IT majors vie for huge ABN Amro contract

ABN Amro Holding NV's reported plan to shift several thousand jobs out of Netherlands to India has created a buzz of excitement among top-tier local IT companies here.

Tata Consultancy Services, Infosys Technologies, and Wipro have thrown their hat into the ring hoping to secure a large outsourcing deal from the Dutch banking giant.

It won't be a cake-walk for Indian players to bag contracts from ABN Amro because they would have to face stiff competition from global IT majors such as IBM, EDS Corp, and Accenture.

The size of the contract is not known but industry officials peg the deal northwards of $500 million. The overseas press, quoting unnamed sources, speculates that ABN Amro's restructuring plan involves reducing its Netherlands staff by over 7,000.

Today, ABN Amro employs more than 30,000 people in Netherlands. In addition to IT jobs, the positions likely to be moved out of Netherlands include those in human resources and credit approvals.

Local industry officials in private admitted that top-tier Indian companies are hopeful of securing a significant pie of the contract. In a note to clients this week, investment bank Credit Suisse First Boston said that the massive reduction in ABN Amro's staff could come via outsourcing to other firms or by offshoring (mainly to India) in less than three years.

Offshoring involves hiring local workers by the bank's units. ABN Amro has an offshoring unit in India called ABN Amro Central Group Services. In 2002, EDS won a $1.3 billion 5-year-outsourcing contract for ABN Amro's wholesale client strategic business unit.

There is market speculation that Tata Consultancy Services has sent feelers to EDS suggesting that the two companies bid for the Dutch bank's latest IT outsourcing deal together.

In a recent note to clients, another investment bank, Bearing Point said EDS believes it is in "good standing" to secure the ABN Amro deal because of the success it enjoyed two years ago. Officials at Infosys Technologies and Wipro were mum on their strategy.

Though Indian IT services vendors and business processing units have seen a surge in demand for outsourcing services, they have yet to secure orders running into multiple hundreds of million dollars.

Previous efforts by Indian companies to team up with global players for large contracts have met with little success. A couple of years ago, Wipro had initiated efforts to work with EDS on a Pepsi Co outsourcing deal.