DXC share price tumbles on El Reg bombshell of Americas boss ejection DXC has responded to our report yesterday about the CEO ousting his Americas leader by, er, not really responding – after our scoop caused its share price to crash almost 19 per cent. As The Register exclusively revealed, Karan Puri, exec veep and GM of the US and Canadian operations, was shown the door after about 10 months …
All these big outsourcers are relying on the classic approaches to making money:
- Convince a CIO/CEO to fire their IT department and pay you to do it instead
- Make the deal's profit margin by making it impossible for the company to do anything not specifically written in the contract without paying a change order
- Make even more margin by sending all the actual work to India or similar cheap location
- Do the absolute bare minimum to avoid losing the contract, not a shred of work more
- Repeat, because said CIO has plenty of golf buddies you can sell your services to as well before the CIO gets fed up with your performance
Problem is with cloud and SaaS, it's actually advantageous for a company to have a smaller IT department in house that's more focused on application support. That's not compatible with a massive outsourcing deal.
- Make even more margin by sending all the actual work to India or similar cheap location
Sadly not. The deals are priced with as much work going offshore as possible as at 1/5th UK price it's what the customers actually want. Even when when they know it will take longer to do and quality will be lower, they figure they're maybe paying 2/5th or even 3/5th of onshore price in the end but that's still a lot cheaper.
It is madness.
Anon 'cos I still like my pennies each month. Even if it's unlikely to last much longer.
IMNSHO, outsourcerers seem to behave the same way. Expressed as pseudo-code.
Apply socialised psychopaths aka sales weasels to CEOs and boards who have the common delusion of PHB class that anything of engineering or technical matter is simple.
Apply $$ to political funding bodies
Apply contract lawyers to agreement with suckers/customer
Apply sword to customers staff
Do Until broke OR Bought
Apply sword to their own staff
Apply $BS to stockmarket until clients lost
Apply $MAX $$ to multiple PHBs
Done
Now gather round little ones...
There exists a tribe called the PHBs whose grasp on facts reason and reality is very thin
They believe that the most important thing for companies is efficiency and profit
They calculate this by money payed by in customers / money spent on techies
They reason that as they reduce the number of techies the more money they make from the customers
So if you reduce the number of techies to zero you have *infinite profit*
So if you reduce the number of techies to zero you have *infinite profit*
Right... but sometimes not for long. Then the customers who no longer can support their own infrastructure go to another company and profit starts to drop. Rinse, repeat until the customer goes belly up due to not having any IT to fall back on.
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