Unisys wins $14m ANAO deal

The agency has signed a new $14 million IT outsourcing deal with existing supplier Unisys after a competitive tender released in late 2008.

Unisys will continue to provide desktop and infrastructure support, LAN and security administration, desktop asset management and change control support for the next five years with an optional four-year extension.

ANAO chief information officer Gary Pettigrove said it was the fourth competitive tender Unisys has won for the Audit Office over a 12-year relationship.

Pettigrove listed several reasons the Office again chose Unisys.

"One, they offered a discount on their current price, which has helped us realise our Gershon [report] savings," he said. "The Gershon report demanded 7.5 per cent savings from smaller agencies and 15 per cent from big agencies. We have had to identify and realise savings without any change to our service levels."

Pettigrove estimated the ANAO will save 12 per cent on what Unisys would have charged them for prior deals.

Second, said Pettigrove, Unisys improved their service levels from what was a call-logging service to a service desk arrangement for no greater cost.

"Unisys' ITIL [Information Technology Infrastructure Library] improvement program is a big winner," Pettigrove said. "Unisys is raising their service levels above the level required in the tender."

Finally, he said, sticking with Unisys offered "less risk."

"We have known Unisys for twelve years and during that time they have kept pace with best practice."

Squeezing the margins

The ANAO isn't the only organisation demanding extreme cost savings from IT suppliers.

"The market is different to what it was a year ago," Tony Henshaw, vice president of global outsourcing and infrastructure services at Unisys Asia Pacific told iTnews. "The emphasis is now on cost reduction more so than innovation or implementation of ITIL."

Customers are negotiating hard on price, he said, but also wanting enough flexibility to benefit when the business cycle lifts again.

"We've tended to identify those parts of the service catalogue that are essential, and we are offering them at the lowest possible cost."

"Obviously customers have to understand that there are trade-offs in service levels associated with cost reduction," he added.

Henshaw said renewal deals such as ANAO and a recently-announced deal with the Westpac-owned RAMS Home Loans keeps Unisys ticking over, and that long-term growth will come from new customers such as the recent deal with Defence.

"Our backlog is quite substantial," he said. "There is a pipeline of business for future years."

Pettigrove said Unisys' response to the tender, and its recent wins with Defence and DIAC (Department of Immigration and Citizenship) is enough to make him feel comfortable Unisys is "committed to the Australian Commonwealth" and will continue to provide services in the domestic market.