German enterprises remain cautious about outsourcing

Even though Deutsche Bank AG decided last year to outsource its IT operations to IBM Corp., German enterprises remain generally wary of handing over the keys to their computer rooms, according to one German outsourcing expert.

Many have yet to be convinced that they’ll save money by outsourcing their IT operations, while others are concerned about losing their in-house IT expertise, Hans-Peter Ullrich, marketing director of TeraGate AG, said Monday on the sidelines of the FiberComm conference in Munich.

TeraGate is one of several German companies providing a range of IT services in the country, in addition to a handful of global players, such as IBM and Electronic Data Systems Corp. (EDS). Deutsche Bank Industrial Holdings AG is an investor in the German IT service provider.

“The Deutsche Bank deal is really an exception in Germany,” Ullrich said. “A lot of companies here are still unwilling to consider outsourcing because they don’t know if they’re actually going to save money on IT in the long run or pay more. Mistakes were made in the past, and they were costly.”

German enterprises are also worried about losing their IT experts and relying too heavily on others not only to manage their business-critical IT systems but also to make critical technology decisions moving ahead, according to Ullrich. “There’s definitely a trust issue,” he said.

DaimlerChrysler AG, according to Ullrich, is one example of a German company that has gone the entire gamut: The German half of the group had initially developed a huge pool of in-house IT expertise before launching a subsidiary, Debis Systemhaus GmbH, to take over this business and later operate as independent outsourcing company, according to Ullrich. The group then sold Debis to Deutsche Telekom AG to focus on its core car making business.

Since then, however, DaimlerChrysler has been amassing substantial in-house IT expertise, according to Ullrich. “DaimlerChrysler knows how important IT is to the company,” he said.