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Author: Cornelia Wels-Maug
Lufthansa Systems wins major captive outsourcing deal
Lufthansa Systems (LSY) says it has won a 10-year outsourcing deal with Lufthansa's catering arm, LSG Sky Chefs, worth a lower three-digit million sum. As of 1 October, LSG will outsource its entire IT infrastructure in Europe and North America to LSY with about half of its IT staff (38 employees) transferring to LSY. Initially, LSY will take out large-scale migration projects, to be concluded by mid 2007, and will supply and operate 4,400 PCs, 2,700 printers, 3,650 telephones, 450 application servers and 700 other devices for LSG.
Comment: This contract is a nice win for LSY, which had to go through a year-long public tendering process. It secures a steady stream of income over a decade and offers LSY a springboard for growing its business in North America, captive and non-captive alike. So far, LSY has only a sales presence in Miami and does not operate a data centre in North America, which some potential clients see as a disadvantage. However, as part of the deal, LSY will take over LSG's data centre in Dallas with its 20 staff, which LSY plans to use for winning additional business from other American-based airlines. Dallas Airport is an important hub.
The contract itself offers scope for growth in terms of geography and range: initially LSG outsources only its European and North American IT infrastructure, but its Asian IT infrastructure may well follow in time. Until now, LSG has retained all application-related activities in-house, but even this might change over time.
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