Thames Water, the UK's largest water company, has cut its IT
maintenance bill by 20% by outsourcing responsibility for the work
to an Indian software firm.
The savings, worth more than £1m, come from a decision to hand over
the management of Thames Water's pool of support and maintenance
suppliers to Hydrabad-based software firm Wipro last year.
The Wipro contract has also led to improvements in quality and
innovation, said Alasdair Macarthur, IS partner development manager
at Thames Water. "I always try to put price last. It would be very
east to throw everything at India because it is cheap. And it is
not because it is cheap - it is cost-effective," he said.
Thames Water believes it is getting better value from lead
suppliers such as Wipro by asking them to work in partnership with
rival suppliers in other areas of IT work.
Wipro, for example, is responsible for managing the work of
maintenance pool suppliers Schlumberger Sema, Xansa and Science
Systems. However, as a member of Thames Water's development pool of
suppliers, which is managed by PA Consulting, Wipro also works in
partnership alongside these same suppliers.
The contract for managing a third pool of IT service suppliers is
out for tender and is expected to be awarded within a matter of
months.
"It is straight business logic to have three partners who have to
work in two ways, both in the responsibility for their particular
domain, or horizontally, working together in partnership," said
Macarthur.
"Engaging Wipro as lead partner in acceptance testing, serves as an
extremely useful check and balance to the development partners. At
the end of the day that is driving up quality on our estate. It is
reducing downstream errors and the cost that goes with that."
Thames Water did not set out to appoint an Indian supplier, but
Wipro, one of 84 companies to respond to the utility's
advertisement in the Official Journal of the European Communities,
won the contract against stiff competition.
"The different culture and the physical proximity caused us to ask
slightly more questions of them than we would of other people,"
said Macarthur. "We did a number of reference site visits to
companies like Thomas Cook to really understand the nuances of an
offshore relationship. Without exception, the references were
positive."
Despite the success of the project, Thames Water is keen to win
greater savings in the future. "Saving of 20% are a good start. But
let's make it 25% or 30%. Let's use the full gamut of Wipro's
quality accreditation to drive up quality," said Macarthur.