A Dead Deal

Filed in archive Outsourcing News on August 1, 2008

Photo courtesy of iStockphoto, Image# 6068691

Today, it was announced that Deutsche Post World Net has backed out of a proposed IT outsourcing deal with HP. The primary reason stated was that the "savings were not there."

Digging deeper into the article, Deutsche Post asserted that its own internal IT department was able to cut their own internal costs and get some additional projects started during the six month deal process with HP.

What is interesting to me is that these savings could not be found when dealing with a European provider. What that tells me is that either (a) there was no significant offshoring aspect to this deal, or (b) that the deal was not properly priced by HP. In any case, it is interesting to take a peek under the hood of a deal that went from LOI to near-contract, and then fell apart.