Data#3 Towers CSC

In a dramatic turn of events, Data#3 has swooped on a lucrative outsourcing agreement from right under the nose of global services outfit CSC.

Data#3 poached the contract for the outsourcing and additional projects of insurance company Tower Life, expected to be worth more than $3 million over two years, from an unsuspecting CSC, ARN has learned. The initial contract, announced last week, will be worth over $2 million.

The announcement follows a nine-month outsourcing "trial" of the new-look Queensland-based integrator for Tower Life's help-desk services, following which Data#3 secured the remainder of Tower Life's outsourcing requirements because of the "poor service" of CSC.

"During the trial, Data#3 saved us 25 per cent on costs and increased helpdesk satisfaction by 92 per cent," said Tony Kesby, CIO of Tower Life. "We changed from our incumbent supplier because the service was poor."

"Things weren't working [with CSC] and we knew there were people out there who could offer better service at a better price," Kesby said.

"They had a lack of customer focus," he said. "Basically, they were running by the letter of the contract, so if a server broke down and it wasn't covered by the contract, it was like buffeting with them to get someone to look at it. Data#3 has a totally different focus on customer service," he added.

The revelation comes at a time when CSC is still stomaching its multimillion dollar acquisition of BHP IT and Kesby claims its incumbent outsourcer was too big a company to satisfactorily address Tower Life's outsourcing needs. "Data#3 provides us a better strategic fit," he added.

The outsourcing agreement will cover around 750 devices including 500-plus desktops, a number of Sun workstations and peripherals, claims Kesby. Data#3 will also be used for "special projects" including resource supplementation, management of remote sites, standard operating environment configurations, hardware audits and procurement of hardware and software, according to a statement released by Data#3.

The announcement follows Data#3's recent acquisition of ERP integrator Maggs Business Advisory (ARN, September 6, page 1) and a happy John Grant, Data#3's managing director, claims the win "validates" the company's decision to expand nationally to service the needs of organisations of up to 1000 users.

Heading up the project is Data#3's NSW services manager, Michael Giusti, who sends an ominous warning to the other outsourcing houses. "This reinforces that Data#3 is a serious player in the outsourcing market," he said.

Rick Bager, CSC vice president of Financial Services, told ARN that he can't "understand" where allegations of poor service have come from.

According to Bager, CSC continues to work with Tower Life on the applications side of its business in conjunction with "a number of other areas" that represent an estimated several million dollars per annum.

"It was a mutual decision. We regard Tower as an important customer for us and I think it reflects the kind of relationship we have when we can say ‘we think you can handle some aspects of that business better yourselves'."

The new agreement with Data#3 will realise overall cost savings to Tower Life of up to 25 per cent and Data#3's strategic procurement service is slated to save up to 18 per cent, according to Kesby. As well as the cost savings, Kesby is looking forward to the productivity gains Tower Life's alliance with Data#3 will provide.

"In the first nine months working with Data#3, complaints to my desk dropped by 92 per cent," said Kesby. "It lets us get away from the main day-to-day operations like putting out fires, to concentrate on best practices and moving forward."