BT likely to ‘Insource‘ upto 40% of tech deals

A trend that can hit the Indian IT companies seems to be brewing. British Telecom (BT) is planning to transfer some of its tech contracts in-house to its captive arms in Malaysia and India.

The move is aimed at cutting down costs and consolidating its technology spends; something that British Telecom has been doing for some time now, reports CNBC-TV18’s Kritika Saxena, quoting sources that did not wish to be named. “While the exact quantum of work that BT may transfer in-house is yet to be decided but it could be about 30-40%;” said a source related to the development. The exact impact that this would have on existing contracts is not known. While IT vendors have been preparing themselves for BT’s cost cutting drive, the move reflects a trend first started by General Motors and then Citi Group to transfer IT work in-house. British Telecom currently works with IT vendors like Tech Mahindra and Infosys and has been cutting down on its IT spends, a move which was acknowledged by Tech Mahindra. However, BT continues to remain the largest client for Tech Mahindra, even after the merger, and the company has maintained that Tech Mahindra remains the preferred vendor for British Telecom and is included whenever any new deal comes in.