A new chapter on infrastructure outsourcing by India Inc was written recently
with Bank of India outsourcing the implementation and management of its core
banking solution to HP.
An agreement for a 10-year outsourcing contract valued over $150 million was
inked between M Venugopalan, Chairman & Managing Director, Bank of India (BoI)
and Balu Doraisamy, President, HP India. The agreement envisages that HP would
implement and manage the Infosys Finacle core application solution across 750
In addition to the core banking solution, HP would manage all IT assets and
network infrastructure across all these 750 branches. It would also implement
and manage a data warehousing and document imaging solution, provide integrated
channel management including tele banking, Internet banking and ATM as well as
build and manage a data center, DR site, help desk and call center.
Though at $150 million, this might be one of the largest BFSI
infrastructure-outsourcing contracts in the entire Asia-Pacific, Venugopalan is
confident about an immediate RoI, primarily because he feels that the new
arrangement would facilitate new client acquisition.
Off late, there has been a spate of similar large infrastructure outsourcing
contracts with Indian enterprises. Telecom major Bharti Televentures has
recently outsourced the management of its Airtel cellular network to Ericsson
for $400 million.
Even other leading Indian enterprises like Hindustan Lever, Ashok Leyland and
Tata Steel have outsourced their infrastructure implementation to third party
vendors. If the BoI-HP arrangement meets with success, there is a strong
possibility of more and more banks entering into similar contracts.
Both HP Services and IBM Global Services are currently looking at
infrastructure outsourcing as a lucrative avenue of business. While HP’s
strategy is based on the Adaptive Enterprise Management framework built around
its Openview solution, IBM’s offerings are based on its Universal Management
Infrastructure (UMI) under Project Symphony.