After Bharti Airtel and Idea Cellular, Vodafone Essar has also decided to outsource all its IT operations to IBM to focus on its core business and enhance services to customers.
Under the five-year deal, IBM India will assume responsibility for the management of all Vodafone Essar?s IT operations with the exception of network service platforms, spanning both hardware and software, the company said in a statement on Monday
?We are confident this will deliver cost efficiency as well as an enhanced service to our customers,? said Asim Ghosh, managing director, Vodafone Essar. The agreement will include development and maintenance of key applications such as billing, business intelligence and financial systems. IBM will also manage other internal IT services for Vodafone Essar such as data centre operations and IT help desk, while supporting areas such as security and change programmes.
Vodafone Essar will continue to retain full strategic control of its IT requirements and to ensure a greater flexibility for the telecom operator, the deal has been constructed on a risk-sharing basis, under service level agreements.
The deal builds on Vodafone?s existing agreement to outsource to IBM its application development and maintenance services in its operating companies in Spain, the Czech Republic, Australia, New Zealand, Portugal, Ireland, Greece, and Italy.
As per estimates, outsourcing brings down operational costs by 35-40%. According to industry experts, telecom companies are now realising that maintaining IT is not their core competence. Therefore, they want to concentrate on main their main offering.
In India, Bharti Airtel pioneered this concept by outsourcing its IT infrastructure to IBM in 2004 for $750 million. The deal was later upgraded to over $1 billion. In March this year, IBM had signed a 10-year business transformation pact to integrate, innovate and transform Idea Cellular?s business processes and IT infrastructure. The $600-800 million deal was also designed on risk-reward revenue sharing model. IBM, in collaboration with UTStarcom, has also commenced work for BSNL to provide end-to-end networking solutions and services.
