Although there is some benefit to outsourcing, I am not sure that it is material enough to matter on these big deals. The big cost of implementing and maintaining these large scale enterprise systems is not in the hardware or a sys admin or two - it is in the developing of the requirements, specifications, implementation, etc., and then integrating it within the legacy business environment - people, processes, etc. and then keeping the system up to date as requirements and the environment adjusts to market conditions.
If you've got 1,000 people worldwide who have to be brought up to speed on the system, set up workflow, build screens, reports, make sure it all works, set up database schemas, etc., the component/hosting that could be likely outsourced probably represents something on the order of 3-5% of the total project. Given that Siebel will have to charge for this, maybe a company could save 1 or 2% of a project? It's something, but not too material, given the downside potential.
for example, what happens if SEBL and the client get into some dispute? there you are - all of your mission critical data and production systems are in someone else's system and you and they are threatening lawsuit. |
