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Thursday, March 30, 2006

Nissan : From Sole Source To Multiple Sources

Close to GM announcing it's much expected outsourcing decision, Nissan announces significant changes in approach towards IT services outsourcing. Nissan outsourced its entire operations to IBM in 1999, but is now returning its business analysis, architecture and other strategic IT functions in-house and is hiring new workers. The decision seems to resemble in many ways but not entirely like the decision that J.P.Morgan took on outsourcing almost an year back. Robert Greenberg recognized that the world has changed pretty substantially since the original outsourcing was done, both in terms of the competitiveness of the outsourcing marketplace and the increased use of offshore vendors. He shares his perspective –"One of the things that also took place with the original outsourcing to IBM was we probably outsourced too much. when you’re outsourcing: how much to outsource is always a contentious point". In his view, Nissan had outsourced a lot of the business analysis activity, the program management activity and the application and infrastructure architecture activities in addition to the physical execution & has now decided to bring those back internal and are now going though a fairly large hiring effort at the moment in order to do that. Besides, Nissan has made a decision as well to move its corporate headquarters from L.A. to the Nashville area. In terms of the deal constructs, as he sees it, there are very significant savings. In terms of what Nissan gains from a business linkage standpoint. I am not adding any comment( for obvious reasons) on this except for saying this approach looks interesting

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
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