Strategic CIO // IT Strategy
Commentary
5/26/2006
04:29 PM
Tom Smith
Tom Smith
Commentary
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Outsourcing Tracker: Unhappy Customer Sues IBM

I've predicted before that failed outsourcing contracts will become commonplace enough that we'll find more and more companies dumping their outsourcers. The last example, cited just nine days ago, was Diebold dumping Deloitte Consulting.

I've predicted before that failed outsourcing contracts will become commonplace enough that we'll find more and more companies dumping their outsourcers. The last example, cited just nine days ago, was Diebold dumping Deloitte Consulting.Now we have another, uglier example. IBM is being sued by Sprint Nextel, which is seeking $6 million in damages for failure to live up to expectations. Now $6 million may be a drop in the bucket for IBM, but this is part of a five-year, $400 million outsourcing pact that's anything but a drop in the bucket. The future of that deal could be tenuous if a key piece of it has wound up in litigation. Sprint Nextel has already reduced the amount of work allocated to IBM.

For its part, IBM is maintaining the ultimate stiff upper lip, as a spokesman was quoted as saying, "...IBM continues to have a significant and healthy relationship with Sprint."

Memo to IBM and Sprint Nextel: Lawsuits aren't a good indicator of significant, healthy relationships.

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