega deals when it was clear that the era of the big infrastructure and apps deals was over; and then the recurring cancellation of investments to compensate for the shortfalls in  “this quarter’s profit” .

The tragedy is that CSC could have been one of the pioneers and leaders in Cloud, as it had been in the 1990s in infrastructure and apps outsourcing. Things could have been different if a decade ago it had analyzed objectively the changes in market and client needs, the advances in technology, and the company’s capabilities and market position. This could have led them to what we now know as “Cloud”.  But this would have required strategic vision at a time when CSC was led by a CEO whose focus and priorities were detail, numbers, cost cutting and “this quarter’s profit”.  So it did not happen.


Mike Lawrie deserves criticism for many things, but on this one he deserves credit for defusing a potential time bomb.

Anonymous

8 comments:

Anonymous said...

To be honest, whatever strategy the Honey Monster and Laughing Boy might have had instead, they were delivered with a golden opportunity to join the feeding frenzy of federal business post 9/11.

Chuck in the mega lolly of NHS and who could, without hindsight, blame them for seeing all of that as the answer to the post Y2K blues of the outsourcing world.

Instead we (finally) got peace, an economic crash and a very over ambitious NHS project that collapsed under its own contradictions. Apart from a little creative accounting a the odd lie about progress, none of the other things were anything CSC could have changed...

And now we have "Chapter IV: the new hope".... as rough as wookie's backside.

Don't get too excited about it, if it comes off then it will be dozen Indians running a cloud control panel and the rest will be out the door.

Anonymous said...

Sounds like another move from play book which will go nowhere for these chumps....

Anonymous said...

http://www.channelregister.co.uk/2013/11/06/eight_is_enough_microsoft_said_to_have_settled_ceo_shortlist/

Lawrie did not make cut? Not for this thread Casandra but might be interesting read...

Also people in USA having to work a day a week unpaid, not good!

Anonymous said...

Whatever is going on in CSC the company looks to be in short term trouble. If CSC is really is exiting the outsourcing business then current customers must be, or ought to be, very worried and should look for alternative suppliers. After all; would you buy services crucial to your business from someone who has telegraphed they intend to wind that service down?
That could mean revenues from old products and services, like outpouring, going into steep decline pretty soon. Will the new services deliver sufficient revenues and profits to make up the shortfall?

Anonymous said...

Just read this,, people supporting IT are the core of this company. Most are hardworking (except most transferred in from new business wins..they are wasters looking for life time job doing as little as possible) so what is left once moved out to third parties? Not a lot. If in support of account management..your days are numbered. Pink slips here we go again.....

Anonymous said...

It doesn't matter, the whole industry is a nest of crooks. http://pando.com/2014/01/23/the-techtopus-how-silicon-valleys-most-celebrated-ceos-conspired-to-drive-down-100000-tech-engineers-wages/

Anonymous said...

In the article it states - Former CSC man Mike Lawrie is mentioned as a possible candidate for the same reason, but isn't on Reuters' list of those who've made the final cut.

Former??? Guess they might have got their facts wrong?

Anonymous said...

I totally disagree that HCL was a good decision. I have worked with them and they were not only not competent but lacked interpersonal skills needed to engage and work as a team. They usually put the projects at risk!