IBM wins outsourcing deal with TRUenergy, 200 lose jobs

Stan Beer
Monday, 30 April 2007 17:43

IT Industry - Deals

Gas and electricity supplier TRUenergy has entered into a 10-year agreement with IBM Australia for the management and transformation of its information technology services and back-office functions. As a result about 200 staff be made redundant.

TRUenergy supplies gas and electricity to 1.1 million homes in Victoria, South Australia and New South Wales.

Under the agreement, 66 TRUenergy positions will transfer to IBM and will be offered to the employees who perform those roles at TRUenergy, so that they can continue in their role.  IBM will also offer approximately 30 additional job opportunities to affected TRUenergy employees to work on other accounts.

The total number of redundancies will be approximately 200.  As a result of TRUenergy’s expansion in the national market, there will also be approximately 30 new positions offered by TRUenergy in the retail business that will be open to all employees.

All employees who are not offered employment with IBM, and whose employment with TRUenergy ceases, will receive their full leave and redundancy entitlements as well as outplacement services.  All employees transferring to IBM to work on the TRUenergy account will receive recognition of their prior service including accrued annual leave and long service leave.

TRUenergy will transition to the new arrangements with IBM during the course of the next six months.

TRUenergy Managing Director, Richard McIndoe, said, “The decision to outsource these functions reflects our focus on providing additional benefits to our customers, as well as our response to a very competitive retail market.

“Outsourcing these functions will improve TRUenergy’s operating systems, enabling the business to maintain competitive prices for customers.

“This initiative will also provide TRUenergy with increased flexibility and efficiency in offering customers a wider range of choice in meeting their energy requirements.

“Importantly, the new systems will be compatible with the requirements of the Victorian Government’s advanced interval meter rollout, which enables customers to monitor their electricity use on a real time basis and promotes energy efficiency in the home,” said Mr McIndoe.

The new systems to be managed and enhanced by IBM will offer customers greater choice in structuring their energy arrangements, including additional billing and payment options, new products and flexible pricing structures.

The agreement with IBM is for 10 years and includes the outsourcing of customer registration systems, billing, credit and collections, as well as IT applications development and maintenance, support and infrastructure management.  TRUenergy’s call centres will not be affected.

IBM General Manager Asia Pacific, Managed Business Process Services, Randy Walker, said “The standardisation of business processes and the globalisation of delivery have created new opportunities for clients who want to focus on investing in core parts of their business, such as developing new products and services for their customers.

“IBM is able to leverage its industry expertise, size and scale to provide flexible, high quality, secure solutions and deliver them more efficiently," Mr Walker said.

Under IBM's global delivery model, client service and delivery will be done from Australia and selected back-office functions will be managed from IBM Daksh in Bangalore.

IBM's global delivery network consists of more than three dozen centres, supporting clients for similar services in rapidly growing locations like Eastern Europe, Brazil, China and India as well as the US, UK and Australia.

TRUenergy has communicated with employees throughout the review and has provided updates on the decision today.  Employees in affected areas will be advised of the impact on their role in one-on-one sessions this week.