IT outsourcing to save Deutsche Post World Net £100m a year

Deutsche Post World Net is outsourcing large chunks of its IT functions to HP Services, in a move designed to save around £100m a year over a seven year period.

Deutsche Post World Net is outsourcing large chunks of its IT functions to HP Services, in a move designed to save around £100m a year over a seven year period.

The logistics group and Hewlett-Packard say they have signed a letter of intent to transfer most of the company's global IT operations to HP.

Under the terms of the agreement, Deutsche Post World Net expects to save at least a billion euros over the next seven years by driving down overall IT costs, and better leveraging IT resources needed to run the business. The potential value of the contract to Hewlett-Packard has not been disclosed at this stage.

The companies expect to reach a definitive agreement by mid-2008. If an agreement is reached, Hewlett-Packard would take on about 2,500 employees who currently provide the services for Deutsche Post World Net's datacentre operations.

These include information and data management, infrastructure and network management, and application management. This would cover IT operations in Prague, Scottsdale, Arizona, Malaysia and a number others in other European countries.

All applications used by Deutsche Post World Net customers will continue to be designed, developed and governed internally, including IT security standards and their implementation.

Deutsche Post World Net will also retain the professional services and customer integration supply management components of its IT services unit, including project management, project consulting, application development and deployment services.

John Allan, chief financial officer at Deutsche Post World Net, said, "This initiative would significantly contribute to achieving our business objectives, while preserving the high level of service that our customers expect."

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