EDS milking it after securing huge NZ outsourcing deal
EDS milking it after securing huge NZ outsourcing deal
Executives at IT outsourcing service provider EDS may be raising a glass of something a little stronger than the white stuff today after securing a seven-year, NZ$590 million (AUD$516.4 million) IT infrastructure outsourcing contract from the Fonterra Co-operative Group to help streamline its global infrastructure and generate cost-savings for its shareholders.
The Fonterra Co-operative Group is a leading multinational dairy company, owned by 13,000 New Zealand dairy farmers. It is the world's largest exporter of dairy products, exporting 95 percent of production to customers and consumers in 140 countries.
Fonterra's Chief Development Officer, Alexander Töldte said outsourcing enabled Fonterra to achieve its IT vision to establish and manage its IT infrastructure as an effective, integrated global services utility, operated on a "pay as you use" basis that would reduce costs and improve IT reliability.
"It delivers a large leap forward in terms of our global IT infrastructure service without a significant capital outlay. This infrastructure will be one of the major tools to support our business and our strategies."
Töldte said that the terms of the contract represented significant cost savings for Fonterra over the seven-year term.
"This is very much in line with our overall programme to reduce costs and working capital. The process we followed with constructing our financial base case and the rigorous response to our RFP makes us totally confident this represents a very good outcome for Fonterra."
The contract covers 327 offices in 34 countries in New Zealand, Australia, Europe, Asia, the Middle East, North and South America, and Africa. It encompasses all of Fonterra's IT processes including LAN, midrange servers, networks (voice and data), desktops and laptops, helpdesk services and utility software such as Microsoft Office and email systems such as GroupWise and Lotus Notes. The global outsourcing programme covers over 1,000 utility and application servers.
Töldte said the outsourced infrastructure would replace systems that represented a fixed cost for the co-operative and lagged behind in terms of service requirements and operational economies of scale. The contract ends a year-long process through which Fonterra examined the benefits of outsourcing and the capability of suppliers to meets its global needs.
"EDS was selected for the work after a rigorous, competitive process because it had proven experience and skill in integrating and operating global IT systems, and because it had a complementary global footprint," said Marcel van den Assum, Fonterra's Chief Information Officer.
Under the contract, 127 Fonterra staff and 10 contractors are expected to transition to EDS from March 1 in New Zealand and its offshore operations.
EDS New Zealand managing director Rick Ellis said that EDS is pleased about the opportunity to assist New Zealand’s largest global company to achieve its objectives through delivering an improved result for its stakeholders.
"The contract recognizes the strength of EDS's global IT service capabilities to deliver to Fonterra's growing global presence, while also acknowledging the company's significant operational base in New Zealand."
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