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Mega UK outsourcing deals come calling

Started by dhilipkumar, Apr 30, 2009, 10:40 AM

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dhilipkumar

Mega UK outsourcing deals come calling

A few weeks after TCS won a contract from the UK's Child Maintenance and Enforcement Commission (CMEC), another state-owned organisation Transport for London (TFL) is seeking vendors for an outsourcing contract worth around $100 million, as the country's transport organisation seeks to consolidate its information technology helpdesk and serve around 30,000 of its staffs better.

The contract is the second in a series of deals worth around $2-3 billion being pursued by offshore service providers, including TCS, Infosys and Wipro from the UK's state-owned departments. When contacted by ET last week, a spokesperson at TFL said his organisation would be open to work with offshore outsourcing firms.

The UK aims to save almost $10.6 billion annually by lowering costs of back office and IT operations across its state-owned departments, and outsourcing could help the country achieve these savings, according to experts. "The notice placed, by TFL seeking expressions of interest for the delivery of IT helpdesk services, is open to offshore companies," said Edith, a spokesperson for TFL. "The contract would comprise the management of staff calls for desktop support, email services, desktop services, application support, server infrastructure, end-user hardware procurement and asset management," he added.

The contract also involves managing IT systems for around 18,000 users at TFL, which hopes to save almost $3.5 billion by making its business processes more efficient.

At a time when protectionist lobbies in the US are asking the Obama administration to curb offshore outsourcing, the UK is seeking to bring down operational costs of its public sector systems by outsourcing non-core IT and back-office projects.

A review of the UK's public sector IT spending by the country's treasury department earlier this month identified the potential of around $10.6 billion in annual savings. Government IT spending in the UK is estimated to be around $36 billion every year, Bob McDowall, research director at TowerGroup Europe, told ET.

"Back-office operations and IT, led by Martin Read, recommends better management information, benchmarking and review of costs, and better governance of IT-enabled change programmes to achieve $5.9 billion of savings a year on back office operations, and $4.7 billion of savings a year on IT spending," HM Treasury said in its study titled Operational Efficiency Program.

The UK's state-owned departments are seeking help from the Indian offshoring industry for bringing troubled government technology systems back on track and lower the cost of managing government IT systems anywhere between 25-40%. The UK's national healthcare modernisation programme pegged at almost $9.6 billion is among some of the initiatives that failed to deliver.

Apart from the troubled National Health Service (NHS) modernisation programme, which needs restructuring, HM Revenue and Customs (HMRC) will also seek to outsource more work, as the department plans to make it mandatory for firms employing more than 50 employees to file tax related and other information online by 2011. "The UK government IT projects almost always suffer from scope creep, financial and time overrun of a significant dimension," McDowall had said.


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