Westpac has finally announced the winner of its highly sought after IT and telecommunications outsourcing agreement, siding with IBM GSA and Telstra over the CSC and Optus bid.
IBM GSA and Telstra stand to pick up $4.3 billion between them, with IBM GSA securing the IT outsourcing deal for the next 10 years and Telstra providing telecommunication services over five years as IBM GSA's primary sub contractor, pipping CSC/Optus at the post.
The competition for Westpac came down to a two-horse race in August when Commonwealth Bank of Australia outsourcer EDS withdrew its tender.
IBM GSA will finalise negotiations with Westpac by the end of November for the outsourcing of mainframe and mid-range computing and desktop services. As expected, Westpac's IT systems development, strategy and architecture will remain in-house, according to a statement released by Westpac.
The bank is hoping to derive a 15 to 20 per cent cost reduction through its outsourcing agreement and intends to reinvest some of this into delivering "e-initiatives", as the company looks to position itself around the Web.
After IBM GSA's recent stop-work fiasco (as reported in ARN on 11 October) where members of the CPSU Communications Union threatened industrial action when the outsourcer refused to negotiate collectively with staff other than ex-Telstra employees, all eyes have turned to Westpac's 1200 affected IT staff in Australia.
According to a report issued to the ASX today, all affected Westpac IT employees will be offered positions within IBM GSA/Telstra "on terms that are equal to or better overall than current terms and conditions".