Logica backs Wales for outsourcing success

Blended outsourcing is the key to Logica CMG's plans, as it opens a new operation in Wales that will manage some of its largest accounts

LogicaCMG opened new offices in Bridgend, Wales, on Monday where high-tech staff will manage giant outsourcing contracts across the world. Seven hundred and fifty new staff will work there, to handle contracts such as a giant IT project issued by the Ministry of Defence two weeks ago.

"Wales is striding forward in business as it is on the rugby field," said Peter Hain, secretary of state for Wales, speaking two days after Wales clinched a historic grand slam in the rugby union Six Nations championship.

"Logica is a world-class company, and has chosen to locate its European office here rather than elsewhere in Europe," Hain added.

The staff will not be call centre workers, but will manage and oversee complex outsourcing contracts such as the giant revamping of the MoD's IT systems, which Logica won as part of a consortium led by EDS and Fujitsu. This work alone will be worth a total of £4bn over the next ten years, and will be handled in Wales by offices of the major partners. "These are exactly the kind of high-skilled jobs we want in Wales," said Hain.

"Logica uses a blended onshore/offshore model, making strategic decisions about what needs to be done and where," said Jim McKenna, LogicaCMG's chief operating officer. "Simply offshoring to Bangalore would create large benefits but have a big risk factor. We use an outsourcing hub to reduce that risk."

"When I went to Bangalore to see Logica's offices five years ago, they had fewer than 100 employees," said Hain. "Now they have 2,000, and the Welsh office has gone from 250 to 750 staff. You can actually grow both in India and here at home — the two can complement each other.

The 750 jobs will be created by the end of 2007, most of them going to Welsh people, either those already living locally or returning home. "Many people have had to leave Wales for their career, but that's no longer the case," said Hain. "Wales has the fastest business growth rate, the best employment growth record, and the highest level of exports from anywhere in the UK. And ten years ago, the Welsh economy was on its back!"

McKenna added that Logica won't just handle work for UK clients at the Bridgend site.

"We signed our largest ever outsourcing contract in January, worth €600m (£416m), with [Portuguese energy company] EDP. Much of that work will come through our facility in Bridgend."