KPN and Atos Origin: Salvaging an IT Outsourcing Deal

In late 2003, Willem van Oppen, Chief Procurement Officer of KPN, the incumbent telecommunications service provider in the Netherlands, had to confront an outsourcing project gone sour. Two years prior, in one of the first major outsourcing deals at KPN, a substantial part of its IT services were outsourced to Atos Origin. However, KPN felt it was facing a supplier that had not demonstrated the value-adding capabilities which KPN strongly emphasized throughout the outsourcing decision process. Atos Origin was experiencing continuous problems in the daily operation of KPN’s IT support processes and seemed reluctant to make any fundamental improvements. Some managers were pushing the newly established procurement organization and, in particular, the IT category managers to get a better grip on the outsourcing deal, and some were even challenging the outsourcing decision itself.