Tata Steel: A Bold Experiment

Way back in 2000 when IT infrastructure outsourcing was alien to India Inc,

Tata Steel entered into a long-term, 10-year agreement with IBM for buying

services relating to IT infrastructure. It was then envisaged that services to

be provided during the tenure of the agreement, covering primarily the operation

and maintenance of data centers and would not involve transfer of hardware or

software assets, either existing or those to be sourced in future. More

precisely, the scope of the contract broadly included maintenance of data center

hardware and networks at Jamshedpur, Kolkata and other locations, systems

software support and maintenance of PCs, LANs, and non-IBM hardware with certain

exceptions.

With the contract now having run more than half its life, its contours have

undergone obvious modifications. Ownership of assets is still shared between IBM

and Tata Steel, with joint responsibility for maintaining the IT infrastructure.

Tata Steel, in fact, can be touted as a complex role model in domestic IT

outsourcing landscape: its relationship exists with not only IBM, but multiple

vendors like HP and TCS, too.

The 5-year contract with HP worth $5 mn involves developing and deploying

complex solutions to manage Tata Steel's multi-vendor, distributed IT

environments. In 2000 when the IBM selection was made, competitive bids were

invited from both TCS and IBM. "While the selection was based on better

commercials, factors such as the ability to support our predominantly IBM-based

IT infrastructure and presence in the global outsourcing sector also played a

part," informs Varun Jha, Tata Steel's CIO.