Saturday, February 25, 2006

State educators drop IBM contract

This is an interesting note of caution for firms doing development of transactional and longitudinal systems with state partners. States have the capacity to just walk away from deals. It is often a political necessity. Given the costs associated with large external contracts, it can be politically expedient to take over large projects. I think we will start to see many states and larger districts drop expensive data warehouse and decision support tools in favor of roll-your-own solutions using Oracle or Microsoft tools. The labor costs for out-year maintenance and updates will be far lower. More importantly, state agencies are figuring out that it is critically important to have the human capital to design and build these tools in house. Those skills are a crucial part of organizational improvement efforts. Outsourcing that work can create a critical skill gap.


1 comment:

Anonymous said...

I dunno, Chris.
Like you, I'd like to see states build capacity to roll-their-own so to speak. SEAs need across-the-board capacity and skill enhancement, and teh resources for it. That's not to say they're not capable now, but to stress that much more will be needed. Many SEAs still work from a compliance mode, and that won't take them where they need to go.

On the other hand, the legacy of systems built by SEAs and large districts is not particularly strong. A good argument can be built that careful choices of well-integrated third-party applications is efficient and cost-effective, especially when the improvements need to come hard and fast.

Maybe the problem is less one of technical capacity than one of foresight about what's needed and why?