Sunday, February 21, 2010

IT Outsourcing Trouble - EDS is Sued by Client for Failing to Deliver on Sales Pitch

EDS (now owned by HP) has been ordered to pay former client British Sky Broadcasting (BSY) damages in the amount of approximately 400 million dollars (over four times the original contract amount) for failing to deliver on a customer service program. The core issue revolved around what EDS promised to deliver in the sales pitch and what they actually delivered. Those that follow the IT industry are well aware that these types of issues are more common (and more public) for software vendors, such as the Nike-i2 debacle back in 2001. However, according to the article, IT outsourcing disputes like this rarely make it to court, but given BSY’s success it may be a harbinger of things to come for outsourcing providers. Read the article.

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