That is the claim being made by General Motors (GM), which has made its long awaited announcement on which companies will be providing its outsourcing services from this summer onwards.
GM is one of the pioneers of outsourcing, so its definition of third generation outsourcing is obviously worth paying some attention to – although given the car giant’s track record with EDS, ‘third time lucky’ outsourcing might be a more accurate description.
While cost reduction remains an obvious driver in the contract process, GM’s definition of third generation outsourcing means that there are other, perhaps more sophisticated motivators as well. The company wants to have a single GM rather than a bunch of disparate IT operations.
The return of EDS
Rather to everyone’s surprise – including itself’s most likely – EDS has managed to hang on to a large tranche of the business.
Despite being involved with GM for over two decades, there was an expectation in the market that this year might see an end to it. After all, EDS has cost GM revenues for the past few years.
Psychologically the retention of GM business is likely to boost EDS in its ongoing efforts to turn itself around and shake off some of the issues that have plagued it in the recent past.
The new contract also boosts the validity of the move towards multi-sourcing in giant contracts. Hewlett-Packard, IBM, Capgemini, Compuware, Covisint and Wipro all picked up sizeable chunks of business.
A major challenge now for both GM and the individual service providers will be to put the necessary governance elements in place so that six can operate as one.
Pulling that off on a global scale will be no mean feat – GM is either going to provide the industry with a hugely positive example or a massive demonstration of how not to do multi-sourcing in practice.
More developments on the Salesforce.com outages this month as the company moves to put in place a ‘traffic lights’ style website where punters can go to see the status of the service. This is a good idea in principle but I’m not convinced it’s going to be that reassuring. I mean think about it: you come into the office, switch on your computer, load up your browser, log in to Salesforce.com and nothing happens. You think to yourself, ‘it’s not working’. So then you go on to the service level site and find, hey, it is not working either.
What the site needs to do is to provide a recovery time to put people’s mind at rest. However, what the site does do that is interesting is provide a means of being more transparent.
Salesforce.com did not, by its own admission, handle the messaging around the outages as well as it might have done. From what I can ascertain subscribers were less irritated by the outages – which were seen as pretty much inevitable at some point – and more by Salesforce.com’s comments that sought to downplay the seriousness of the breakdowns and used descriptions like ‘minor’. While the major enterprise customers were contacted personally by Salesforce.com account managers, that was hardly feasible for all 18,000 subscribers. The new site should provide a visible demonstration of transparency.
It also sets a standard for rival vendors – will they produce a similar set of open performance statistics?
One last point: there is a serious discrepancy between the amount of time that Salesforce.com reckons the service was out and the time that bloggers on various sites claimed it was out.
Methinks a little bit of hostile reputation undermining might be taking place on the part of some rivals or investors interested in shorting out the stock.
Looks like Salesforce.com is playing with the grown-ups now.