Global CIO: Indiana To IBM: Drop DeadGlobal CIO: Indiana To IBM: Drop Dead

Instead, she said, the state has submitted bills to IBM to recoup some of its funds. FSSA officials could not immediately say how much money the state is seeking.

It seems that big outsourcing deals like this are becoming more and more like offensive linemen in the NFL: you only hear about them when there's a problem or a penalty. And from Indiana's perspective, there were plenty of problems with IBM's attempts over six years to automate the state's widespread welfare operations. Again, from the indystar.com article:

(Gov.) Daniels canceled IBM's contract after there were numerous complaints from legislators, advocates for the needy and the public about a dysfunctional system in which many people were wrongly denied assistance and in which paperwork was lost, forms sent to wrong addresses and phone calls never returned.

IBM's clearly in a tough spot here. Even if IBM were to offer a differing view of its performance on the Indiana deal, the fact is that the client considered IBM's work to be unacceptable and decided to extract itself from the deal early and to try to cobble together a "hybrid" system that takes advantage of some of the work IBM completed while also reinserting more face-to-face interaction into the overall process.

With its extensive public-sector business as well as its overall reputation as one of the world's preeminent IT integrators, IT services providers, and business-process experts, IBM is probably eager to settle this matter as quickly and uncontentiously as possible.

On the flip side, $125 million is a lot of scratch, even for a company of IBM's size—and in today's tough market, can the company afford to walk away from all or even some of that revenue it claims it is owed?

No, it appears that this will be less of a disengagement and more of a disentanglement for some time to come.

RECOMMENDED READING: Global CIO: IBM Took 'Goldmine Of Taxpayer Money,' Claims Bureaucrat Global CIO: IBM Sees Surge In Customer Transformation Projects Global CIO: The Top 10 CIO Issues For 2010 Global CIO: If IBM Needs Big Growth, Who's On Acquisition List? Global CIO: Why IBM CEO Sam Palmisano Earned His $24.3 Million Bob Evans is senior VP and director of information's Global CIO unit.

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