Powergen has signed a landmark application service provision (ASP) contract with QSP.
The £3.85m contract is for QSP's Webfinance Suite and will support 600 Powergen users accessing the application over the Web.
QSP, the financial software specialist, will run the system remotely from its data centres.
The deal, is one of the biggest so far for the ASP model of buying computer services. IT managers have remained sceptical about the model because to date it has struggled to produce high-profile corporate users.
"This is a landmark deal for the UK ASP market," said Katy Ring, research director of e-services at Ovum. "Everyone is waiting for the big customer to come through and trigger other big deals."
Powergen, a QSP customer, chose the ASP option in a bid to drive down in-house IT costs and speed up data processing.
"ASP was a wise choice, because running the system in-house would have meant extra expense in staff and hardware," said Greg Preston, project manager for UK finance at Powergen. "The real driver behind the change was cost reduction. We wanted to move from the mainframe to a Unix-based system, because it would be much cheaper to run."
The Webfinance Suite, 4.5e, will slash reportingtimes through faster data retrieval, Powergen said. This will mean that data can be processed during the day rather than the previous system of overnight processing.
QSP's Web-based ASP business has grown rapidly over the last few years. Current clients include Northern Rock, British Gas (Oil and Explorations Division) and Essex County Council.