US chemicals and energy group DuPont has handed over the running of its IT systems lock, stock and barrel in a massive $4 billion (#2.35 billion) outsourcing contract announced last week.
The 10-year deal, which involves 60,000 desktop PCs, is claimed to be the largest of its kind ever struck.
Computer Sciences will be responsible for the bulk of DuPont's IT, including its global information systems and technology infrastructure. Andersen Consulting will take over the running of DuPont's chemical and energy business IT solutions.
A spokeswoman for Computer Sciences said over 2,600 DuPont IT staff would be offered jobs with the services company and that no jobs would be lost as a result of the deal. DuPont will retain around 1,100 IT employees, including a leadership and management team which will be responsible for IT architecture, standards and worldwide procurement. The remaining 500 will be offered jobs with Andersen Consulting.
According to the Computer Sciences spokeswoman, the contract will reduce DuPont's IT services spending by between 5% and 10% a year.
"Geographically the contract covers the US, Canada and Europe and includes three mainframe centres, six mid-range datacentres, distributed company servers covering around 60,000 desktops plus LAN connections, Unix workstation terminals and printers," she said.
The deal also covers telecommunication systems, including voice, data, video and wireless. Computer Sciences will also provide helpdesks, security and disaster recovery and will be responsible for more than half of all current application work for DuPont, including all its SAP applications.
Cinda Hallman, vice president and CEO for DuPont's IS division, said the deal was aimed at cutting costs and improving response times.
"Working with Computer Sciences in this new alliance will allow DuPont to increase our flexibility and speed of response to our customers' needs and convert fixed costs to variable costs. This is also a great opportunity for our IT people to improve their capability through world class training and development opportunities," Hallman added.
The deal is expected to be finalised by next April.
Despite reassurances from all involved that the deal will result in no job losses, this remains to be seen. All too often with outsourcing contracts, IT staff at the user organisation concerned transfer to the service company, only to find their services are no longer needed once the contract comes to its natural end. It is interesting to note that the companies involved have shied way from calling this an "outsourcing contract", preferring instead to describe it as a "technology alliance".
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