Bradford and Bingley outsources IT in £140m deal

Bradford and Bingley will outsource its communications infrastructure to BT in a ten-year, £140m deal.

Bradford and Bingley will outsource its communications infrastructure to British Telecom  in a ten-year, £140m deal.

The agreement will see BT deliver a portfolio of managed voice and data services to the building society's 7,500 employees as a managed service.

Network requirements include wide and local area networking to connect more than 550 sites across the UK, as well as collaborative tools, security services and hosting Bradford & Bingley's internet and web-based customer services.

Steve Partington, partner relationship manager at Bradford & Bingley, said: "Through this extension to our relationship, we have been able to reduce our supplier base dramatically, which will significantly reduce our communications overheads."

Analysts said that an outsourcing deal with a single supplier would make it easier to manage for the user as long as the risk of relying on a single contractor was offset by a carefully structured contract, including exit clauses for the customer.

"If you have a multichannel approach [to outsourcing] and three to four suppliers with different contracts, it does get more complicated to manage them over," said Aneet Shah, lead financial services analyst at researcher Bloor.

For Bradford and Bingley, the benefits of consolidation utweighed teh potential risk from a single supplier.

"The B&B Group has made a number of acquisitions in recent years which meant that there were various contracts in place with BT across the Group," a representative said.

"We have simply pulled all these contracts together and in the process achieved some cost savings. We believe in outsourcing skills which are not core to our business. BT has provided good service to the Group over the years and it is logical for us to continue with a good service partner."

The Bradford and Bingley deal, which extends an earlier agreement with BT, includes managed, hosted internal and external e-mail; managed e-infrastructure and security services including firewall management, intrusion detection, virus scanning, web-sweeping and mail-sweeping services and disaster recovery services.


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