BP has reduced its IT vendors from 40 to 5. IBM, Accenture and the three Indian musketeers – Wipro, TCS and Infosys – are the chosen five. It takes a lot of gumption for any company to reduce the vendor dependency.
When I first heard the news, I was like, wow. I thought that is what simplification is all about. Or the fancy word for that is lean. I still hold by that. But a bigger question dawned on me.
Is switching vendors that plug and play? For IT, nothing ever is plug and play. Though everything promises to be plug and play there are these residual things which challenge the notion of plug and play.
Bringing 40 vendors to just 5 needs a lot of diligence. There is a lot of Intellectual property retention. Software developers are really not good at telling us what they have done. The documentation is really poor. This is the general perception of the industry.
Then how did BP manage to eliminate 35 IT vendors? If BP allows, this would be a management case study. When Satyam happened, many of its clients chose to stay with Satyam. It is not that simple to switch vendors. That showed the world the dark truth about outsourcing. You can get it but you cannot get out.
What BP has done challenges that hypothesis. But, it brings up another question. In fact two questions.
- Can the smaller IT companies still think of getting bigger clients?
- Has BP put all its egg in too few baskets?
PS : The 5 vendors wield enormous power and replacing any of the 5 vendors would be difficult. But they are top most companies you can hire to run your business. That kind of negates the thought but is it all eggs in few baskets?
PPS : I also like this news especially because BP chose to downsize the vendor instead going the way have we done much of outsourcing, let’s get the technology and in-source it bull shit.