Navy is Outsourcing, Wal-Mart?

Filed in archive Outsourcing Pros and Cons on April 5, 2004

According to Bob Cringley, the U.S. navy is busy outsourcing its IT offshore. He also compared it with Wal-Mart, which is three times larger.



Source: Wal-Mart.com

Department of the Navy decided to outsource most of its shore-based IT activities in an effort to standardize a broad array of systems and to get costs under control. NMCI was a competitive bid eventually won by EDS, which hasn't done either a very good job of pleasing the Navy or making money on the deal.

Now listen to what IT guy at Wal-Mart said about their outsourcing decision:

Those sources were clear: there is no way Wal-Mart would entrust its IT services to an outside contractor or even to several outside contractors. Doing so would threaten the entire organization. If costs are out of control and services are inconsistent, that's something to be dealt with internally, not by hoping some outside organization is smarter or more disciplined. "We have suppliers, sure, but the ultimate responsibility always remains here in Bentonville," said my Ozark IT guy. "We centralize it, we control it, we know what we are buying and what we are doing with it. Anything less is just too much of a risk."

Now, my questions:

1. If the U.S. Navy is this supportive of the outsourcing movement, how would the application of anti-outsourcing bill turn out?

2. Wal-Mart doesn't believe in decentralizing IT and is doing great. It this a poster child of anti-outsourcing?