Boots picks Xansa for second major outsourcing deal

High-street pharmacy giant Boots has signed a deal with Xansa to outsource its central application development and support...

High-street pharmacy giant Boots has signed a deal with Xansa to outsource its central application development and support operations.

The deal is worth at least £54m over seven years and is expected to save Boots up to £30m over the full term of the contract.

It follows Boots £710m, ten-year agreement last week to transfer all of Boots' IT infrastructure - including its data centre, in-store systems, data networks and telecoms - to IBM Global Services.

Boots chief executive Steve Russell pledged that the cash saved through outsourcing would be reinvested in IT.

"Information systems are at the heart of modern retailing. Building on Xansa's work to date, this deal gives us further savings of up to £30m over the next seven years. Last week we announced the outsourcing of our IT infrastructure. Once again, we will channel the savings from the Xansa business applications outsourcing contract into more IT improvements to benefit our customers and the business."

The Xansa contract will see some 200 people from Boots' Information Systems and Technology group transfer to the outsourcer. This is in addition to the 400-plus Boots employees transferring to IBM as part of the infrastructure outsourcing agreement.

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