AGL Energy inks $16 million outsourcing deal with Tata Consulting

Energy sector accounts for 12 percent of outsourcing deals in first half of 2007

Australia's largest retailer of gas and electricity, AGL Energy Ltd, has signed a five year, $16 million outsourcing contract with Tata Consultancy Services (TCS).

Under the agreement, TCS will manage and support all SAP applications for AGL. This includes AGL's existing SAP ERP system and the SAP Industry Solution for Utilities, which is currently being implemented.

The decision by AGL to outsource all SAP applications maintenance and support is expected to reduce the implementation time of the new utilities module, and accelerate return on investment.

AGL managing director, Paul Anthony, said the decision to outsource applications management and upgrade systems is in line with AGL's strategy to streamline business operations and offer a competitive service.

"TCS was selected because of their SAP skills, energy and utilities domain knowledge, proven track record in technology innovations and mature methodologies," he said.

TCS Asia Pacific regional director, Girija Pande, said the engagement underscores the organization's capabilities in the Asia Pacific energy and utilities markets.

"It is supported by our Global Network Delivery Model, global alliance network and our large regional presence," Pande said.

"Demand for outsourcing in the Asia-Pacific grew strongly in the first half of 2007 along with the use of offshore service delivery within the scope of outsourcing."

Research firm TPI reported the increase, 59 percent of which entailed partial delivery offshore, the highest percentage ever.

TPI Asia Pacific managing partner, Amo Franz, said the energy sector share in these outsourcing activities was 12 percent in the first half of this year.

He said deregulation of the energy industry in the region is providing opportunities for outsourcing and this deal with AGL demonstrates that trend.

TCS energy and utilities practice VP, Ajoy Mukherjee, said the provider has been operating in the region for the last 25 years.

One high profile customer is Qantas Airways. The company generated revenues of $US4.3 billion for the fiscal year ending March 31, 2007.

AGL has Australia's largest retail energy and dual fuel customer base, supplying around 4.1 million customer accounts and approximately 3,600MW of generation under management.

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