Case Study On Outsourcing Outsourcing

Submitted By jamalafana

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As the article showed, in the begging of the outsourcing deal everything worked well.The contract entails Atos to act as the system integrator for KPN . Atos will assist KPN in integrating its IT infrastructure as well as handling product portfolio delivery. Through the contract, KPN wanted to reduce costs by increasing the speed of transactions. With this contract between Atos and KPN. KPN wanted Atos to add innovative applications . However , after almost two years of the contract and with changing of the market ,the relationship between KPN and Atos was deteriorating. The problem started when KPN customized the IT systems and interfaces. Besides, KPN tries of cutting cost strategy in IT had a direct effect on Atos. As a result, KPN engaged in not very well projects with Atos,which invoked penalties under the Revenue Guarantees. As a result of theses panalties, AO had to utlize current assest and no to inveset in inovative cost cut idea.

We truly believe that KPN should renegotiate the contract with Atos. Continuing with “as is” is not the right solution for many reasons. First, ''as is ''plan has a direct affect on the implementation time. Delays in the outsourcing process with the first two phases , which had a great impact on phase 3. As a result of these delays, phase 3 was not attempted. Furthermore, countioung with the same contract didn't encourage Atos to put more effort in innovation.

Renegotiate the contract and putting more effort to

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