Aecom IBM outsourcing deal was forced on CIO Tom Peck by former COO Steve Kadenacy, claims new source

New inside source tells Computing that former Aecom COO Steve Kadenacy was behind the outsourcing deal with IBM

A new inside source has told Computing that Aecom COO and President Steve Kadenacy was behind the controversial deal to outsource IT to IBM.

The source, who didn't want to be named, corroborated what previous sources have stated, that CIO Tom Peck was forced to implement the outsourcing strategy, against his wishes.

"The entire IT outsourcing idea was forced on Peck by Steve Kadenacy, who was ousted last year in a fallout with [chairman and CEO] Mike Burke and [Innovation and M&A Lead] Jeff Stein."

Kedanacy earned just under $12 million in his final year with Aecom, according to salary.com.

[They] claimed that they could save Aecom $150 million in the first year alone if they outsource IT to IBM - who would in-turn, outsource most of the jobs to India

The source went on to state that construction and engineering giant Aecom has struggled in recent years to meet profit expectations, "mainly driven by the fact that they have not been able to deliver a profit in the US and Canada for years".

However, Aecom's share price is significantly higher now than at this point three years ago.

The source added that the firm decided to cut costs, which was the main driver behind the outsourcing deal.

"Steve cut costs with a passion. IBM came into LA for a meeting with Steve and claimed that they could save Aecom $150 million in the first year alone if they outsource IT to IBM - who would in-turn, outsource most of the jobs to India. Steve agreed, and told Tom Peck to make it happen."

The source also claimed that Peck struggled to run IT. "Even before the IBM deal, Aecom IT was mediocre, at best. For example, an attempt to develop a new project management system failed under Peck.

"In the end, it was all Steve who forced the outsourcing," the source claimed.

A previous inside source described Aecom as a "sinking ship" which is losing all of its skilled IT staff.