Chrysler Stakes Turnaround on IT Outsourcing
Chrysler made news in Motown with its announcement that several hundred technology workers would lose their jobs as it moves ahead with plans to outsource more IT.
Shortly after the headline appeared in the Detroit Free Press, Tata Consultancy Services (TCS) issued a press release Friday announcing that it bagged a deal to deliver IT application and maintenance support services from "various locations around the world as well as the recently announced TCS Seven Hills Park domestic delivery center outside Cincinnati, Ohio and through a locally recruited team in the Detroit, Michigan region."
On Tuesday, Computer Sciences Corporation (CSC) joined the party with its pronouncement of a deal that has it taking over mainframe, server and storage services for all of Chrysler's worldwide locations, as well as applications support, maintenance and development services for a portion of Chrysler's application portfolio.
Neither Chrysler nor its new vendors disclosed the size of the latest deals. Presumably, TCS learned its lesson in February when it inadvertently included a price tag of $120 million along with its press release for a smaller application maintenance and support services deal with Chrysler. (TCS's PR folks later asked journalists and others to omit the $120 million from reports on the deal per Chrysler's request. Apparently Chrysler-parent Cerberus really puts the "private" in private equity.)
That deal was relatively small in the grand scheme of things. But public angst about potential outsourcing from local union reps back in February hinted at the fact that more announcements were to follow.
According to the Detroit Free Press, about 200 of Chrysler's 1,000 full-time employees and "several hundred" of its 1,110 contractors will be shown the door as a result of the deals -- all part of Cerberus's three-year recovery plan for the ailing automaker. There was no word on how many of the remaining workers would be transferred to CSC or TCS.
"This partnership represents the next step in our continuous efforts to operate more efficiently and effectively and gives us the tools and flexibility to drive – not just react – to business growth," Jan Bertsch, Chrysler's vice president and chief information officer told the newspaper. She also said it would better position Chrysler in its attempts to access global markets previously ignored by the company.
Of America's "Big Three" carmakers, General Motors (GM) is the most closely aligned with IT outsourcing. The company bought EDS in the mid 80s, spun it off in 1996, then signed on a ten-year deal with the freed IT services provider. GM CIO Ralph Szygenda loves to market himself as an outsourcing maverick – pioneering what he calls the "third wave" of outsourcing, in which competing IT service providers work together to support GM. EDS still has the biggest slice of the pie, but must share the rest with, Cap Gemini, Accenture and others.
Ford has been less forthcoming about its strategy for IT outsourcing and offshoring of late. There is a deal on the books between CSC and Ford's European operations, and the company has its own Indian captive center handling BPO services. Former
Previous Post: Is EDS Making Waves Across the Pond?Next Post: Delta to Merge with Northwest: Fasten Your Seat Belts
Most Discussed Posts
Cloud computing has emerged as one of the most significant game changers to hit the technology landscape in the past 20 years. With this massive expansion of the cloud, the perception of the IT organization is shifting from a utility player to a change agent. This eBook breaks down five ways progressive organizations are using cloud-based IT Management solutions to help drive innovation and become more strategic, including: adding visibility and analytics, speeding up time-to-value, lowering costs, improving prioritization, and providing a blueprint for future cloud deployments.
Read the white paper to see how IBM helped Citigroup deliver new services and enhancements to their 200 million customers faster.
There are 3 ways to modernize legacy applications: rewrite completely, acquire packaged solutions or migrate existing code. This paper explains why it's best to migrate and how IBM® Rational® software can help.
Accommodating specific lines of business can result in a hybrid ecosystem of applications and servers. The resulting complexity of this architecture makes for an environment that is costly to maintain and difficult to change when addressing new challenges.
This whitepaper will help you to define a mobile device passcode policy. Security managers must attempt to reconcile two opposing goals. They must: 1) create a passcode policy that is strong enough to protect the device if it is lost or stolen, while: 2) not annoying users with needless length or complexity.
This whitepaper, authored by The Radicati Group, looks at the key reasons organizations should consider moving to a cloud-based archiving solution. Email archiving solutions enable organizations to store, monitor, and collect electronic data exchanged by their users to comply with internal policies and regulations.
ATERNITY will showcase a 30-minute demo on how Fortune 500 companies are leveraging its award-winning FPI Platform to deliver a user-centric approach to Proactive IT Management.
For businesses to move forward and tap into the ever-expanding universe of Internet users and network-enabled devices, it's critical to learn how to make the transition to IPv6. Learn the critical steps your organization must take to make a seamless transition-and keep your business world connected.
Learn how IT teams can protect against spear phishing tactics. Harry Sverdlove, chief technology officer of Bit9 offers a frank discussion about spear phishing - the most common technique used in today's advanced attacks.
Learn how to build a solid business case for your migration to Red Hat Enterprise Linux so you can run leaner, innovate faster, be more flexible and own the New Now.
Social media isn't about you; it's about everything around you. As you consider how your customers want to communicate with you, social media is something that can't be ignored. But what should your strategy be? Is social media "just another channel?" What kind of a plan makes sense for your contact center and for your customers? Join our experts as they share their insight and research results.
Hardware tokens were a popular method of strong authentication in past years but the cumbersome provisioning and distribution tasks, high support requirements and replacement costs have limited their growth. The additional log-in steps that hardware tokens require and the resulting user frustrations have limited adoption and make them impractical for larger scale partner and customer applications.
Sponsored Links
