AA hands £50m IT outsourcing deal to IBM

The Automobile Association (AA) has outsourced its IT to IBM in a seven-year deal initially worth up to £50m.

The AA's decision to outsource is a result of having to start its IT infrastructure almost from scratch after being sold by its parent company Centrica in September last year to venture capital firms CVC Capital Partners and Permira for £1.75bn.

The motoring group is now in a period of transition that will see the withdrawal of IT support from Centrica and a gradual handover to IBM beginning in April that should be completed by the end of the year.

Trevor Didcock, CIO at the AA, told silicon.com that both in-house and outsourcing were explored as possible options. IBM were chosen after an initial 15 suppliers were shortlisted down to three over a procurement period lasting five months.

"We looked at internal options but with the quality of the suppliers we were talking to and the cost of doing it internally we decided to outsource," he said.

IBM will be responsible for 4,500 desktops, datacentre services and around 90 "significant" applications. Around 120 IT staff will be transferred from Centrica under TUPE regulations, with half going to IBM and half going to the AA.

Didcock would not reveal specific costings for the deal but said there will be some savings.

"There are efficiency benefits and it also gives us the ability to draw upon IBM's strengths," he said.