By RICHARD WOOD
Tower New Zealand is to pay local firm Axon about $10 million over five years to manage its desktop IT.
Chief information officer Ed Saul, newly promoted to chief information officer of Tower Group in Australia and New Zealand, said Axon had the best price.
Its history with Tower Health and a willingness to take on more than half the staff from Tower's 20 strong IT group were other factors.
Eight redundancies were expected. "None of the others wanted to take any staff," he said.
The Herald understands Axon beat Computerland and Hewlett-Packard for the outsourcing deal.
Saul said the main purpose was to turn PC desktop and network maintenance and support over to specialists so the company could focus on strategic IT projects.
IT costs had already been reduced by $4 million a year by consolidating the IT of the company's Managed Funds, Health and Life, and Insurance divisions.
Ownership of desktop systems will progressively shift to Axon and be supplied on a rental basis. The deal has incentives for Axon to reduce the cost of ownership of IT at Tower.
Tower has 750 desktop PCs, 130 servers, runs 100 software applications and will be one of Axon's top five clients.
Axon has 140 staff in New Zealand and a turnover of $50 million. Axon director Scott Green said its turnover this year prior to the deal was 15 per cent up on last year.
Tower hands over IT workload to local firm
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