TCS, INFOSYS TECHNOLOGIES, WIPRO BAG BRITISH PETROLEUM (BP) CONTRACT

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INDIA’S top three software exporters— TCS, Infosys Technologies and Wipro —along with MNC rival IBM on have announced that they have won new outsourcing contracts from British Petroleum (BP) to be delivered over next five years. The deal is valued at around $1.5 billion.

   As reported last month, India’s offshore outsourcing firms including TCS, Infosys, Wipro and Mahindra Satyam had locked horns with MNC rivals IBM and Accenture for up to $1-billion outsourcing contracts to be awarded in August by BP.

   While the companies did not disclose the value of new contracts, experts tracking the sector said Indian suppliers are expected to earn revenues in excess of $100 million each over next few years from BP. “BP expects to save up to $500 million from these outsourcing contracts,” a UK-based outsourcing expert said on conditions of anonymity.

   BP, which used to outsource a majority of its application development, system integration and infrastructure management projects to almost 30 suppliers including IBM, Accenture, Mahindra Satyam and Infosys, wanted to bring down its IT costs by up to 30% by working with fewer vendors handling more work, at lower rates.

   “Every business unit at BP was running its IT operations separately, with different set of suppliers. This led to complexity and higher costs of operations. With this consolidation, BP now wants to work with not more than six vendors globally,” a UK-based expert familiar with BP’s sourcing strategy said recently. He requested anonymity because he is not authorised to comment about these contracts.

   When contacted, a BP spokesman confirmed that the supplier review is nearing its end. “Yes, we have been reviewing our strategic IT providers, and are getting close to the end of that process, but I can’t confirm numbers of the current or possible future providers,” Robert Wine, a BP spokesman had said last month.

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