bmi rolls up £60m IT outsourcing contract

UK airline bmi has consolidated a series of IT outsourcing contracts in a novel arrangement where supplier payments are linked to...

UK airline bmi has consolidated a series of IT outsourcing contracts in a novel arrangement where supplier payments are linked to business activity levels.

The company has combined outsourcing deals for desktops, servers, voice and data networks, business applications and websites into a single 10-year deal with Fujitsu Services worth £60m.

The contract, an extension of an existing £30m deal with Fujitsu for mainframe and IT helpdesk support, forms part of bmi's Blue Sky initiative - a company-wide plan to cut costs by £100m over the next three years.

"We expect significant savings through the Fujitsu contract," said Richard Dawson, IT director at bmi. "We had adopted a selective outsourcing approach based on best-of-breed, but following difficulties after 11 September [terror attacks] Fujitsu suggested a wrap-around contract."

To ensure it gets a return on its investment, bmi has stipulated that the contract is based on a variable cost model. For example, payment for website hosting will be transaction-based and the desktop and server agreements are based on the number of systems used.

"Trying to correlate prices with business activity is a philosophy we have tried to adopt, particularly across IT, since before September 11," said Dawson.

Fujitsu will provide bmi with customer relationship management applications to underpin the airline's drive for more efficient ticketing, multi-channel access and reduced check-in times.

The CRM software will generate an integrated view of journeys, profiles and behavioural trends so that bmi can offer personalised services, such as facilities for business meetings at airports and special offers for business travellers.

l Fujitsu Services has also won a five-year, £5m contract to provide desktop support for the European arm of credit card firm Visa.

Visa EU hopes the deal will create annual savings of £1.2m by improving the management of corporate IT infrastructure and software in its London head office and European regional offices.

Fujitsu will support more than 800 Visa staff in Europe using remote management tools to solve technical problems. Helpdesk calls will be handled in the UK using Fujitsu's "sense and respond" methodology, designed to reduce call volumes by tracking recurring problems.

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