Thursday, August 27, 2009

Mega BP contract bagged by TCS, Infy, Wipro & IBM

India’s top three software exporters TCS, Infosys Technologies and Wipro, along with MNC rival IBM, on Wednesday, announced that they have won new outsourcing contracts from British Petroleum (BP) to be delivered over the next five years.

As reported by ET last month, India’s offshore outsourcing firms, including TCS, Infosys, Wipro and Mahindra Satyam had locked horns with MNC rivals IBM and Accenture over around $1 billion worth of outsourcing contracts to be awarded in August by BP.

While the companies did not disclose the value of new contracts, experts tracking the sector said Indian suppliers are expected to earn revenues in excess of $100 million each over the next few years from BP. “The total application development and maintenance contract value is over $500 million,” a UK-based outsourcing expert told ET on condition of anonymity.

BP, which used to outsource a majority of its application development, system integration and infrastructure management projects to almost 30 suppliers including IBM, Accenture, Mahindra Satyam and Infosys wanted to bring down its IT costs by up to 30% by working with fewer vendors handling more work at lower rates.

“Every business unit at BP was running its IT operations separately, with different set of suppliers. This led to complexity and higher costs of operations. With this consolidation, BP now wants to work with not more than six vendors globally,” a UK-based expert familiar with BP’s sourcing strategy told ET recently. He requested anonymity as he is not authorised to comment about these contracts.

When contacted by ET last week, a BP spokesman confirmed that the supplier review is nearing its end. “Yes, we have been reviewing our strategic IT providers, and are getting close to the end of that process, but I can’t confirm numbers of the current or possible future providers,” Robert Wine, a BP spokesman, had told ET last month.

Economic Times

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