Tuesday, 17 September 2013

IBM throw in the towel at Southwest One - Are you watching Barnet

IBM who were the major shareholder of the Council outsourcing group Southwest One have sold their outsourcing business to the American Synnex Corporation. I am indebited to Conservative MP Ian Liddell-Grainger for alerting me to the demise of Southwest One on his blog.

Southwest One has been a problem from the start Not only has it run up liabilities of £45 million but is has only delivered a small fraction of the intended savings. As always it there is lots of talk about future/forecast savings but actual savings delivered are small.

The latest accounts show that the company is only remaining solvent because of IBM's support.

 So now that IBM's shareholding has been sold to Synnex, what will happen to the on-going business? Mr Liddell-Grainger reproduces an email sent to staff this week which says:

"We are currently working through exactly what this might mean for Southwest One.  As soon as we are in a position to give you any more information about this situation, and any impact it may have on Southwest One, we will update you as soon as we can."

So the poor staff are left in limbo but what about the services they are supposed to be delivering? Synnexx will use their wholly own subsidiary Concentrix to run the business and let's hope for everyone's sake they can sort out this mess.

 What really worries me is Barnet have entered a similar style joint venture contract with Capita for the DRS contract. Could we in Barnet be exposed to the same sorts of risks that have befallen Southwest One? We don't know because we aren't allowed to see the contract or any of the legal advice Barnet have been given. We just have to hope and prey that Capita make a better job of running things than IBM did at Southwest One.

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