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Barclays' small-scale outsourcing

Nick Huber
Barclays' $350m (£214m) IT outsourcing deal with EDS signals it is taking a more cautious approach to outsourcing based on medium-sized deals with different suppliers, rather than signing one "mega" deal, according to industry experts.

As predicted by Computer Weekly, the two parties signed a contract last week after months of negotiation. It will see EDS manage nearly 42,000 desktops. About 80 Barclays staff will transfer to EDS.

"Barclays is pursuing a best-of-breed approach, but this is out of kilter with the rest of the market, which is striking mega deals," said Robert Morgan, chief executive of outsourcing advisory firm Morgan Chambers.

Morgan said the risk of hiving off IT into outsourcing deals with multiple suppliers is that suppliers could pass the buck in the event of problems.

"If Barclays continues this approach, it will have to make a heavy investment in managing supplier relationships when there is an overlap in service delivery," he said. "Potentially, as technologies merge, suppliers have a tendency to blame each other."

However, critics of multi-billion-pound mega outsourcing deals argue that they often lack flexibility and lead to dependency on one supplier.

The EDS contract is part of Barclays' business transformation project, which will involve the outsourcing of much of its IT and business processes.

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