Fletcher Challenge halts outsourcing deal

Fletcher Challenge has called a halt to what was to have been one of the biggest outsourcing deals in New Zealand.

Fletcher Challenge has called a halt to what was to have been one of the biggest outsourcing deals in New Zealand.

Moves to sign a massive multimillion-dollar contract with Unisys - named preferred vendor last November - began turning sour midway through the year when Fletcher Challenge decided it might be cheaper to do its future computing in-house.

Computerworld understands that none of the business divisions accepted Unisys’ original proposal. Contracting companies also told Computerworld that they had been approached by third parties to provide resources for an in-house operation.

Unisys was told to come back with a better offer, but after prolonged and difficult negotiations between the parties Fletcher Challenge has decided to postpone the whole deal indefinitely.

Fletcher Challenge spokesperson Clive Litt - who has since left the company - said a fortnight ago that Fletcher Challenge was reviewing the future of its divisions and had put the possibility of a companywide outsourcing solution on hold.

Fletcher Challenge sold its paper division to Norwegian company Norske Skog at the end of July and is also considering the sale of its Forests and Energy subsidiaries.

The link between vendor and company may not be entirely severed, however. Litt also said a proposal between Unisys and Fletcher Challenge Building to build and implement a new network was still being scoped.

Unisys would not talk about the defunct deal, saying all comment had to come from Fletcher Challenge.

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