Privatization - Not a Silver Bullet

Filed in archive Opinions & Insights on October 17, 2009

© iTopher

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.