PracticeConsultingHP lands £1.9bn outsourcing deal

HP lands £1.9bn outsourcing deal

HP has landed its third major outsourcing deal in quick succession, agreeing a contract worth $3bn (£1.9bn) over the next ten years with consumer goods giant Procter & Gamble.

Link: HP saves £1.9bn in Compaq merger

Set to be finalised in mid-May, the deal will see HP manage Proctor & Gamble’s IT infrastructure – from data centre operations through to network management and end user desktop support, including some applications development.

HP services will be rolled out over the firm’s worldwide operations, with 1,850 P&G Global Business Services Unit employees from 50 countries transferring to HP’s Services division.

HP looks to have ousted rivals EDS and IBM to win the contract.

Late last week, HP also said that it had agreed outsourcing deals with mobile phone firm Ericsson and the Bank of Ireland.

HP will provide IT services for Ericsson’s global operations, but no further details or financial terms were disclosed.

The Bank of Ireland has outsourced its infrastructure services to HP on a seven-year contract worth about $600m.

The news comes as analyst Gartner warns that many outsourcing deals will fail to live up to expectations.

Linda Cohen, managing vice president for Gartner, said that 50% of outsourcing projects will be considered unsuccessful by senior executives because they would not delivered the anticipated value.

‘The service receiver and the service provider should commit to regularly scheduled, formal meetings to review the progress and achievement of objectives to ensure mutual benefit,’ Cohen said.

‘Failing to do this, the relationship can be seriously compromised because corrections are not made in a timely fashion.’

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