April 24, 2009, 4:13 PM — Outsourcing deals may be getting smaller, but HP continues to land multi-million dollar and multi-year contracts via its EDS company. The division announced Friday it had signed a services agreement with the California Department of Corrections and Rehabilitation.
EDS will provide system integration and application modernization services to the state corrections agency under the terms of the US$245 million, four-and-a-half-year deal. The ultimate goal is for EDS to help the Department of Corrections evolve to a digital environment by automating manual business processes and improving productivity and accuracy of information.
"This initiative will revolutionize the process for sharing and using offender data and will significantly improve our offender management process," said Scott Kernan, undersecretary of operations for the state agency, in a statement.
EDS will also create and manage the image capture, data, information storage and server environment in which offender information will reside. The initiative will streamline "dozens of databases," according to EDS, and update record-keeping processes and systems with one integrated approach. The Department of Corrections expects to have a "highly automated environment" that transforms paper document processes into digital records.
This latest deal comes on the heels of reports from industry watchers such as Gartner and TPI, both of which recently noted a trend toward smaller, more focused outsourcing contracts. HP along with CSC and IBM reported more than five contract wins in the first quarter of 2009, which saw 141 outsourcing deals worth $19 billion go to 48 providers, according to global outsourcing advisory firm TPI.
On a press conference call earlier this week in which TPI released its quarterly update on the industry, TPI Partner and Managing Director Peter Allen said: "Peeling away the largest contracts reveals that there is a growing tendency to award more contracts at smaller values as companies deal with challenges around cost realignment. It is not uncommon for contracts that start out being smaller in value and in scope to evolve. This bodes well for the providers winning even smaller contracts."
HP will also provide servers, scanners and printers as part of the agreement.
