news HP has revealed it is the key partner supporting the extensive IT outsourcing plan with diversified materials company Boral revealed in mid-January, with the global technology giant to supply a complete set of products and services as part of the program.
Boral is one of the largest building and construction materials organisations in Australia, with some $5 billion worth of sales and almost 15,000 staff working across 580 sites globally as at 30 June 2012. However, the company is currently undergoing a degree of internal turmoil, with a new chief executive officer, Mike Kane, coming on board in mid-2012 and the property market downturn hitting its building materials business. In January it revealed it would promote its chief information officer and was planning to embark on a wide-ranging IT outsourcing program in which a number of local jobs would be lost.
In a statement this morning, HP wrote that it had signed a five year, multi-million dollar strategic services agreement with Boral. “Over the last 15 years, Boral’s IT infrastructure has played an integral role in supporting almost every part of the business, steadily growing in utilisation and complexity,” HP wrote. “In order to maintain an efficient, secure IT platform and remain competitive in a challenging business environment, Boral sought to streamline its technology infrastructure.”
“After performing a comprehensive IT infrastructure assessment, Boral decided to consolidate and refresh their IT infrastructure by utilising a range of HP services and hardware to better manage assets and improve its market leadership. These services will be delivered from HP’s next-generation Aurora Data Centre in Sydney.”
“Reliance and demand on our existing technology has continued to evolve, and we needed to ensure we had the right assets and IT capabilities to support our business,” said David Oxnam, chief information officer, Boral. “HP’s ability to provide a unified, end-to-end solution of core business services and hardware will allow us to optimise our systems and deliver improved access to operational capabilities. This will enable IT to deliver a better service to our business and, in turn, our customers.”
HP said it would supply a range of services under the agreement, ranging from datacentre services to network, workplace (service desk, managed messaging, collaboration and workplace software management services), enterprise security (including infrastructure security services, endpoint threat management, policy compliance, firewall, VPN and public key management services) and enterprise service management services.
HP added: “HP Converged Infrastructure technology, hosted in Aurora, will provide the foundation for Boral’s IT platform. The solution includes HP ProLiant BL460c server blades, HP BladeSystem c7000 Enclosures, HP 3PAR Storage, HP StoreOnce Backup systems and HP Networking Switches and Routers – a part of the HP FlexNetwork architecture. HP will also refresh Boral’s aging end-user computing systems with HP Compaq Elite 8300 Small Form Factor Desktop PCs and HP EliteBook 8470p Notebook PCs.”
The news comes as Boral is not the only major Australian company to be laying off IT staff and outsourcing some functions. In late December retail giant Woolworths confirmed the jobs of some 64 in-house technical staff will be affected as part of a wide-ranging IT infrastructure outsourcing contract inked last year with Indian IT services company WiPro.
In mid-January I wrote the following about this situation:
I hope Gates will forgive me for saying so, but it appears as though all of the pieces are in place here for future IT disasters at Boral a few years down the track.
Think about it for a second. The company is working on a major project which involves simplifying its Oracle-based ERP platform, which currently features “a high level of customisation”, according to Gates’ interview with iTNews. It’s simultaneously outsourcing a whole bunch of roles in its IT department, and its chief information officer has very little history working in IT. Plus, that CIO has now been promoted to look after a whole bunch of different areas within Boral.
Does this sound to anyone like a recipe for disaster? Surely not. I mean, it’s not like ERP implementations in the manufacturing sector ever go wrong. And it’s not like IT outsourcing to cut costs ever went wrong. And it’s not as if Boral is exhibiting any of the signs of a business which has decided its IT operations are a cost centre rather than a key plank of the business. It’s probably worth checking back with Boral in a year or so and checking the health of its IT operations. We can’t imagine things will be 100 percent rosy.
Now I’m not so sure. The message I’m getting from this HP statement on this IT outsourcing initiative this morning is that Boral’s IT infrastructure may actually have been quite outdated in quite a few areas, from its desktop PCs to its IT security. It looks like much of HP’s work on this project, in the short to medium term, may actually be upgrading and modernising it, rather than just implementing a traditional IT outsourcing arrangement.
In this context, what Boral is doing here may end up being quite good for its IT infrastructure and its users. I’m still a little worried about that ERP project it’s got on the go at the moment, but things are looking a little more positive for Boral’s IT infrastructure than they were a few weeks back. Of course, there are still quite a few people losing their jobs, which isn’t great, but that’s often the case in situations like this.