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Outsourcing vendors hit mediocre heights: DaimlerChrysler

Outsourcing vendors hit mediocre heights: DaimlerChrysler

Outsourcing vendors need to think globally, deliver locally and lift their game when pitching for contracts, according to the Australian IT department of auto manufacturing giant DaimlerChrysler, which has switched from incumbent Australian outsourcer T-Systems (a division of Deutsche Telekom) in favour of Hewlett-Packard.

The new contract covers servers, desktops and management of the automotive manufacturer's PABX system. Neither vendor nor client was willing to put a dollar value on the new contract, although it is known that DaimlerChrysler runs about 650 desktops.

While the deal is not huge by outsourcing standards, it highlights what may be an emergent trend towards letting individual IT shops of multinational corporations do their own shopping for better customised services and products - while leveraging on size for price.

DaimlerChrysler's Australian senior manager IT for services, Frank Sassone, said: "It's a matter of what's the best local fit for local conditions, within our corporate guidelines. One thing we look at is that it should be a multinational company. But it's whoever fits best [locally] in a [particular] country. "We broke [the selection process] into three categories, with each worth roughly one third. Price was one. Company [the calibre of and reputation of the vendor] was another. And [the vendors'] actual response to our RFP and how [they were] able to meet our service level agreements. We gave them equal weighting so price wasn't the most important -- but it was significant, obviously."

Not that all vendors were exactly breaking their backs to get ink, Sassone said.

"There are organisations that are really not interested in a smaller outsourcing [deal]," he said. "Globally our outsourcing is huge, but in Australia it's not that big compared to some of the other deals. I bring it down to perhaps that they wanted to respond, but weren't prepared to go the extra yard. Maybe the deal wasn't big enough for them– I don't know.

"It could be broken into two camps: three of [the six respondents were] very good and strong; two of them [were] mediocre or below average; one pulled out after it received the RFP. That's based on our criteria, other people may have different criteria."

A more critical view of this could be that 40 per cent of those pitching to DaimlerChrysler didn't even come close to cutting a deal. While 650 desktops might not be a big deal, it just could be that the DaimlerChrysler and its ilk are seeking joy from smaller things. The Ford Motor Company has also recently sidelined its incumbent outsourcer EDS in favour of IBM and Dassault Systemes SA for its product lifecycle management (PLM) and design software systems.

In the motor industry, at least, sweating the small stuff seems to be paying dividends.


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