Saturday, August 07, 2004

Telstra plays tough with partners

Kate Mackenzie
Australian IT - JULY 27, 2004

TELSTRA has radically changed its approach to technology partners as part of its IT cost-cutting project, and plans to take on no new suppliers in the next 12 months.

Under chief information officer Jeff Smith, Telstra brought in two new suppliers, Dell and Network Appliance, as competitors to incumbents such as EMC and IBM.

The new additions would end there, at least for the next 12 months, unless "something dramatic" happened, Mr Smith said.

The telco planned to issue no requests for information or requests for tender this financial year, after cutting back from 200 to just three or four last year, Mr Smith said at a Telstra technology update last week. The objective was to use its partners' technical expertise rather than their sales resources, Mr Smith said.

Arrangements with Dell, he said, had led to the activation time for new storage servers being cut from three weeks to less than three hours.

"We have selected our partners, and we are going to manage them. We don't need their sales people to help us, we need their technical expertise," Mr Smith said.

Telstra saved $18 million by having its services partners, which included IBM, EDS and CSC, move Telstra account staff to their own premises, he said.

This included the relocation of IBM Global Services staff, as a result of which the contracts of some 450 Australian staff were terminated and their positions were filled by lower-paid Indian workers.

"We had people all over the place," Mr Smith said.

"We decided, if we were clustering our expertise into solution centres, we'd cluster the people, consolidate and have our partners work in their own facilities. They don't need to be on ours."