Services giant CSC Australia is
"disappointed" at losing IT outsourcing client the Northern
Territory (NT) government to rival Fujitsu but says the switch
does not represent a general willingness on the part of customers
to ditch incumbent suppliers.
last week confirmed it had awarded an AU$150 million
four-year desktop and helpdesk services contract to Fujitsu, which
will take over after CSC's five year contract to provide the
services expires 29 June.
"Yes, we're disappointed, of course we are," CSC's local
managing director and chief executive Mike Shove said in an
interview with ZDNet Australia
Shove said CSC was expecting staff previously involved in
providing services "will move to the new providers" and that as
the state government was CSC's largest single customer in the
territory, his company's operations there would certainly
decrease in size.
The chief executive echoed the government's comments that CSC
would cooperate as Fujitsu took over the work. "I think we can
get as good a reference exiting well with an organisation," he
said. "So we're not going to leave them high and dry at all."
But Shove disagreed with the NT government's ICT tenders
office project director Brad Irvine's
comments last week that the territory's historical trend of
not renewing incumbent ICT suppliers was representative of a more
mature customer base that was more willing to dump incumbents.
"It is interesting that they haven't renewed a single contract with anyone, which tends to be contrary to what most organisations do," said Shove.
"Generally the customer has
to be disappointed to move. Some like to move just
to move, looking for a change. But generally if you look over the
last year or two, you don't see that many that have genuinely
According to Shove, large organisations were more likely to be
starting to break up their "big bang" large outsourcing contracts
into smaller component parts.
"We're certainly seeing more and more selective sourcing,
smart sourcing, outtasking -- whatever buzzword you want to use
-- in the market," he said.
"That's creating more opportunities. So there's less of these
very large big bang outsourcing deals to chase, but there's more
small deals to do."
Shove mentioned the likelihood of the Commonwealth Bank
breaking up its "huge deal" with supplier EDS as one example.
"The expectation is that it will get chopped up into three or
four different pieces, and they'll look for best of breed rather
than give it all to one provider," he said.
Shove noted that CSC was speaking to the bank to see if there
was a role for the services giant to play in the wake of the EDS
deal. "As everyone is, I'm sure," he said.
The chief executive said the changed industry dynamic was a double-edged
sword. "There's more competition, because the deals are smaller,
that allows more people to participate, though there's more of
them," he said.
Another trend Shove sees building momentum in
the Australian marketplace is offshoring -- where some work is
completed in low-cost centres like India. However he noted there
wasn't as much offshoring going on as people thought there
In the end Shove is philosophical about the NT government
deal. "The terms are getting shorter. This will come around
quicker -- they only signed a four year deal," he said. "It was a
five year deal before. In two and a half years, they're going to be
Some of CSC's other local customers are resource giants BHP
Billiton, Xstrata, Rio Tinto, the federal Department of
Immigration and Multicultural and Indigenous Affairs,
manufacturers BlueScope Steel, OneSteel and Alcoa, and financial
giants AMP, GE and Allianz. "QBE was a good win for us this year
as well," said Shove.