IBM is the new Accenture

File this under "Privatization Blues".

The $863 million IBM Corp. contract to consolidate the computer data centers of 27 state agencies offered the promise of doing more for less.

IBM and its partners -- the Team for Texas -- would modernize and streamline how the agencies store and protect their data. And the state would save $178 million over the seven-year term of the contract, which began in April 2007 .

But many of the agencies involved say they are actually paying more to get less, as indicated by IBM's customer satisfaction score in August that hovered just above poor.

In the past few weeks, the agencies have won a powerful ally in Gov. Rick Perry, who called for work to stop after IBM's failure to back up some critical data came to light. IBM now faces the possibility of losing the contract if the company does not quickly fix the backup problems that have plagued the mammoth project.

As state officials wait to see whether IBM delivers on its promise, the question remains: How did this much-ballyhooed project go so wrong?

Interviews with industry experts and state officials suggest that the state and IBM share the blame.

State officials, including legislators, were unrealistically ambitious by requiring the contractor to move quickly to centralize all the functions of the data centers, which all had different equipment and applications, said Jim Moreno , who retired as a system administrator in May after 17 years with the Texas State Library and Archives Commission.

And IBM overreached with an aggressive plan that did not reflect the true cost of the work, critics say.

Yeah, that sort of thing never happens in outsourcing situations. No one could have predicted that!

The Texas secretary of state's office gave the IBM team, which includes Pitney Bowes, Unisys and Xerox, a customer satisfaction score of 0 on a scale of 1 to 5.

"Team for Texas seems unable or unwilling to correct shortcomings that have been evident for months," the secretary of state's assessment said.

The Texas Facilities Commission said, "August was a bad month for IBM performance," citing one example when a 15-minute task took one month to perform.

"I award you no points, and may God have mercy on your soul." Sorry, couldn't help myself. Some earlier news on this saga is here. Whether the state of Texas has learned its lesson from all this remains to be seen, but most likely the answer to that question is "no".

Posted by Charles Kuffner on November 17, 2008 to Show Business for Ugly People