Govt IT outsourcing sparks staff backlash

Frustration, dissatisfaction and low morale appear endemic among the residual IT staff of a number of federal government departments that have played the outsourcing card.

Several industry sources who spoke to Computerworld claim the two-year-plus outsourcing contract between the Department of Veterans' Affairs and IBM Global Services has sparked wide-ranging discontent among users.

One government source said talks reviewing the contract were under way with many DVA personnel longing for a return to in-house services.

However, that option is unlikely because of the political capital invested in the outsourcing initiative and the costs of reassembling in-house IT resources.

DVA information management manager Murray Harrison admitted discussions with IBM GSA are under way.

"I'd take comments [about the pain levels surrounding outsourcing] with a grain of salt.

"I'm not saying everything is roses but we have a good working relationship with IBM GSA," Harrison said.

"We are working at areas where we had some difficulty and we are improving all the time."

He claimed current talks relate to routine repricing talks and not to any contractual impasse.

A spokesman for IBM GSA also discounted claims of special review negotiations.

"The contract has developed more broadly and there have been talks right throughout as its scope has changed," he said.

DVA first outsourced its mainframe operations to what was then Ferntree in 1992. It expanded the contract to include desktop infrastructure, which IBM GSA won in 1997, before the whole-of-government outsourcing policy was put in place.

Canberra insiders point to a more recent agreement between Advantra and the Department of Communications, Information Technology and the Arts (DCITA) as another problematic environment.

It may become a test case for bringing in third-party suppliers, they said.

One government manager of outsourcer relationships said the problems being encountered in Canberra aren't restricted to the public sector.

"It is the [outsourcing] process that is letting us down and it's happening with private sector contracts too."

After several years experience in outsourcing a painful litany of complaints has emerged. Heading the list are:

Minimal input by end users into outsourcing contracts that are drafted by designers who are more concerned with legal issues than business issues; Inadequate penalties for undershooting service levels in areas like help desk support;A lack of flexibility in contractual clauses built to focus on last year's user requirements rather than this year's or next year's;Inability to respond to new user directions because of staff shortages among outsourcers which reflect the general human resources pinch in the IT sector;Disillusionment over the lack of speed that joint-venture outsourcers can bring their parent companies' competencies into play.

But an outsourcing agreement that does seem to be working smoothly is the one signed in April 1997 between the Australian National Audit Office (NAO) and Unisys.

"We don't seem to have the problems that others appear to have," Angelo Paloni, IS manager at the NAO, said.

One reason may be the contract was drafted with maximum input concerning the business goals of the audit office. It also predated any involvement by the Office for Government Information Technology (OGIT).

"We put in place realistic service levels and got both sides to understand them," Paloni said.

A key element to the success of the agreement was regular weekly meetings to talk about issues that arose.

"As far as we are concerned, referring to the contract [penalty clauses] is a last resort, which we have never had to do.

"Our view here is that if you have to bring in a lawyer, you are in real trouble to say the least."

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More about AdvantraAustralian National Audit OfficeDepartment of CommunicationsGSA GroupIBM AustraliaIBM GSANational Audit OfficeOGITUnisys Australia

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