Computer Sciences banks on £200m in Malaysia
Published: 29 Aug 2003 12:05 BST
Computer Sciences added another significant outsourcing deal to its string of recent wins, announcing on Thursday that it was awarded a 10-year pact with Malayan Banking valued at $342m (£216m).
Under the deal, Computer Sciences will absorb some 320 employees from Kuala Lumpur-based Maybank, Malaysia's largest banking group. Terms of the agreement specify that the information technology services giant will take over Maybank's desktop, help desk, mainframe and network infrastructure operations in Malaysia and Singapore. Computer Sciences reported that two of its affiliate companies, Computer Systems Advisors and CSA Automated, would provide outsourcing services to Maybank in those countries.
"This IT outsourcing initiative is a strategic initiative to secure quality IT infrastructure services from experts in the business," Maybank Chief Executive Datuk Amirsham A Aziz said in a statement. "(It) allows us to focus more of our energy and resources into our core business and competencies."
Computer Sciences has been able to retain momentum in the outsourcing market, announcing several large deals in the last year, including a $450m contract with facilities services company ISS. However, the company continues to face tough competition from segment leader IBM, which has also announced a slew of new deals.
Outsourcing remains one of the few bright spots in the larger IT market. The total value of IT outsourcing deals that are bigger than $200m has risen from $38.8bn in 2001 to $41.4bn last year, according to consulting firm TPI.
Alan Pelz-Sharpe, an analyst for London-based Ovum, said Computer Sciences probably won the Maybank deal because it had experience with business process re-engineering (BPR). While IBM is the leader of the IT outsourcing market at large, Pelz-Sharpe feels Computer Sciences' history with BPR will attract customers that want to enact business process change rather than just farm out existing operations.
"Computer Sciences can lay claim to quite a bit of change management experience," he said. "When you look at the Maybank deal, the company is truly outsourcing an entire business process -- not just mainframe maintenance or help desk (operations)."
Pelz-Sharpe predicted that IBM will continue to win the largest deals in the IT outsourcing sector, with Electronic Data Systems taking the lead in the government outsourcing space.
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