Travel firm opts for offshore deal

Travel giant TUI UK has outsourced management and support of its desktop infrastructure to Indian vendor Wipro.

The company, which owns Thomson, Lynn Poly and Britannia Airlines, has signed a multimillion-pound, five-year contract with Wipro, covering 10,000 desktops across its UK operations.

The deal replaces a recently expired outsourcing contract with IBM.

'We moved from in-house three years ago,' said Jim Mann, TUI chief information officer for Northern Europe.

'Strategically, we believed we could acquire different IT support from India.'

'This is pretty much a thin-margin industry. So to be the best, we have to have the lowest cost point and do the best job,' he said.

TUI believes the contract will allow it to reduce its IT maintenance expenditure, making more funds available to develop its online presence.

'We've done a lot of research into offshoring in different territories and this has shown us that India has got an extremely talented workforce, so it has the scale,' he said.

'It allows us to have more variable costs because we can flex our workforce size up and down through extremely heavy times like, for example creating new web sites for the company.'

Mann says TUI will now be able to make use of cheaper skills in key areas, as and when needed.

He believes Wipro's technical expertise will be valuable in driving the best deals through refresh cycles or for new projects.

'It's certainly a more strategic move than just a local UK project, although we're concentrating on the UK because it's where our biggest cluster of technology is,' he said.

Under the terms of a separate deal, TUI has turned to Indian software outsourcer Sonata to work on development of its web sites.

Mann believes using Indian companies will bring additional benefits that could not otherwise be achieved using outsourcers closer to home.

'By being able to have a larger workforce on projects at the same time, there's a speed-to-market benefit. And we can get vey good talent at a much lower cost in India than we can here,' he said.