In This Issue: 1. Editor's Note: Chinks In Outsourcing's Armor 2. Today's Top Story - AMD Adds Dual-Core To Mobile PC Platform 3. Breaking News - Apple Fixes Firmware, Leaves Users Confused - Windows Live Mail Almost Supports Firefox - Blue Security Gives Up, Spammer Wins - Outsourced IBM Workers To Get Unemployment Benefits - Tighter BlackBerry, Lotus Domino Integration On Tap - Phone Companies Fight Back Against Spying Accusations - Brief: Google Updates Online Video Service - Brief: Microsoft Patches Core Duo Battery Bug - Video Social Networking Enables Movie-Mashup Contest - Which Windows Live Search Is It? - Diebold Cancels Outsourcing Contract, Brings Home IT, ERP - Lenovo Unveils New ThinkPads 4. Grab Bag: Internet Everywhere--Is That A Good Thing? 5. In Depth: Open Source 6. Voice Of Authority: Mobile Devices 7. White Papers: Risk Control 8. Get More Out Of InformationWeek 9. Manage Your Newsletter Subscription
Quote of the day: "For a list of all the ways technology has failed to improve the quality of life, please press three." -- Alice Kahn
1. Editor's Note: Chinks In Outsourcing's Armor
When Diebold said Wednesday that it will take over--or more precisely, take back--an Oracle ERP implementation and some additional IT-related functions, resulting in a financial charge and an end to its contract with Deloitte Consulting, it didn't explicitly point fingers or assign blame.
It's not a stretch, however, to read between the lines and conclude that outsourcing failed in this case. Or at least, outsourcing failed to meet the company's expectations. Diebold said in a statement: "This decision is designed to provide the company with more control and flexibility over its IT operations as well as the ability to accelerate its remaining ERP deployment."
Of course, outsourcing proponents often contend that hiring out IT gives companies the flexibility to focus on "core functions" (a position that presumes IT isn't a core function) and greater speed in deploying systems and achieving business goals. But Diebold is saying, in effect, outsourcing wasn't fast enough and didn't deliver the expected flexibility.
"Regaining direct control of our IT operations and ERP implementation will allow us to expedite the process of realizing the long-term benefits of an enterprise-wide information system," Diebold CEO Thomas Swidarski said in the company's statement. "This strategic decision is critical to achieving the operational improvement targets we have set as well as positioning us to be more flexible and responsive in meeting the needs of our customers."
So in addition to being rigid and slow, outsourcing also proved costly and an impediment to serving customers well. I've argued previously in this space that we will see more companies express dissatisfaction with outsourcing as they turn over more functions to third parties.
What can we learn from Diebold? Efficient, effective IT is as much a part of a company's financial success as quality products, good customer service, and strong financial controls. That's not to say that outsourcing doesn't or can't work, or that there's no place for outsourcing. But the view that IT is a function that any third party can come in and take over, on a plug-and-play basis, is naive and dangerous. It can also be costly: Diebold will incur a 7-cent-per-share quarterly charge to terminate its contract with Deloitte.
What's your view? Is this one in what will be a long line of failed outsourcing efforts? Or is this an isolated case where reality couldn't meet expectations? Please weigh in at my blog entry.
Apple Fixes Firmware, Leaves Users Confused Although Apple said that the update was to System Management Control firmware, it was up to MacBook Pro users to figure out that SMC is the specialized controller that manages thermal and power conditions, and is in charge of running the portable computer's fans.
Blue Security Gives Up, Spammer Wins The anti-spam venture embroiled in a denial-of-service attack that brought down millions of blogs two weeks ago has closed shop. One observer wonders why Blue Security wasn't better prepared.
Brief: Google Updates Online Video Service Google has eliminated the need to use separate software to upload films to Google Video, replacing it with a Web-based uploader that can accomplish the task in two clicks.
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Central Park To Become A Web Site (New York Post) Get out your Frisbee and your laptop--Central Park is going wireless. Parks Department officials say they expect to have the park ready for wireless Internet access by the end of July. Every other city park will get the technology by the end of summer.
Treo 700p: It Can't Wash Your Car (Yet), But It Comes Close Hey, all of you traveling businesspeople out there! Put down your BlackBerrys and give the new Treo 700p smart phone a try. It may not come standard with "push" E-mail, but it combines the best of both worlds--professional and personal--into one neat package.
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