British National Grid selects three Indian IT firms for deal worth $250 million
The National Grid of the United Kingdom that handles the nation’s natural gas and electricity networks has shortlisted three leading Indian IT services providers – Infosys, Cognizant and Mahindra Satyam for an outsourcing deal estimated to be worth approximately $250 million.
Quoting sources, a business website reports that the National Grid of the country presently has an agreement worth $470 million for seven years with Computer Sciences Corporation (CSC) which is scheduled to end in 2010. The job entails software applications development and maintaining the IT infrastructure of the utility firm. The report further states that while a spokesman of the National Grid confirmed that the firm was assessing its IT operations; he refused to provide any details in this regard.
The spokesman, Stewart Larque stated that the utility organization was constantly exploring ways and efficiencies that would facilitate the firm to perk up performance and was presently evaluating the operations of its information systems. Consequently, the National Grid was considering every alternative to provide the most effectual and competent services to the customers of the company. However, the firm has not taken any decision in this regard so far, he added.
Meanwhile, global outsourcing consultancy agency TPI said that a number of annual contracts estimated approximately between $10 billion and $12 billion are scheduled to expire in 2010 and these would be renegotiated with worldwide IT services providers during the subsequent few months. In fact, several firms based in the United Kingdom alone entered into agreements worth more than $1 billion during the first two months of 2010, TPI elaborated.
Emerging from the global economic slump, leading utility firms in the United Kingdom, including British Petroleum and the National Grid, now intend to lessen their operational expenditures by means of outsourcing their non-core operations. In 2009, British Petroleum signed outsourcing contracts worth more than $1 billion with IBM, Wipro, TCS and Infosys.
Although the Indian IT vendors shortlisted by the National Grid refused to comment on the issue, sources aware of the bidding said a decision is expected during the next few months. The source said that the deal being offered by the National Grid is among the bigger transformation contracts that are being pursued by service providers worldwide. He added that presently utility firms globally have started to assess their current agreement and desire to renegotiate at lower prices.
The Nation Grid has been outsourcing its non-core operations for quite some time now and in 2009, it awarded the contract for handling the firm’s back-office operations to India’s largest IT services vendor Tata Consultancy Services (TCS). The deal entailed shifting of around 300 employees of the National Grid to TCS.