Not so co-operative bank
Shame to see yet another people-owned bank gobbled by the sharks. Where do I stash my pension fund now?
The Co-op Group claims to have made "significant progress" in updating internal IT systems since ditching IBM, according to the mutual's calendar '17 annual accounts filed today. "At the half year we reported that our contract with IBM to upgrade our IT systems had been terminated and we were exploring alternative technology …
The Canadian government wanted to replace it's dated payroll with a new system. Couple 100 thousand employees , supposedly nothing to it .. After 1.5 billion CDN the system is still not complete , does not work right and they have the ba*** to ask for even more money to complete their job.Frankly .. before you recommend IBM , think twice.
After 1.5 billion CDN the system is still not complete , does not work right and they have the ba*** to ask for even more money to complete their job.Frankly .. before you recommend IBM , think twice.
If the Canuck government didn't learn from IBM's billion Aussie debacle on a simple payroll system for Queensland Health, then they really have no excuse. Not to mention IBM's screwup of the 2016 Austrialian census, or the Indiana government portal screwup, all of them billion dollar botches.
I've heard that rationale for IT "upgrades" before. Quite often, IMHO, the "creaky" IT actually does what is needed as well (or badly) as any new system will, costs far less, and has the same potential for future change as the shiney new setup.
Unfortunately, often the IT department themselves believe that a complete net IT setup, implemented by some external
charlatans with a track record of expensive failure consultants will be a better option. So the company embarks on a huge, expensive and hazardous change of all back office process, much customer facing process, and all the relevant systems - all while trying to keep the plates spinning when actually running a large and complex business. There's a reason airlines don't change engines in flight, but most companies contemplating an IT "upgrade" don't stop and consider that is what they are proposing when they try and replace a CRM and associated systems.
Even when the dust has settled, the cracks been papered over, the post-investment review has been munged to make it look like it was all worthwhile*, few companies will control their IT destiny, because the new systems are invariably from large third party ERP vendors, who can then force their customer base to upgrade to whatever the ERP vendor currently sells, or pay some userous "support" charge, over and above the complex and pricey licencing fees.
* I saw a fine example a few years ago. My then employers were undertaking a post investment review of a £130m systems change. And verily, it did meet the business case! But only by virtue of an extra line on the "benefits" side of the analysis that read "Intangible or unquantifiable benefits: £18m".
@Ledswinger - often the IT department themselves believe that a complete net IT setup, implemented by some external
Sorry but no sane IT department would agree to outsource,, as IT Manager with 15 years experience, I've worked in SME's to FTSE companies. The only time I have seen this, is when the department is under-staffed or the CTO / Head of IT is a "strategic thinker" and member of MBNA club!
But to be fair, these guys are strategic thinkers - They're thinking of their exit bonus. They'll promise to modernise and reduce costs, in return for a fat bonus. The first thing they do is call their buddy at IBM, sign a contract, then collect their bonus as they run for the exit... before the shit hits the fan.
Sorry but no sane IT department would agree to outsource
A valid point, but not all are sane. In most cases, you're right that some "strategic thinker" considers it a good idea, but the IT department are usually complicit in their own demise by a near total failure to show the quality of what the in house team do, and to identify the inevitable consequences of outsourcing.
When a big outsource is being plotted, virtually no resource is put into the "case for the defence" nor any proper risk analysis.
Nobody is willing to stand up in front of the directors and point to the long history of outsourced fuck ups.
Nobody points at the cost benefit analysis and says "why are the quoted outsource costs per employee far below the vendor's average turnover per employee?"
Nobody asks "how and where do the vendor make their margins?"
Nobody points to the vast "goodwill" on the vendor's balance sheet and says "how can they be cheaper than us when they're loaded with so much ballast?"
Nobody analyses all the things the IT department currently do to identify the gaps between the SLA standard services and what the business wants.
Nobody points to the userous "non-standard request" charges or day rates hidden on page 164 of the contract, and subject to variation at the vendor's discretion.
Nobody shares the IT team's collective experience of outsources that failed, or cost more, or offloaded all the effort on to the operational business and harmed effectiveness, customer service and commercial agility.
So the IT department goes to the abbatoir quietly.
100% correct......and there are many "non sane" IT depts. that do spiral down this plughole. There is a reason why all the big vendors (IBM, MS, Oracle, HP, AWS..........) have concentrated on Global 'Services' and Outsourcing over the last decade - because it is a licence to print money. Moreover, it is like taking candy from a baby as they have their friends strategically implanted in many corporate IT set ups. Some people might say it borders on corruption................
When a company outsources to IBM, the current crop of employees are moved to IBM and become IBM employees. Over time, these employees are replaced with lower cost alternatives that supposedly can do the same job.
Clearly this isn't the case, but the the pointy haired managers have their huge bonuses for saving the company money and have long since left the building.
(At least in the US)
This isn't an isolated incident and this is in part why IBM has a sullied brand.
Rometty can shift the focus.... but she cannot change the brand's reputation as easily.
And stories like this only show just how much better it is to keep things in house.
You missed the part where every competent employee with any knowledge tries to cram out the door before IBM can figure out what needs to be knowledge transferred. That is if they can even figure out what is in scope for their contract.
I was part of one of these deals last year.
Day one -- everyone has 3 months to find a new job using the job board.
Day 30 -- We miscommunicated the message, please stop looking for jobs (too many people had come to the same conclusion, the internal job board was harder to use than external searches).
Day 60 -- scope of the contract still seems unclear, huge issues arising from the fact the client has tons of data that can't go overseas as it can't be access by non-citizens; apparently, no one brought that up.
Day 75 -- I tender my resignation (14 day notice)
Day 84 -- Scheduled call to discuss the enterprise 2fa application, I mention that I am gone in 3 working days (last day was a Monday). Apparently, no one communicated to those organizing KT when people resigned.
To boot, a lot of the staff that was "retained" by my old org has been filing out, either voluntarily or involuntarily.
easy fix for this is retention bonuses for some set period of time, enough $ that the staff will not leave until their part is done. Though I think IBM and some others may be more used to threatening staff with losing benefits if they leave before training replacement staff. Maybe that retention time is 2 months, maybe it is 3 years. Seems to happen quite regularly when companies are acquired at least in tech.
I got a three-year retention bonus when I was at IBM, in the form of a handful of shares. I forfeited them when I took a package, because the package then was decent and worth a hell of a lot more than the shares. A decision I do not regret.
I was actually involved in the very early stages of the Coop project. I found out a lot about the inner workings of their IT, although I know it was the tip of the iceberg. Of course, everything I knew came with me when I left.
Even as an AC I'm not going to say too much, but suffice to say something really, really did need to be done there if the bank was to survive, not least due to pressure from regulators. In my opinion the bank made the right decision, at least in the direction they took. Whether IBM was the right choice will reveal itself in due course.
Its fine when you know what you are outsourcing and theres amarket for the skills.
I outsource the office cleaning. Cleaner does about 10 other companies. We only neèd 5h cleaning a week.
Hes happy. Im happy.
I do outsource work - contracting. I have about 100h/y maintaining a prodyct. No enough work for a ft head, whuch they cant get. I bill them 90/h. Its work i can do in my sleep but thats because ive been doing tgat sort of stuff 20 odd years. And althoigh its tge customers core product, tge bit i work on is no their core competence value add.
Now outsourcing your IT - thats the core of your business these days. You have as wellsell up and put your capital in an investment trust.
Outsourcing to ibm, a serial fucker upper? Smoking crack like the thick vicar from the board.
Personally I think organizations should keep running their IT systems themselves, especially with more cloud and SaaS services. However, there are many longstanding outsourcing around the world run by IBM, DXC, Wipro, HCL etc etc. Some are run well, others fail due to a whole range of reasons.
Let's be clear, organizations essentially get these companies to do their "dirty work" which they don't have the stomach to do themselves. Management at the Cx level should stop sugar coating it with buzzword bingo like 'transformation, agile, devops'. It's a company saying 'we don't value IT, we see it as a cost center'. So we're getting someone else to run it cheaper.
I agree with you (hence upvote). There is also the instance of "single throat to choke" and reimbursement via SLA penalties which can make outsourcing attractive. You can't put an SLA penalty on the guy sitting at that desk now can you?
From a management/beancounting point of view (as opposed to sanity and productivity) removing a few million/hundred thousand from a wage bill and moving some of that to an outsourcing provider "looks good" Of course when it all goes to shit and there isnt anyone on site to fix it "now" and you have a 24 hour/5 day SLA and you have a whole business unable to function as a result seems to be overlooked.
One thing I can tell you (after working for a massive outsourcer for decades) is that the amount of customer retained IT is the deal maker/breaker.
If the client is so stupid as to having just left themselves with an IT manager and outsourced the rest, the outsourcer will take you to the cleaners.
On the other hand, a large retained IT department to oversee the outsourcer, check every design, validate every fact and hold their feet to the coals will result in a loss for the outsourcer. Being on top of SLA breaches and arguing contractual terms (having achieved some decent terms in the first place over defined service) is how you win - and you can win big with your IT costing much less, even allowing for a larger number of senior techies as your review team.
Some clients are smart enough to spot this, most aren't. The outsourcer will of course try to snatch all of your IT people in order to avoid this very problem, because we know it.
Take this knowledge and go to battle ;-)
IBM has proven time and time again they don't want your business, if it means they have to do something.
Unless you are willing to log onto their web portal and buy your own equipment, or sign up for some airy/fairy Watson AI services that cost IBM nothing to supply they aren't interested in your business.
Not only is IBM not interested in your business, it appears that quite often IBM is not even capable of taking care of the business. This is just one more in a long line of companies that are sueing IBM for failure to deliver.
Now, it must be said that there are certainly some cases where IBM is the scapegoat to mismanagement of the projet, but there are too many cases for that to always be the reason.
On top of that, IBM has a tendency to shed its most knowledgeable employees, and that can't help.
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