TCS, Wipro, Infy win 1.5 Billion Contract

TCS, Infosys, Wipro win $1.5 billion outsourcing contract
With this, BP has reduced the number of its technology vendors from 40 to five and expects to save as much as $500 million over the next five years

Bangalore: India’s top three technology firms—Tata Consultancy Services Ltd (TCS), Infosys Technologies Ltd and Wipro Ltd—have each won part of a five-year software outsourcing contract valued at around $1.5 billion (Rs7,320 crore) from British oil and gas firm BP Plc.

IBM Corp. and Accenture Ltd are the other vendors.

With this, BP has reduced the number of its technology vendors from 40 to five and expects to save as much as $500 million over the next five years, a company spokesman said.

“Over the last 12 months, we undertook an effort to consolidate our technology vendor base and eliminated 35 of them. These five were selected for scale and ability to support us from around the world,” BP’s spokesman David Nicholas said over the phone from London. “Otherwise, with 40 vendors, we would have spent $2 billion.”

He declined to specify individual contract values.

IBM said in a statement it has won the largest pie of the contract to manage and run all of BP’s enterprise applications and service desk responsibilities, but did not specify the value. The three Indian vendors, which were part of the earlier line-up of 40 information technology firms, will carry out application development and maintenance work for the British firm.

“The engagement with BP underscores our ability to help global corporations become more competitive in the current economic scenario...,” N. Chandrasekaran, chief operating officer and executive director of TCS, said in a statement.

The Indian vendors may not earn significant revenue from the deal, but it will help them gain expertise in the manufacturing domain in the European market, where they are keen to expand services, said Sabyasachi Prasad, partner with Tholons Inc., an advisory firm for offshore exploration firms.

Europe accounted for around 30% of India’s software exports of $46.3 billion in fiscal 2009. BP’s chief information officer Dana Deasy said in a statement issued by Infosys that the deal would help BP simplify and streamline processes and bring down its overall cost base.

In July, BP said it had already exceeded the $2 billion reduction in cash costs targeted for 2009 and expected a further $1 billion in savings over the rest of the year.

“Our extensive capabilities and experience in oil and gas domain will enable us to deliver significant value to the energy major’s business,” Suresh Vaswani, joint chief executive at Wipro, said in a statement.