Optimation lands $50m outsourcing contracts
By Chris Keall, National Business Review, August 21 2015
Local IT services company Optimation has signed two major outsourcing contracts for software development and support, which together are expected to generate in excess of $50 million in revenue over the next four years.
The first is with Meridian Energy [NZX:MEL], where an insider says business was won from the multinational HP.
Optimation has signed a Master Services Agreement (MSA) for four years, with additional renewal options.
Optimation will provide software support and maintenance across a large portfolio of Meridian’s business applications under an annuity contract covering base services. As part of the agreement, Optimation will also have preferred partner status for additional software development and integration work and capex projects.
The second contract is with the Department of Corrections, which has signed a three-year optional extension to its existing outsourcing contract with Optimation.
The department originally selected Optimation as its partner for application development, maintenance and support back in 2009, making this one of the country’s largest IT application outsource contracts, covering 8000 seats. At that time, the department was beginning a major programme of business transformation. Robust results have seen Corrections rollover the contract.
Optimation chairman Neil Butler says that at a time when many major contracts go to multinational players, these deals are also an endorsement of the capability and maturity of New Zealand's ICT industry.
“Our success proves that local companies like Optimation can compete on even terms with large tier one multinationals, and can offer scalability, services and skills that meet the operational and strategic needs of this country’s largest organisations.
"We expect flow-on benefits for the Optimation Group in terms of growing our business and creating additional opportunities for our clients and people, but also for the broader economy as a whole," he says.
“Optimation’s success is down to a combination of our 100% focus on business outcomes, the quality and depth of capability across our people and practices, and our extensive experience delivering large and/or complex projects and programmes of work with significant, transformative value outcomes,” says Optimation general manager Alex Bouma (a 13-year HP veteran who joined Optimation in April last year).
