Corus chooses multisourcing over single IT provider

Steel producer Corus is moving from a single IT services provider to a multisourcing model, in a bid to cut costs and improve flexibility.


The Capgemini mainframe contract is the first to have been signed under the new sourcing strategy.

Corus is finalising its decision on who will provide work under an application development and maintenance contract.

“Other service lines will follow. This is a gradual move to be implemented over the next six months,” the spokesperson explained, adding it is possible that Capgemini could win other deals within Corus.

While Capgemini’s new contract is only a fifteenth of the size of its 1997 agreement, David Bee, Corus account director at Capgemini, said the move was normal as many steel firms were moving away from one-provider contracts.

“We have no problem with them wanting to do things differently,” he said. “Corus is very reliant on mainframe services and we are pleased to be a part of this.”

Under the current contract, Capgemini will support 100 midrange and Unix servers, 300 Intel servers, and will migrate Corus data over the next month from on-site existing IBM and Fujitsu mainframe services to Capgemini’s datacentres in Bristol and Rotherham.

Change management and incident management in the datacentres will be run from Capgemini’s Poland offices, and technical support will come from Capgemini in India.

The IT services provider will introduce utility computing, virtualisation and adaptive storage as part of Corus's bid to reduce mainframe running costs and improve service levels. Bee said Capgemini was providing service charged according to Corus’ usage, a “utility pricing model”, in order to help Corus cut costs.

The company now has 10,000 PCs, which Capgemini has standardised on Microsoft Windows XP.

Corus is moving some enterprise applications to SAP from existing in-house and bespoke programs. It is initially addressing human resources, finance and procurement. Capgemini will continue working with Corus on this at least in the interim until other IT services providers are appointed.

Bee said it was “very early days” and difficult to tell how last year’s takeover by Tata Steel would affect Corus’ IT strategy. But he hinted that things were unlikely to change dramatically. “Tata will continue to run Corus separately as we understand it,” he said. “Tata has some similarities anyway, though it uses SAP more widely.”

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