INFOSYS, TCS BAG LARGEST BPO DEAL
In a historic deal for the Indian outsourcing industry , ABN Amro Bank has given
a contract of 1.8 million , spread over five years ,toIBM as well as two Indian companies, TCS and Infosys.
The lion share of the deal (1.5 billion ),which will focus on IT infrastructure management has gone to IBM. The Indian software houses ,TCS and Infosys will provide the application support and enhancements and share remaining portion of the deal .The infosys deal is worth more than 108 million (about Rs 569.7 crore) while TCS will get about 200 million(about Rs. 1,105 crore ) over the next five years.
According to ABN Amro, the contract will result in 1500 manpower redundancies through the next 18 months and will reduce the number of IT jobs within the group from 5000 to 1800. About 2000 jobs will be transferred to IT companies a majority of them to IBM.
There is also a non-committed component in the deal that includes application development .This has been contracted to IBM, Infosys ,TCS, Accenture and Patni Computers.No figures have been announced for this non-committed portion of the contract.
The deal is broken up into geographical units. Infosys has got a part of it in North America ,a part in Europe , mainly in the Netherlands and Luxembourg.TCS through centres in Latin America and Hungry , will manage a major part of ABN Amro application support and enhancement services for its operation in the Netherlands, brazil as its private client business globally. This is a landmark deal for Infosys
This clearly indicates that large offshore players like us to have a competitive business model to deliver large , global , multi-year contracts .Its also signifies a trend towards strategic global outsourcing where customers are selected multiple . best-of – breed vendors to help to improve efficiencies in their IT service delivery
The company share of the overall contract includes committed volumes in North America ,Europe and Asia –Pacific and deal size is expected to increase to more than $240-250 million over this period according to Infosys.
CFO T V Mohandas Pai.
Says S Ramadorai ,CEO,TCS , “This is the multinational global engagement that allows us to utilise our model in its entirely .In addition to our engineers here in India . more than 500 consultants will work from TCS global delivery centres in Brazil and Hungry”.
All the five vendors, including Patni willprovide application support says Deepak Khosla vice-president(marketing) Patni Computers , “ Our verticalisation strategy and focus on the financial domain has paid off--- especially after acquisition of the US firm Reference Inc which was into financial sevices.”.
Sid Pai, partner and MD,Technology Partners India (TPI) the sole dealadvisor which conducted the negotiations says this is the largest contract to come directly to Indians firms benefit but ABN Amro will achieve a number of its goal s from a strategy perspective which include globalization of its platform and standardization of its service offerings , he added.
***************************