Oil major BP handed out a major IT outsourcing contract to five global IT companies. The deal has been awaited for long and comes at a time when deal flow has slowed down for the software sector. While the deal value was not disclosed by the companies who got the award, this story by Mint has quoted a BP spokesperson attributing the deal value at $1.5bn. BP will save about $500mn by reducing its number of vendors to 5, says the report.
The contract value is estimated at $1.5bn spread over five years, or $300mn annually. The actual division may vary depending on the order terms; usually the first year has a lower billing component.This $300mn will be further split between 5 companies, IBM, Accenture, Infosys, Wipro and TCS. BP has been working for the past 12 months on this contract, to consolidate its application development and maintenance contracts given to scores of vendors.
IBM claims to have got the largest share of the pie. It will run all of BP’s enterprise applications and integrated service desk responsibilities. They have been selected as a strategic ADAM vendor for global SAP maintenance and system development center. IBM Global Business Services will manage SAP applications including enhancements and continuous improvements both at client sites and from TBM’s global delivery centre, saud the company in a statement. The IBM press release can be read here.
Accenture will provide IT application development services to BP; it will simplify, standardize and consolidate BP’s IT software applications to achieve efficiency and meet BP’s objective of managing IT costs. BP’s expects Accenture to accelerate SAP implementation and lower the overall cost base. The Accenture press release can be read here.
Infosys, Wipro and Tata Consultancy Services (TCS)
Infosys Technologies will operate a large portion of business systems for BP under an application outsourcing and support agreement. It will do ADAM work for the Integrated Supply and Trading and Exploration and Production business segments of BP. The Infosys press release.
TCS has got the contract for refining, manufacturing and corporate IT maintenance work. BP also expects TCS to get opportunities to provide IT solutions for the upstream and trading businesses. The TCS press release.
Wipro Technologies will provide ADAM services for BP’s fuels value chain and corporate businesses globally. BP has said that Wipro will maintain their existing fuel value chain IT systems and also deliver new IT solutions. The Wipro press release.
BP expects all three companies to contribute to better efficiency, standardize processes and lower overall costs.