Outsourcing

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The entertainment conglomerate has recently joined the outsourcing bandwagon by outsourcing a significant part of the IT department to IBM and Affiliated Computer Services Incorporated (ACS). In trying to leverage the cost benefits and the technical know-how, Walt Disney Co. has been unique in its approach by deciding not to lay-off the employees. They have been relocated in other departments or have been absorbed with the vendors.
Disney outsourcing initiatives were started more than a year ago and went through a rigorous vendor selection process. ACS will take over client-service and telecommunications, while IBM has been made responsible for the data-center and applications jobs. All front-end jobs where there is a direct customer interaction have been retained within the organization. The dual sourcing approach for this $1.34bn project has its own set of advantages and disadvantages. Benefits include having access to the technological core competencies of the two organizations and setting up a price-war between them in the bidding process. The main challenge would be to manage the relationship so that they can operate as a single unit in problem resolution encompassing the IT areas managed separately by the two vendors.
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Outsourcing