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Accenture strikes $250m deal with Australian mining giant

Ben Woodhead | Sept. 4, 2008
Deal involves three global SAP software systems

SYDNEY, 4 SEPTEMBER 2008 - Australian mining heavyweight BHP Billiton has finalised a five-year software outsourcing contract with Accenture - a deal that could deliver the systems integrator as much as $250 million in revenue over its life.

Negotiations between the two parties began in early August after BHP selected Accenture as its preferred software services supplier after a close-fought contest with Indian technology firm Infosys.

A BHP spokeswoman yesterday confirmed the deal with Accenture, which will take over the management of BHP's SAP software systems from incumbent CSC. She declined to reveal the value of the deal, but CSC's software support contract - due to expire in 2009 - is worth about $50 million a year.

Three global SAP Systems

The Accenture contract covers three global SAP software systems, including two existing platforms known as GSAP and MSAP.

Accenture will take over management and support of GSAP and MSAP in the short term, but the miner will eventually decommission the platforms in favour of a new system known as 1SAP. The technology services firm already holds a contract to develop 1SAP alongside BHP staff based in Singapore.

BHP also put pen to paper on a five-year services agreement with IBM that takes in the miner's corporate computing requirements.

CSC was BHP's incumbent corporate information technology outsourcer.

However, the firm, which has managed most of BHP's information systems since the late 1990s, is still in the running against IBM for the largest outsourcing contract that BHP will award as part of a re-tendering of all its computer services requirements.

Comprehensive contract

The contract covers BHP's nine customer sector groups (CSGs), which comprise the vast majority of its operations and include divisions dedicated to petroleum, aluminium, base metals, diamonds, stainless steel materials, iron ore, manganese, metallurgical coal and energy coal. On a revenue basis, the CSGs account for about 97 per cent of BHP's business and use the more sophisticated computer and communications services BHP consumes.

The signing of the Accenture and IBM deals comes barely two months after BHP finalised a new, global information technology strategy and appointed former IT manager Ken Matthews to the role of chief information officer.

At the time BHP said it rejigged its computer and communications strategy to ensure that each of the customer sector groups had access to all of information technology capabilities that they might need. The differing requirements of the CSGs limit BHP's ability to take a blanket approach to its outsourced computer services.


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