Telecom is likely to carve up information technology work among several suppliers after its $1.5 billion outsourcing contract with Hewlett-Packard expires this year, or hand over the work to IBM, industry sources predict.
EDS, now part of Hewlett-Packard, snared the biggest prize in the technology industry in 1999, when it beat IBM in a duel for what remains New Zealand’s largest IT outsourcing contract.
It is understood IBM has proposed that Telecom hand over even more of its business to the company as part of an expanded outsourcing deal that could also see IBM take over some parts of Telecom’s in-house IT business, Gen-i.
But industry sources tip that a more likely scenario is that the work would be split among several suppliers, including multinationals and possibly Indian outsourcing companies. Some tasks – such as desktop support – may be brought back in-house under Gen-i.
Telecom spokesman Ian Bonnar says no decisions have been made. “We thought it was important not to constrain anyone’s thinking so that we could consider new and innovative ways of delivering the shared technology services part of our business in an as effective, efficient and customer-focused manner as possible.
“As such, we have asked the various vendors to put forward their proposals to us in the form of `white papers’. We are still at the white paper stage, so it’s impossible to say how things might play out.”
Several world-leading technology companies took part in workshops held by Telecom this month, he says. “Clearly any other commentary regarding the actual outcomes of this process is just speculation.”
Telecom is Hewlett-Packard’s largest local customer and as such it would be battling to retain some of the business, sources say. It has supplied a large amount of its own hardware and Sun servers to Telecom.
Fonterra, which awarded a $590m seven-year outsourcing contract to EDS in 2004, partly unwound that deal last year, saying the era of all-encompassing outsourcing deals was over.
Source:http://www.stuff.co.nz/business/industries/3257745/Telecom-may-share-out-IT-work
