BT the outsourcer: 'It's not stupid for a customer to think we can run their infrastructure'

BT has been fleshing out how it sees itself as an ICT outsourcing provider in addition to being the UK's largest communications company - the big question is whether users will buy the story.

In a media briefing yesterday, BT Retail CEO Pierre Danon insisted a networked economy gives BT an 'in' to the lucrative outsourcing market.

He said: "This creates an opportunity for us because very often we run the network for a company. It then takes a leap of faith [to outsource ICT with BT] but it's not stupid for a customer to think we can run their infrastructure."

The company has drawn mild criticism for another name change to the unit that will handle much of this business - BT Syncordia became BT Ignite, which recently changed its name to BT Global Services, doffing its cap to arguably the most successful outsourcer of recent years, IBM Global Services.

However, Danon insisted there is a pedigree to the business, which should turn in almost three-quarters of EDS' UK revenue this year and more than some domestic IT services players such as LogicaCMG.

"We don't start from scratch," Danon said.

One of the key trends to be emerging in the outsourcing world at the moment is the idea of 'multisourcing', where there may be a lead company for a large project but a user organisation can have relationships with several of the providers that typically make up an outsourcing consortium.

User organisations such as Deutsche Bank and Unilever have already adopted a multisourcing approach in some cases and a prime example that encompasses BT is the Royal Mail Prism Alliance, led by CSC but including BT and Xansa.

It is a concept that has led some experts to compare ICT outsourcing to other fields, with NHS IT chief Richard Granger famously talking about suppliers learning more about project management from other groups such as civil engineering companies.

Richard Holway, director of market research at Ovum Holway and frequent BT critic, said: "I can't for the life of me think there is too much difference between building a computer system these days and building some of the high-tech offices you see."

He paints a picture of software and IT services as a now mature industry that won't again see the growth rates of the past 10 years. However, he singles out IT outsourcing, business process outsourcing and network outsourcing as areas growing faster than the rest of the sector, and while there will still be traditional 'onesource' deals - BT is keen to cite Liverpool City Council on this count - he believes multisourcing is the way forward.

One key statistic to bear in mind with traditional outsourcing agreements is that 97 per cent of contracts are renewed with the same provider - "not because [users are] satisfied but because it is so hard to change", said Holway. The hope is that multisourcing will change that.

Though the telco won't go into detail at the moment, it says the last six months have been fruitful on the ICT outsourcing front. Using partners, it has won major deals from users as diverse as the Bavarian state government, Abbey National and Rotherham Council. In the latter case BT partner Siebel came into play as the local authority committed to spending £150m on CRM technology for e-government purposes.