BoI outsources IT needs to Hewlett-Packard-led team

In a first of its kind deal in the Indian banking industry, Bank of India (BoI) is outsourcing its total information technology (IT) requirements to a consortium of companies led by Hewlett-Packard India Pvt Ltd.

The deal, which will remain valid for the next 10 years, is valued at $100-$150 million.

The other companies in the consortium include Infosys and Oracle. The team will cater to all hardware, software and network requirements of the top 750 branches of the bank.

This is the first time a major bank in the country is entering into such an outsourcing deal. Banks normally appoint vendors for implementing their core banking solutions and networking needs.

In this case, the vendors will bring in a core banking solution along with a specialist to take care of the bank's networking needs. All the future hardware, software and networking needs will be taken care of by the vendors.

The list of other companies which had made bids for the deal includes Wipro, IBM, TCS, HCL and Satyam. IBM had tied up with i-flex while TCS had tied up with F&S (an Australian firm).

The 750 BoI branches include some rural branches. All these branches of the bank are networked. More than 80 per cent of the business of the bank is conducted by these branches.

The bank has around 2500 branches across the country. Bank of India is also likely to go through a business process re-engineering.

The tender for outsourcing was initially floated by the bank in November 2002. However, it could not go through as the bank's board was not comfortable with the idea of outsourcing its entire IT requirements.

As part of the original proposal, 250 of Bank of India's IT employees would have been transferred to the vendors. This is not being done in the revised proposal.