BP Awards Application Development Contracts

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BP has awarded contracts in the area of application development and maintenance to IBM, Accenture, and three top Indian outsourcers.

BP was earlier outsourcing these services to 40 service providers, and decided to rationalize the number to five, a BP spokeswoman said on Wednesday.

The five providers selected were already offering services to BP, she added.

The total contract value is £1.5 billion (US$2.5 billion) over five years, which was 500 million pounds lower than BP had budgeted for the contract.

IBM and the three Indian outsourcers -- Wipro, Infosys Technologies, and Tata Consultancy Services --said separately on Wednesday that they had been selected by BP for five-year contracts, for an undisclosed amount.

IBM said it had bagged the largest among the contracts awarded by BP at the end of a 12 month program by the British oil and gas company to consolidate its application development and maintenance vendors. The BP spokeswoman declined to discuss the share of each vendor in the total contract value.

Like its Indian competitors, IBM is likely to deliver a significant portion of the work for BP from its Indian operations, according to informed sources. This strategy would have enabled IBM to compete on price with Indian providers, the sources said.

An IBM spokesman in India declined to comment beyond the company statement.

Indian outsourcers have a dominant share of about 40 percent of the global market for outsourced application development and maintenance services, Siddharth Pai, a partner at outsourcing consultancy, Technology Partners International (TPI), said on Wednesday.

Indian outsourcers have been increasingly focusing on the European market to reduce their dependence on the U.S. market.

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