Many of the world's largest organizations are unhappy with their IT and business-process outsourcing engagements, according to "Calling a Change in the Outsourcing Market," a new study by Deloitte Consulting. Fact is, companies have been falling in and out of love with outsourcing for more than a decade. In the mid-1990s, New York-based insurer MONY, citing morale and other problems, cut short its seven-year outsourcing contract with Computer Sciences and reassembled its in-house IT organization. Chip maker LSI Logic bailed on a five-year deal with IBM Global Services, lamenting that outsourcing leads to a "dysfunctional" separation of technology and business processes. In 2002, Bank One ended a $2 billion outsourcing agreement with IBM and AT&T, with CEO Jamie Dimon citing the bank's need to "control its own destiny." As president of J.P. Morgan Chase, which acquired Bank One last year, Dimon scuttled a $5 billion outsourcing deal with IBM for similar reasons.
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