Privatization – Not a Silver Bullet
When Indiana outsourced its welfare eligibility to IBM in 2007, effectively privatizing the process, it expected to reap significant savings — the shibboleth often promised by outsourcing and privatization experts. Apparently, it didn’t turn out that way, as Indiana canceled its US$1.34 billion dollar deal this past Thursday (see AP Report).
Like any other process, outsourcing isn’t for everyone or everything. In fact, outsourcing can be a particular challenge when cultural differences and divergence in business goals are significant. Unfortunately, these factors are not usually captured in the average RFP or procurement process — perhaps they should be.
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