CSC leads team running British mail IT operations
- By Lloyd Batzler
- May 06, 2003
An alliance headed by Computer Science Corp. has been hired by Britain's Royal Mail Group to run its information technology services, data centers and networks.
The CSC-managed contract, which includes as partners the European telecommunications company BT and Xansa, a London-based business process and IT company, has an estimated value of $2.4 billion.
Royal Mail, owned by the United Kingdom, estimated the deal will save more than $400 million over the 10-year term of the contract, and is one of Britain's largest outsourcing projects.
For the past three years, Royal Mail has been re-engineering its structure to reduce costs and focus on core operations, which include delivering letters and packages to 27 million addresses. About eight other companies ? including a dairy ? have permission to deliver mail in the United Kingdom.
As prime contractor, CSC is expected to hire 1,470 of Royal Mail's 1,735 IT managers and support workers. The rest will become employees of Xansa or BT, the companies and Royal Mail Group said.
CSC also will maintain 42,000 desktop computers and develop and manage servers, mainframes and IT processes.
BT will provide a new network and related services, such as call-center operations support. Royal Mail estimated the value to BT is $725 million over 10 years.
Xansa's role includes operations management and enterprise solutions to Royal Mail corporate units. Based on exchange rates, its subcontract is worth an estimated at $290 million, Royal Mail said.
The contract "is a vital component in our renewal plans in terms of reducing costs and giving us the information technology services that we need to make Royal Mail a great company," Adam Crozier, Royal Mail's chief executive, said in a statement.
Following the announcement of the deal's formal signing, shares of CSC of El Segundo, Calif., were up about 2.3 percent in mid-morning trading May 6 in New York.
CSC's revenue last year was $11.3 billion.