Farming out apps: More eggs, more baskets

摘要

Dutch banking giant ABN Amro's huge new IT outsourcing deal illustrates the growing trend of companies farming out work to multiple providers instead of negotiating one large contract. Announced last month, the deal has five vendors splitting $2.2 billion in IT work over five years. IBM won a $1.9-billion IT infrastructure outsourcing component, including servers, storage systems and desktops; Infosys and Tata Consultancy Services drew $125-million and $250-million contracts, respectively for application support and enhancements; and Accenture, IBM, Infosys, Patni Computer Systems and TCS earned preferred-supplier status for an unspecified amount of development work. The bank says its IT overhaul will save the company more than $600 million by 2007, including savings accumulated by cutting 1,500 jobs and transferring 2,000 jobs to the outsourcing vendors (leaving ABN Amro with about 1,800 in-house IT staff). In addition, the outsourcing arrangements will provide better and faster access to new technologies, which will lead to more sophisticated product development for ABN Amro's clients.