Telstra today confirmed it intended to slash the ranks of its IT outsourcing partners to just two in an effort to cut costs.
According to the telco, a number of its non-discretionary IT contracts across its major suppliers — EDS, IBM Global Services, Infosys and Satyam — have come up for renewal, which Telstra wants to use to its advantage.
"We are taking this opportunity to consolidate all non-discretionary IT work and we are targeting dividing the applications between two companies," a spokesperson for the company said. The goal of the consolidation was to reduce costs and streamline providers.
Telstra has previously had an extremely strong relationship with IBM. In April 2006 the telco said Big Blue would manage all of its internal IT systems in a deal reportedly worth $1 billion over six years, lasting until 2012. A separate supply chain overhaul has helped Telstra shed 400 staff, cut its inventory centres by half, and cut out 2,000 suppliers.
Telstra also has an extensive relationship with Accenture, under which the IT services giant is revamping Telstra's billing systems.
How do you reduce costs when you abandon competitive tendering for IT work. Sounds like they are setting up a cosy duoply to me. And us poor mugs will pay for it with higher telephone, mobile and internet fees.