A desperate embrace.
Economist (US), The, November, 2004
Companies do not always outsource for the best of reasons
IN 2001 and 2002, KPN, a Dutch telecoms carrier, signed several long-term deals to outsource 80% of the work done by its IT department to Atos Origin, a European provider of IT services. Three years later, both parties are still putting a lot of effort into reworking these contracts. It shows that not all decisions to outsource are straightforward and problem-free.
In 2001, KPN, like most telecoms firms, was in desperate trouble: having run up huge debts as it expanded during the telecoms bubble, it was close to bankruptcy. Atos Origin said it could help, and not just with the IT. In return for a guarantee from KPN to buy about euro300m-worth of IT from it every year for the next six years,...
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