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Is HP committed to IT outsourcing?

Stephanie Overby | Sept. 3, 2012
HP had little to offer in the way of good news last week.

[Related: Outsourcing Challenges at Kimberly-Clark]

The good news, if there is some, is that HP's leaders know they need to make big changes, says Britz. But whether those changes will placate ITO customers just one business in HP's portfolioremains to be seen. "HP needs to make choosing HP a safe and solid choice in ITO," Britz says. "HP needs to focus on the fundamentals of service delivery and consistently execute a services-oriented strategy across all of HP, especially in cloud and analytics, so IT leaders can have confidence that they know what to expect from HP." The recent appointment of EDS veteran Mike Nefkens to acting head of enterprise services may be a step in the right direction, says Britz.

HP's admission that its ITO accountability had been too dispersed is also a positive sign. "This has been a problem for HP since it acquired EDS," says Brtiz. "If HP is, in fact, putting greater accountability and authority for ITO delivery clearly in the hands of a defined individual to act as a true general manager for that account, that could be the most positive ITO-related news coming out of HP in quite some time."

In the meantime, HP's outsourcing customers should take a hard look at how HP's enterprise services roadmap meshes with their own requirements. "Not everything fits into the 'strategic enterprise services' HP is placing emphasis on," says Britz. Offerings like network and desktop outsourcing could be phased out, for example. "Existing clients should really take the time to understand how well the services they rely upon HP to deliver fit with the strategy HP is laying out," says Britz. "Clients need to determine not just how well HP fits with their strategic direction, but also how well they fit with HP's. That requires deep, transparent, and meaningful discussions on both sides."

HP has also been hard at work figuring out which customers fit within its own profitability goals. "In many cases HP has been declining to pursue opportunities that are competitive, declining to meet client requirements in order to retain business, and generally moving away from customized solutions required to meet Fortune 500 companies' needs in favor of standardized solutions that can drive higher HP margins," says Rutchik.

Customers committed to retaining HP as a delivery partner should ask the following questions:

" How does HP view the profitability on my account?

" What are the key profitability enhancing actions that HP would like to make in each service line?

" How might those changes impact service delivery quality for my account?

" Is my HP account team as proactive and responsive as we need them to be?


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