EDS and MOD contract

Outsourcing watchers the world over are waiting with bated breath as the Ministry of Defence prepares to announce its much anticipated decision on the winner of one of the biggest deals in IT outsourcing's history.

However, according to the National Outsourcing Association, it is strongly believed that the "Atlas" consortium, led by US services giant, EDS and Fujitsu Services has landed the £4 billion record contract to supply IT services and bolster communications between 100,000 civil servants and the 200,000 personnel in the Army, Navy and RAF.

National Outsourcing Association

The NOA commented:

“The announcement of this deal is monumental in the history of IT outsourcing and the result has been eagerly awaited. This particular deal is interesting in a number of respects:

• EDS - despite being one of the most prolific outsourcing companies
  in the public sector, EDS doesn't have the greatest record in public sector outsourcing (remember the Inland Revenue contract and the project with the Department of Work and Pensions). The DII deal is a good sign as it shows that EDS is turning things around - this deal serves to polish up its public sector image.
• Eggs in one basket? - the NOA has recently commented that many large
  organisations are now executing multi supplier outsourcing contracts,
  meaning lower risk and better competition amongst an organisation's
  suppliers. On first glance it could appear that the Ministry of Defence is opting for the single supplier option. But this is not the case as all members of the EDS led consortium will work together to ensure the project is delivered - if one partner fails to deliver on any part of the contract, another will step in and take over. This minimises the risk and ensures that provision of DII will be seamless and not vulnerable to any supplier weaknesses or mishaps as might happen in a single supplier deal.
  
  
• Public sector offshoring? - last week EDS announced that it is
  moving 21 of its data centres in the US and Europe by the end of 2006 to India and other offshore locations in a bid to cut costs. This obviously brings into question whether offshore data centres will be used in any of the DII execution. The public sector has traditionally steered clear of a business practice that can be quite contentious, although there has been argument lately that public sector organisations should perhaps be using offshoring to cut costs, as the private sector does. However, offshoring by proxy is a possibility in situations like this - EDS could be considering using Indian data centres to process government work."