Sainsbury's - the end of outsourcing?

I certainly hope so
I hope this is the end for outsourcing. Outsourcing has a flawed concept at its centre - the idea that IT isn't core to a business, the idea that somebody else is 'better' at IT than you are.

Outsourcing only works if you share resources with other clients of the service provider - much as you do with an accountant. If you want dedicated resources, dedicated equipment and service contracts with silly risks in them, then IT will end up costing you much, much more than if you did it in-house.

With outsourcing you have to pay for all the contracts the service provider didn't get, plus an army of marketing men and smooth suited salesmen. The cost of all that runs into millions of pounds. You pay the cost either in cash, or in a reduction in quality of service. Unless you're getting massive scale economies then the books don't balance because in-house IT has none of that - just a problem with efficiency and competence.

Doing IT right is hard and expensive - primarily because the veneer of competency in IT is very thin indeed. Try and do it on the cheap, or without the absolute commitment of the board and you will have a disaster.

Just In Time?
I'd love to see the spec that Accenture were given. My guess is that JIT stock philosophy dictated that more emphasis was placed on maintaining near-zero stock levels than on avoiding stock outs of major lines. In an industry where trade debtor levels are close to nil, is Sainsburys the only firm to put juggling with liquidity above buying stuff and then selling it at a profit? I have given up on visiting large electrical 'retailers' who tell me that the item I want to buy is "for display purposes only" and that I will have to wait 7 to 10 days for one that can actually be sold, the Internet being quicker and cheaper.

Apologies for the Grumpy Old Men outburst - I was in retailing many years ago and I'm amazed at the contempt so many retailers show for their customers these days.

IT service sourcing
I believe the problem is not necessarily related to where a company seeks to source its IT services from. I believe it is more fundamental.

With the advent of PC's and their ideology, a generation of "semi skilled" "IT" professionals has been created. Bill Gates must accept his share of the blame for this. The basic tools we have today are either 4 or 5 GL's, and by their very nature, they de-skill the IT environment.

Many modern so called "IT" professionals are little more than "super users" of products created by someone else. Microsoft products are an excellent example. Other than those directly employed by MS. on developing their products, few people have the ability to really solve users' problems with these products. Most work in a "help desk" mode.

In my long (38 years) and varied career in IT, I have used many products, and the worst in realtion to producing user friendly systems, have always been the 4 and 5 GL's. I currently use Powerhouse products, which I believe to be the most difficult products that I have ever had to use, bar perhaps RPG 400.

If the systems that companies use are not "bespoke", written in an appropriate procedural language, then whether the service is outsourced or not, doesn't matter. The ability of the service provider to produce efficient user friendly systems is impaired.

If problems are experienced by IT service providers in the likes of SAP, Peoplesoft or IFS, to name a few, they have little choice but to escalate the problem to the package supplier with the encumbent loss of specific business knowledge of that company's affairs and IT infrastructure.

I also place some blame on the educational establishments which have traditionally been hostile to IBM, such that many students exhibit a blank stare when asked if they understand EBCDIC. They have no perception of COMP or COMP-3 fields which do not exist on PC's.

The complexity and inefficiencies of relational data bases must also share some of the blame for poor IT systems. Network data bases , e.g IDMS, TOTAL and IMAGE, are inherrently easier to manage and more efficient than relational data bases. I suspect that hierarchical data bases are also more managable than relational data bases.

So I believe that unless we begin to shed the PC ideology and its encumbent problems, we will still face the problems being experienced by the customers. "Impossible!" I hear you say. Well the flavour of the decade, i.e. "outsourcing" is clearly being seriously questioned. Why should the industry not question the effectiveness of modern PC technology and ultimately press for its demise?

Competent people needed, inhouse or outsourced
As a retired computor professional, I can remember plenty of examples of outsourcing being used to provide a solution when the firm lacked the required skills, & of excellent results provided in house when the customer had the reuired skills base.
(There was one case when an IBM customer clearly had better skills than IBM, this was at the time of IBM dominance.)
On the other hand, if you do not have the right people, & cannot provide the right specifications to the programmers, there will be a disaster in house or outsourced.
The advantages (or disadvantages) of going in or out are mainly marketing hype. The one exception is where a group of firms has almost identical requirements, & there are obvious cost savings from sharing development.

Other people's software
I agree that there can be difficulties with taking over software written by a third party, especially if it's poorly written, but it's a little strong to suggest that it's impossible to enhance it further just because you didn't write it. Of course you need decent internal documentation and adherence to agreed standards of programming to have any real chance of fully gaining control of something where you had no part in writing it, and I would hope that Sainsbury's at least had design authorisation over Accenture, and approved changes and extensions (and enforced coding standards). If they didn't, then as you say they could have a very serious problem (which can probably only be addressed by acquiring key staff from Accenture).