Vodafone appoints EDS and IBM in global IT outsourcing deal
Vodafone has agreed the terms under which EDS and IBM will manage its application development and maintenance services in a global IT outsourcing deal. The move forms part of Vodafone’s strategic commitment to reduce costs while leveraging its regional scale.
Vodafone’s operating companies in Germany, the UK, Hungary and the Netherlands will work with EDS as their outsourcing partner. Vodafone’s operating companies in Spain, the Czech Republic, Australia, New Zealand, Portugal, Ireland, Greece, and, subject to board approval, Italy, will work with IBM as their outsourcing partner.
Each contract is set to run for seven years with Vodafone retaining the right to bring it to a close earlier if required.
We are confident that our chosen outsourcing partners will not only deliver cost savings, but also an enhanced service,
said Steve Pusey, Chief Technology Officer, for Vodafone Group.
We look forward to a longstanding and productive partnership with both of them. Each outsourcing partner will provide application development and maintenance services for key IT systems.
Vodafone will retain full strategic control of the initiative, which focuses on writing code for and maintaining systems such as billing and Customer Relationship Management applications.
Vodafone expects that the first wave of Vodafone operating companies will begin to adopt the new arrangements from early 2007, with the others following suit throughout the rest of 2007.
We are pleased to have been selected by Vodafone to manage its applications development and maintenance in Northern Europe.
said Bill Thomas, vice president and general manager, EDS EMEA.
By applying our applications expertise and leveraging our global operations we will assist Vodafone in the delivery of its strategic commitment to reduce costs while developing new services. We are committed to delivering an outstanding service.
With this agreement, IBM will help Vodafone to focus on its core business.
says Mike Hill, General Manager, Global Telecommunications Industry for IBM.
IBM’s extensive telecommunications industry knowledge and experience will also help Vodafone to accelerate its business transformation programme, drive down costs and increase innovation to deliver competitive advantage.
As previously announced, Vodafone has identified the potential to reduce unit costs by 25 to 30 percent within three to five years.
Activity levels on application development and maintenance during the last financial year resulted in a spend of around GBP 560 million.
Under these deals, the number of application development and maintenance suppliers currently used by the Group is expected to be rationalised by the two partners, bringing greater economies of scale.
The Group also anticipates that the initiative will result in improvements to the quality of software produced, as well as greater flexibility, leading to the faster roll out of more varied services to customers.