Beating IT Risks

Chapter 7. IT service providers and vendors

A bankrupt service provider

You may recall our mention of SWIFT's 99.999% availability claim in Chapter 5 on IT service continuity. SWIFT also has service providers:

We are closely monitoring the situation of our network partner, Global Crossing, which filed for Chapter 11 on 28 January 2002. We have taken all precautions to guarantee that there will be no threat to SWIFT's network services, whatever the outcome of Global Crossing's effort to restructure and deleverage its balance sheet. Phase 1 of our agreement with Global Crossing involved the transfer of our X.25 (FIN) network and SIPN (IP) network assets from SWIFT to Global Crossing. Should it be necessary, SWIFT can reverse this process and resume full control and ownership of both networks. Leonard Schrank, SWIFT CEO (SWIFT, 2002)

A bankrupt initiative

The Libra project in the UK is an outsourcing initiative gone terribly wrong:

The cost of the Libra project – designed to provide a UK national system for 385 magistrates courts – soared from £146 million to £319 million. The main supplier ICL (now Fujitsu Services) twice threatened to withdraw unless it was paid more money and issued deadlines for officials to make a decision on whether to renegotiate the contract ...

(IntoIT, 2003, pp. 10–11)

The IT service delivery value chain relies on a wide range of external service providers and vendors. The value chain is as vulnerable as its weakest link. Doing IT all in-house is not an option for ...