Boral pays $59m for IT outsourcing, company restructure

A company-wide organisational restructure and Australian IT outsourcing program cost building products giant Boral $58.7 million in the past financial year and forced an asset write-down of $1.1 million.

A Boral spokesperson declined to break out the IT outsourcing costs from the $58.7 million figure.

The restructure and IT outsourcing formed part of a transformation project announced by the company in August last year. It included a significant IT improvement and rationalisation strategy which saw 95 IT and operations roles cut and Boral’s local IT outsourced to HP.

HP was to consolidate two Boral data centres into its own Aurora data centre in Sydney, provide networking monitoring, security and support services, and update Boral’s end-user PC hardware. 

Forty IT workers were let go as a result of the HP deal. A further ten chose to move across to HP. 

Restructure cuts exceed expectations

More than 800 "functional, operational support and managerial positions” were removed from Boral's Australian business in total under the wider company restructuring.

Boral had initially signalled 700 local jobs would be let go under the restructure but today revealed the number of final reduced positions had “exceeded expectations” at 800.

Under the restructure, responsibility for corporate support functions — IT, human resources, safety, environment, and procurement — were repositioned under a newly created chief administrative officer role filled by Robert Gates, the company’s former CIO.

Gates was replaced as CIO by former Boral division manager of finance for Construction David Oxnam.

Boral reported global full-year net profit of $104 million, 3 percent up on FY2012, and revenue of $5.3 million, up 6 percent on the previous year. 

It expects to save $90 million in its 2014 financial year from the 800 Australian job cuts. It realised $37 million in savings from the program in the 2013 financial year. 

The organisation restructure, operational rationalisation and outsourcing initiatives were completed this financial year, it said, in line with expectations.