Orica gets bigger bang with KAZ

Australian outsourcer KAZ Group has outbid incumbent Atos Origin for a five-year, $10 million deal to deliver managed IT services to $4 billion Melbourne chemicals firm Orica.

Leigh Rowe, manager of IT shared services at Orica, said the KAZ Technology Services contract, which would begin after Atos Origin's commitment ends 30 June, covered aspects across the chemicals company's entire business.

Orica has explosives operations in the Australian mining industry, India and Russia, fertiliser manufacturing, ChemNet chemical trading in Australia, subsidiary Incitec Pivot and its consumer products division spanning brands such as Dulux Paints, Yates gardening supplies and Selleys fixatives, he said.

'We run a shared services capability internally for IT that provides shared services to all of those businesses,' Rowe said. 'It's fundamentally around our enterprise system, which is SAP. Probably 85 percent of the deal is around SAP infrastructure.'

Rowe said KAZ had a track record as incumbent service provider for Orica's 70 percent-owned subsidiary Incitec Pivot.

Atos Origin had re-tendered for the shared services contract, but KAZ's offer had been deemed more competitive, he said.

'KAZ was very keen to win our business. They offered a good technology solution, in partnership with IBM. They have good technical links to IBM, good technical staff and offered a good value proposition,' he said.

Orica was looking forward to steady growth this year after passing through a time of consolidation in the explosives business, Rowe added.

Andrew Richardson, MD at KAZ Technology Services, said the contract was basically a complete outsourcing deal around Orica's data centre and associated support services.

The two main tasks were to refresh and update Orica's data centre infrastructure, using 'high-availability, high-redundancy, high-end' Unix-based p-series server systems from IBM, and to move the outsourced services from the incumbent service provider over the next six months, he said.

The managed services KAZ will provide has been marketed as part of IBM's push for 'on-demand' or utility-type computing.

However, Richardson said the offering was still a long way away from the hyped picture of infinitely adaptable and customisable services provision.

'Computing on-demand is very attractive to customers ... but I think there's still a bit of a gap [before we see it in its full form],' Richardson said. 'But we do vary the cost to Orica according to business needs ... as demand grows.'