Re: Outsourcing (was IS Assets)

[eric.delong@xxxxxxxxxxxxxxxxx]

     I outsourced myself right out of a job once. It was understood at 
     the beginning that this was the goal, so I couldn't exactly say 
     that this was a "bad" experience, just a very strange one. ;)
     
     The company moved to Dallas, so I have no idea how well the service 
     company has performed. I do know that they're still in business, 
     just not how well they're doing.
     
     eric.delong@pmsi-services.com


______________________________ Reply Separator _________________________________
Subject: Outsourcing (was IS Assets) 
Author:  <MIDRANGE-L@midrange.com > at INET_WACO
Date:    8/4/99 5:05 PM


This reply got me thinking (always a dangerous thing to be avoided at all
costs).  Does anyone out there have any experiences with outsourcing
services for IS?  If so, are those experiences generally good or bad?  What
positives and negatives?

Just wondering...
Thanks.

-----Original Message-----
From: HankHeath@aol.com [mailto:HankHeath@aol.com]
Sent: Wednesday, August 04, 1999 2:27 PM
To: undisclosed-recipients
Subject: Re: IS Assets


To summarize responses to this point:

If you are part of the IS team asked to value the IS shop in a merger or 
acquisition, you can say 
* the hardware is worth the purchase price minus scheduled depreciation
* the purchased software is a very small fraction of the original purchase 
price
* developed software is worth whatever the purchaser sees it to be (this may

be a major feature of the transaction, as in a Web-based business, or 
meaningless, as in home grown accounting software)
* the staff is worth whatever it costs to replace the half of them that
leave.

Pretty dismal, unless you are a Web-based business. It would seem that 
generally we do not contribute much to the net worth of the company, from an

accounting perspective. At the same time, we do contribute a lot to the 
operational costs to the enterprise. 

In view of this, if I was palnning to sell a company, the first thing I
would 
do is outsource IS. I could rationalize that since there is little inherent 
value to be passed on, it makes sense to minimize the expenses by turning
the 
operations over to a professional firm. When the sale was transacted, the
new 
owner would not have to worry about software maintenance and staff turnover.

They would walk into a stable environment. Does this make sense?

Hank Heath

In a message dated 8/3/99 8:22:27 PM Eastern Daylight Time,
HankHeath@aol.com 
writes:

<< Here's a question that came up recently:
 
 If we are selling a business, how do we value the worth of the IS assets?
In 
 otherwords, on a balance sheet, what value is retained from IS during a 
 transfer to another owner? I can value the hardware easily. However, there 
 are also values that can be tacked on for software purchased and developed,

 the unique industry knowledge of the staff (if the new owner can retain 
 them), and the ruggedness of the environment. Has anyone a way of attaching

a 
 value to any of these last items? >>
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