Outsourcing freeze appears to be thawing

Last month, outsourcing advisory TPI told Information Age that the recession had caused a ‘hiatus on decision making’, preventing large organisations from signing large outsourcing contracts. More recently, though, there have been signs that hiatus has come to an end.

Most noticeably, insurance giant Zurich last week signed a $2.9 billion, ten year contract with IT service provider CSC, which will manage the company’s datacentres and infrastructure. CSC will be responsible for consolidating and virtualising Zurich’s server estate.

On a more modest scale, life insurance company Equitable Life this week announced that it awarded Indian IT and business process outsourcer HCL Technologies a $200 million contract to administer its existing policies.

Equitable Life closed to new business in 2000 after a House of Lords enquiry found it to have sold unlawful policies. The HCL contract will last until the final policy expires in around 30 years’ time.

In a significant development in local government IT, Cardiff County Council announced earlier this month a 15-year technology contract with Indian IT services provider TCS. It is believed to be the first time a UK local authority has used the services of an Indian provider, although it is not technically an outsourcing deal.

“It is important to stress that this isn’t an ‘outsourcing deal’ and the new partnership with TCS will not involve any council staff being transferred to the private sector,” council leader Rodney Berman wrote on the Guardian newspaper’s Public website earlier this month.

TCS will support the council’s document and information management processes using a system it has designed for public sector clients, named ‘Digigov’.  A new innovation centre is to be built which will house the council’s existing IT staff as well as TCS employees.

Last week saw another innovative engagement, as CSC expanded its current contract with the Royal Mail Group. CSC will manage the organisation’s switch to Microsoft’s Business Productivty Online Suite, that includes cloud-based versions of its Exchange, Sharepoint and Office Communications software, hosted by Microsoft.

CSC said it was the first Microsoft partner “to lead and win a cloud computing services agreement of this scale”.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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