Qantas inks $200m Big Blue outsourcing deal

James Riley
Thursday, 10 September 2009 11:18

IT Industry - Strategy

Australian flag carrier Qantas has signed a seven-year contract with tech giant IBM for project management services in a deal worth about $200 million.

As part of the deal, IBM has made employment offers to about 180 Qantas IT staff. They have until the end of the month to indicate whether they will join the company. It is not yet clear how many staff will be made redundant as a part of the outsourcing arrangement.

IBM is already a large outsourcing services provider to Qantas, with a large infrastructure provision contract with the airline, among other agreements.

Under the project management contract, IBM assumes responsibility for large parts of its IT delivery and technology change programs. Teams within the project management group will oversee things like vendor management, testing, architecture, planning and procurement.

The airline’s corporate services and technology manager David Hall said the arrangement should increase efficiencies and accelerate its technology ‘transformation’ programs.

As a part of the contract Hall said Qantas would get access to “IBM’s deep research, analytics and business optimisation capabilities.”

IBM said the Qantas employees who elected to accept the job offers with the company would join more than 10,000 Big Blue employees working in the airline sector around the world.

“Qantas employees will bring valuable skills and experience to IBM that will be welcomed as a contribution to our work with leading global airlines,” an IBM spokesman told iTWire. “We certainly have the demand for this skillset in this area.”

IBM Global Business Services’ Australian managing partner Katie Bambrick said the Qantas partnership with IBM would leverage deep industry knowledge, strategic consulting and large-scale IT outsourcing capabilities.