Telecom closes in on outsourcing details

Telecom expects this week to have finalised how it will approach the market for potentially outsourcing most of its information technology. Corporate IS general manager Karyn Devonshire, who has driven a major review of Telecom's computing, confirms that IBM and and the ACE consortium (EDS and Andersens) will be among the outsourcing candidates. "This also includes looking at [other] offshore partners," she says.

Telecom expects this week to have finalised how it will approach the market for potentially outsourcing most of its information technology.

Corporate IS general manager Karyn Devonshire, who has driven a major review of Telecom’s computing, confirms that IBM and and the ACE consortium (EDS and Andersens) will be among the outsourcing candidates. “This also includes looking at [other] offshore partners,” she says.

A decision will be made this calendar year. “It’s highly unlikely we will outsource everything,” she says. “We will probably retain some critical IS capabilities.”

“Critical” has yet to be defined, though she says one such example is strategy and architecture.

No decision has been made yet on how staff will be affected. “We’ll work through staff [issues] should we get to that point.”

Up to 680 permanent staff and several hundred contractors could be affected.

Devonshire says she doesn’t anticipate any drastic impact on total IT expenditure. “It’s more about the way we spend.”

Gartner Group consultant Marion Broadbent has been retained as an external adviser for the outsourcing proposal.

Major recommendations on the review of IS functions and whether they were delivering maximum value went to the board on June 26, where they were approved by chief executive Roderick Deane.

Telecom is looking at all current and planned investments, to assess the value framework, financial value and the probability and the risks of achieving its business targets.

Further recommendations from this will be made to Telecom’s IS council — made up of senior executives — by the end of July. They in turn will make recommendations.

A framework which encompasses standards and guidelines is expected to be completed by the end of October.

“I don’t expect this will seriously impact existing supply arrangements,” Devonshire says.

“It’s highly unlikely that projects in train will be halted. I expect projects to continue and planned projects to start.”

In recent weeks, Telecom announced it had outsourced its desktop procurement to Wang, planning to replace its 10,000-odd PCs.

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