Baycorp kicks out CSC in $25m sourcing move

Financial information management company Baycorp Advantage has chosen IBM over CSC to manage its mainframe and Unix infrastructure in a move to a selective IT sourcing strategy.

Previously, the mainframe was hosted by CSC and an Baycorp managed the IBM pSeries Unix systems in-house.

The deal is worth $5 million a year over five years, but may be less than $25 million in total, according to Baycorp CIO Andrew Carline, who told Computerworld the company is getting "good savings" with that price. "IBM was competitive on price and the range of services it could offer above infrastructure management," Carline said. "[IBM] had made a lot of acquisitions in the data management space and is a company I can broaden my relationship with."

The mainframe cutover will happen this week.

Carline said he was not unhappy with CSC, which put in a "good proposal", but it couldn't offer the breadth of data management technology expertise that IBM could.

Baycorp also signed two deals with Capgemini around application development and management.

One contract is to deliver the migration of Baycorp's New Zealand iSeries-based infrastructure to the pSeries systems and the other is to run the application once it is developed.

This will result in the retirement of Baycorp's RPG-based applications running on the iSeries which Carline described as a "legacy" for which it was increasingly difficult to locate technical skills.

The migration project is expected to cost $12 million.

"We have taken an approach to selective sourcing, because it gives flexibility to choose different partners for different reasons," Carline said. "For example, the application development was something I couldn't source the skills for in Australia so we are using Capgemini's global resources."

The management of the company's Intel servers is still in-house and it will look to consolidate those internally.

It's the areas of applications and project delivery where Carline will turn his attention to next.

"We have a portfolio I can't handle internally, so we will look at this over the next one or two years," he said.

Carline said the industry shift towards selective sourcing involves a balancing act between driving competition and not having a multitude of suppliers.

"I want to count them on one hand," he said. "You need to develop personal relationships with suppliers - from the CEO to the staff at coalface [and] IBM knows about our business."

Carline also recommends flexibility in contracts and acceptance that deals will evolve over time.

"There are a couple of key functions that I will always keep in-house, like the service desk and QA," he said. "And the enterprise architecture will remain in-house."

Baycorp's 400-plus desktops are also still in-house and the company inked a fresh deal with Telstra last year for fixed-line, mobile and data services with which Carline is "very satisfied".

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