VicRoads IT breaks up outsourcing

VicRoads IT breaks up outsourcing

Local players and EDS have emerged the winners in the final break up of IBM's decade-long hold over IT at VicRoads, the Victorian roads and traffic authority, with the organization claiming the deal will net big savings.

The result's of the $100 million-plus tender have awarded the embattled outsourcer the complex task of vehicle and licensing registration services to the tune of $58 million over five years, while Telstra picked up voice and data network services worth $36 million over three years.

In a move that will disappoint enterprise applications heavyweights SAP and PeopleSoft, local firm Mincom has retained its hold on the traffic authority's finance and HR to the tune of $7 million over five years.

While the shake-up will no doubt give heart to EDS, VicRoads is also retaining its policy of insourcing desktops and helpdesk services for the forseeable future.

Announcing the break up of IBM's $20 million whole of enterprise deal in April 2003, VicRoads CIO John McNally told Computerworld the new contracts needed to provide for better value, flexibility and innovation.

Mincom executive vice president for solutions development David Barbagallo said the deal indicated that Australian software companies are globally competitive and capable of rubbing shoulders with the biggest software companies in the world in terms of quality, innovation price and delivery.

"What it shows is [that the] local [IT] industry can compete in these big tenders, and that government has confidence in Mincom's ability to deliver. There's a high expectation for us to live up to. The fact we won against larger companies [shows this]," Barbagallo said.

VicRoads acting chief executive Peter Balfe said the awarding of the contracts was the culmination of moe than two years of planning and would create some 40 new jobs.

"Significant cost savings will be achieved for the Victorian community under the new arrangements, which will also deliver more efficient services to the organisation and greater reliability to our customers," Balfe said.

While VicRoads was unable to confirm whether the new deals explicitly prohibited offshoring, sources close to the new contracts said there was little chance of work leaving Australia due to the maturity of the software, systems and business process.

"There's nothing really to send, it's more about managing it on the ground," the source said.

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