Texas Halts Work On IBM Outsourcing Contract - InformationWeek
IoT
IoT
IT Leadership // IT Strategy
News
10/29/2008
02:41 PM
50%
50%
RELATED EVENTS
[Dark Reading Crash Course] Finding & Fixing Application Security Vulnerabilitie
Sep 14, 2017
Hear from a top applications security expert as he discusses key practices for scanning and securi ...Read More>>

Texas Halts Work On IBM Outsourcing Contract

Gov. Rick Perry tells state IT officials that the vendor has failed to maintain adequate backups.

The state of Texas has stopped work on an $863 million outsourcing project under which IBM is transferring state records to a centralized computer system.

Governor Rick Perry said in a letter to a state IT officials that IBM failed to perform "the crucial backup of data for more than 20 state agencies," according to a report Wednesday in the Dallas Morning News.

The Governor also said that project overseers failed to implement a series of check and balances meant to ensure the project's security. The newspaper reported that, in one instance, half of eight months' worth of Medicaid fraud records were lost due to a server malfunction and that the state has fined IBM $900,000 for the failures.

IBM's contract for the work is slated to last seven years. It's not immediately clear when the work will resume.

In a statement, an IBM spokesman said the company is cooperating with state officials to fix the problems. "IBM welcomes the review ordered by Governor Perry," the spokesman said. "There have been some issues with data backup and recovery and IBM has been working with the Texas Department of Information Resources to resolve those issues as quickly as possible."

IBM's spokesman said that Texas' IT operations "have steadily improved since the project began last year and plans are in place to continue to improve those operations."

Despite the setback in Texas, IBM's outsourcing unit remains strong. For its most recent third quarter, IBM reported that outsourcing sales increased 8% year-over-year to $9.9 billion.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll