Talking outsourcing

If there's one jurisdiction that can claim to have learned from harsh experience in outsourcing, it's South Australia. Here's hoping others are paying close attention to how it applies those lessons.

If there's one jurisdiction that can claim to have learned from harsh experience in outsourcing, it's South Australia.

The state -- currently transitioning from an AU$565 million, nine year deal with United States giant Electronic Data Systems (EDS) -- is now implementing a number of mechanisms to make sure it gets what it wants from its outsourcing relationships.

These include a vendor cooperation council and vendor scorecards, while one of the key metrics on which suppliers will be measured is their ability to collaborate effectively.

There will be plenty of governments and blue-chip companies watching very closely how the state government adjusts its management tools and techniques for life post-EDS.

Several are re-evaluating their own outsourcing deals -- most notably the Commonwealth Bank (CBA), whose new chief executive officer made clear its own post-EDS outsourcing strategy would be substantially changed from the decade-long arrangement coming to an end soon.

Ralph Norris told a recent briefing the new arrangements would very much be driven by the CBA's desire to retain a strong internal capability and intellectual property, while any new arrangements would be flexible enough to allow the CBA to use the best vendor for the job.

Your writer wonders to what extent Australia's customers swap notes -- either formally or informally --on how to get the best out of EDS and other outsourcing partners. Sitting through a day of presentations on outsourcing is one thing, but the best insights are almost always gleaned by talking to your peers (generally over six or seven beers). It would be interesting to see what techniques and tools for managing outsourcers have become ubiquitous through Australia's corporate and government communities due to this type of networking.

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