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EDS bags sweet £40m deal

High street confectioner Thorntons has outsourced its entire IT operation in a £40m deal without putting the contract out to...

High street confectioner Thorntons has outsourced its entire IT operation in a £40m deal without putting the contract out to tender.

The company has signed a 10-year deal with outsourcing giant EDS. Finance director Martin Allen told CW360.com that Thorntons was persuaded because EDS had "a large and growing retail centre nearby".

Dave Coneron, EDS delivery executive, said the deal emerged after the outsourcer had done "bits and pieces" of work for Thorntons in the past. "We then explained to them the benefits of outsourcing," he said.

The contract, which was signed on 1 October, will see all 34 of Thornton's staff transfer to EDS in a handover process that has already begun.

Danny Jones, programme director at IT management consultancy Morgan Chambers, and a former EDS employee, told CW360.com that the decision to let the contract without putting it out to tender was problematic because it had the backing of the Thorntons board.

"There's a fairly strong demonstration of trust with [Thorntons] going down this path without going out to competition," he said.

"There is an argument that says if you run extensive competition and you have dozens of people tendering, it's the one that tries the hardest that wins. Have they then got themselves into a position they can't deliver?"

The question for Thorntons, Jones said, is: "Have they got the checks and balances in place to gauge how much value they get from the deal?".

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