ATO unfazed by HP/EDS cuts

ATO unfazed by HP/EDS cuts

Summary: Hewlett-Packard's move to chop about 24,600 jobs worldwide following its US$13.9 billion EDS buy might not have much impact on the merged group's operation in Australia, according to Australian Taxation Office CIO Bill Gibson.

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Hewlett-Packard's move to chop about 24,600 jobs worldwide — following its US$13.9 billion EDS buy — is unlikely to have much impact on the merged group's local operations, according to Australian Taxation Office chief information officer Bill Gibson.

ATO CIO Bill Gibson

ATO CIO Bill Gibson
(Credit: ATO)

"The good thing is Australia is a long way away from that," said Gibson, when asked if the Australian Taxation Office (ATO) was concerned about the cuts, which have had some UK public sector unions warning of a potential decline in the level of IT services provided.

Gibson said in his opinion, EDS in Australia was "a fairly efficient and lean organisation" that had already had to "skinny" down in tough times.

The CIO said the ATO, which is one of EDS' largest local clients, had not had a formal briefing from HP after the acquisition. "But we've had assurances from their senior management, the CEO, that what is happening in the US and UK; don't assume it's going to have to happen [here]," he said.

On the contrary, Gibson said the EDS acquisition offered positives to the huge agency. "The merger of HP and EDS in Australia will only benefit me," he said. "I end up with a supplier who is larger, has access therefore to a greater amount of capability and intellectual property."

The CIO said ATO had already seen positive benefits from bringing on some HP staff into projects previously managed solely by EDS.

So far, both HP and EDS have remained silent on what the Australian impact of the cuts will be, or what the merged organisation would look like in Australia. On 16 September, an HP Australia spokesperson said it was "too early" even to comment on which executive would lead the combined group locally, or what the reporting lines will be.

Meanwhile, the Association of Professional Engineers, Scientists and Managers Australia (APESMA), which counts a large amount of local EDS staff among its members, has demanded to be told the local implication of the cuts.

ZDNet.com.au's Brett Winterford contributed to this article.

Topics: Hewlett-Packard, Government, Government AU

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3 comments
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  • Bill Gibson doesn't get it

    One of the things which I find disturbing is about Bill's attitude towards EDS. As most major IT media outlets would know, the ATO has been trying to 'abandon' EDS in favour of more competition. However, this no longer seems to be the case.

    With our ROAM project, we are acquiring laptops for most of our ICT staff in order to create a mobile workforce and these will be sourced from HP. There is no doubt that these laptops will be 'leased' to the ATO rather than being purchased outright as all our IT equipment is currently being maintained by EDS.

    With EDS, there has always been a negative sentimental we are being overcharged for a lot of things. For example, a typical software install costs around $150 no matter what program it is. So if we add this onto the cost of the ROAM project, there is certainly bound to be a budget blowout.

    It is ridiculous for Bill to be in a comfortable position with the HP/EDS merger and thus remaining as a major sole supplier of our IT equipment when staff do not feel the same way.
    anonymous
  • Bill Gibson gets it more than you think

    Dude - chill.

    You think IBM or any other outsourcer wouldn't be charging $50, $100, $150, $200 (or whatever) for software installations? Usually, this is a negotiated rate and it isn't the outsourcer at fault if your organisation has agreed to this cost.

    As for hardware, leased equipment usually works out far better for an organisation's bottom line, from both a tax and cost-effectiveness
    perspective. Again, its easy to superimpose your perception of the current cost model of your current outsourcing agreement but if there is a change in the contract where a hardware component is added, I'm sure your contract people will also have a clause for warranty and replacement policies which works for your organisation.

    At the end of the day, its very easy for users to blame the outsourcer and again, at the end of the day, the organisation who signed the outsourcing agreement knew what they were doing (or you've got a lot more issues than just an outsourcer overcharging you).
    anonymous
  • Sounds like a comms issue

    If an outsourcer is charging you $150 per software install regardless of complexity and your company has used the outsourcer for some time now, I'd say poor communication from users to their technology operations/management team is at fault.

    People who put contracts together for LARGE companies/organisations isn't going to have these experiences.
    anonymous