Fonterra to offshore IT jobs to India?

New Zealand's largest company, dairy group Fonterra, is considering outsourcing its worldwide information services functions to HCL in India.The group is co-operatively owned by around 13,000 New Zealand suppliers, and its three divisions operate in more than 30 countries around the world.

New Zealand's largest company, dairy group Fonterra, is considering outsourcing its worldwide information services functions to HCL in India.

The group is co-operatively owned by around 13,000 New Zealand suppliers, and its three divisions operate in more than 30 countries around the world.

Fonterra chief information officer Greg James told ZDNet Australia that the HCL outsourcing proposal had reached the due diligence phase but the company was still "a couple of months away" from making a decision.

Under the proposal HCL would take responsibility for information services and applications development across Fonterra's portfolio of applications.

Fonterra is a significant user of SAP, having spent NZ$260 million on a global ERP installation known internally as "Project Jedi", which was implemented over three years between 2004-06. However, the company continues to use Oracle/JD Edwards applications, including database and data warehouse products, in its manufacturing operations.

"Our strategy is to move at some point to a convergence on SAP, but tactically we are still buying SAP, Oracle and JD Edwards applications," said James.

While the HCL proposal could potentially affect up to 130 IS positions in New Zealand and overseas, James said the actual numbers of jobs involved were "not a level of detail we have reached yet".

James confirmed that any deal with HCL would not affect Fonterra's existing outsourcing agreement with EDS, which covers infrastructure and network management. This agreement was worth NZ$590 million over seven years when it was signed in 2003, and was extended for a further four years in 2006.

HCL, which was founded in 1976, describes itself as "one of India's original IT garage start ups". The company now reports annual revenues of US$3.9 billion and employs 43,000 people in 17 countries.

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