Australian beverage giant Foster's Group has confirmed it will outsource much of its internal IT function to Indian outsourcer Wipro, in a move that will result in a number of job losses or movements still to be decided.
Confirming the deal this afternoon, a Foster's spokesperson said it would cover services around the company's technology infrastructure (for example, help desk support) as well as datacentre and application support.
The spokesperson said there would be job losses within Foster's IT department, but it would be "pre-emptive" to name a figure because the final details of the outsourcing process had not yet been decided and were still being worked through.
Some staff might be offered a position at Wipro, they said, while some could re-deploy within Foster's itself. "For those that we can't find a job for, there'll be outplacement and redundancy services," they added.
The Wipro deal is a global arrangement for Foster's, covering its facilities in Australia as well as the US and UK. The company's customer-facing call centre staff are not affected. In a broader sense, the deal is just one part of a broader internal transformation program being driven by the beverage company.
Another recent activity under its umbrella touching its IT function, for example, has been the implementation of an IP telephony environment utilising hardware from global networking giant Cisco Systems.
The news comes as other Australian organisations are currently pursuing outsourcing strategies. For example, this morning the nation's largest airline Qantas confirmed around 200 staff would be affected by a decision to outsource its IT project delivery team to IBM.
I am firmer believer that outsourcing is not the cheapest solution for companies that want to reduce IT related expences.
Although Wipra, TCS and Unisys can be cheaper compared to internal IT or IBM consultants working on your site - there are other options.
There are lots of small IT Software Consultant Companies in Australia and they can do any work business required. And because they do not have complex management infrastructure (usually 2-5 people) they charge much less for the same work.
Indeed that is what big software giants do - they seal the contract with client and hire few consultants/developers and earn their money on difference (IT version of CFD).