Retailer outsources as part of savings plan

Retailer DSG International is to outsource major parts of its IT infrastructure as part of a programme to save £30m.

The company, which trades as Dixons, Currys, PC World and The Link in the UK, has signed
a multimillion-pound, five-year deal with Indian vendor HCL to free up internal IT skills and resources.

DSG chief information officer Neale Chinery says the contract follows plans announced last summer to outsource the firm’s UK information systems application and development support.

‘This deal will contribute to our previously stated target of achieving cost savings of £30m this year across the group,’ he said.

The company says reduced operating costs will enable it to concentrate on core business development and investment.

Under the terms of the outsourcing contract HCL will take the strategic lead and additional sourcing partners will be contracted on an ad hoc basis, according to requirements.

‘Both DSG International and HCL focus on core competencies and, where anything exceeds those boundaries, we will work together to identify the best co-source partner,’ said Chinery.

Next month HCL will take over support and maintenance services from DSG International’s information systems division.

‘HCL will manage application delivery and infrastructure services,’ said Chinery.

‘It will relocate data centre operations to a co-sourced partner. The services will be carried out jointly by a team in India and a local bridge in the UK.’

Henrietta Lacey, analyst at market researcher Pierre Audoin Consultants, believes that more UK retailers will become involved with outsourcers this year.

‘Outsourcing will be the big winner as many retailers embark on an aggressive cost-cutting strategy and look for greater efficiency savings,’ she said.