Absa/Barclays in R960m outsourcing deal

Date: 12 July 2006
(ICT World)
In one of the largest outsourcing deals in SA in recent months, Absa and GijimaAst have signed a contract worth R960m over five years for distributed computing support.

GijimaAst, a 37% directly black-owned local ICT company will offer a fully managed desktop service for Absa, effective December 2006.

What is significant about this deal, says Pieter van der Merwe, Absa executive director, is that a local ICT company was able to secure the contract for the local operations of a global multinational company like the Barclays Group.

GijimaAst has been managing Absas desktop environment since 2000, and the six-year old outsource agreement was due for renewal this year.

 Absa had a number of options for outsourcing support available, particularly because of Barclays international bargaining power, says John Miller, CEO of GijimaAst. To win the contract, we had to prove that we could significantly reduce Absas operating costs in SA over the five-year term and create an improved service experience for the end-users.

Apart from technical competency, an important criterion for Absa and Barclays in choosing GijimaAst for the contract is that it has strong empowerment credentials, says Van der Merwe. It has an AA rating (Empowerdex); 37% direct black ownership and 40% of management is black.

Absa is fully committed to procurement from black economic empowerment (BEE) companies. Its current BEE spend is averaging over 50% in 2006 to date.

Barclays is intent on giving back to the countries in which it operates, and the deal with GijimaAst is proof of this strategy, says Van der Merwe.