H-P and the Challenges of Outsourcing

H-P moved to buy a bunch of new outsourcing business this spring when it agreed to pay more than $13 billion for services giant Electronic Data Systems, a deal set to close August 18. Meanwhile, the computer giant has learned that holding on to outsourcing customers isn’t always easy. Outsourcing isn’t easy Deutsche Post–the parent company of DHL–appears to have had second thoughts about a big outsourcing agreement that H-P announced in January. Information Week reported last week that Deutsche cancelled the deal because it wouldn’t provide adequate cost savings. Cost savings are a big point of outsourcing deals. When H-P’s deal with Deutsche Post was announced, H-P said in a press release that it would save Deutsche Post “at least 1 billion euros over the next seven years by driving down overall IT costs and better... [read full story]