ar130405 - Fotolia

Finland’s Valmet transforms IT with €38m outsourcing deal

Industrial tech firm Valmet outsources IT infrastructure services to focus its internal IT resources on business and digital developments

Finnish industrial technology company Valmet is shifting its in-house IT focus to business and digital development following a major IT outsourcing deal with CGI.

The €38m agreement covers Valmet’s operations in over 30 countries.

“Currently, our IT is roughly divided into infrastructure and business application services, which are both centrally produced for our business. [This agreement] covers our infrastructure and user services,” Janne Puustinen, vice-president of IT at Valmet, told Computer Weekly.

CGI will provide Valmet with user service automation and IT infrastructure services, including user computing and server and workstation management. CGI will also take over Valmet’s internal global IT service desk.

As part of the agreement, 58 of Valmet’s 200 IT professionals will move to CGI under their current employment terms. This move will affect Valmet employees in 14 countries. The company employs 12,000 people globally.

According to Puustinen, core drivers for the outsourcing decision were to simplify supplier management, improve efficiency and reduce costs to free up resources for service development. Most of the company’s infrastructure services have already been outsourced, but they will be increasingly managed by fewer suppliers.

“Our starting point was that we bought [these services] in too many small parts from too many suppliers,” said Puustinen. “We were spending too much time talking with our suppliers, when we should have been spending it talking with our business side and building new things.”

The deal will help Valmet shift its internal IT focus from running and optimising existing services to the creation of new services.

Wider transformation

The outsourcing process began in early 2016 when Valmet was analysing what its new business strategy meant for the IT operation. Part of the process was looking into its outsourcing strategy and what the company should focus on internally. After approval from Valmet’s board, five companies were invited to a competitive tender in early 2017 and the agreement with CGI was finalised over the summer. CGI has previously worked with Valmet on cyber security services, but on a much smaller scale.

Valmet aims to finalise its service transition to CGI by the end of March 2018. The contract also includes development projects related to Valmet’s IT efficiency and increasing its service automation level, which will become the primary focus after the transition period.

Read more on Information technology in the Nordics