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Department of Health takes IBM outsourcing agreement to tender

Agency looking for a new approach to outsourcing

The Department of Health has gone to tender for a new IT outsourcing service provider, more than 14 years after an original $350 million contract was signed with IBM Global Services.

Since 1999, IBM has maintained its grip on the Health outsourcing deal, winning several contract renewals with the latest extension granted in 2010. But in a new tender, the department has invited other suppliers in the industry to tender for the lucrative contract.

Health said it was looking for a “new approach for the provision of ICT infrastructure and support services and the associated management and governance services”.

IBM provides primary outsourced IT services to the department while data network and voice infrastructure is provided by multiple suppliers including Optus, Telstra, and AAPT.

A new five-year outsourcing agreement will commence on 31 March 2015, with an option to extend to 10 years, the department said.

“Health’s current arrangement with its primary ICT service provider is based on a conventional ICT outsourcing arrangement,” the department said in its tender document.

“Health wishes to explore opportunities with potential tenderers … to benefit from different IT outsourcing service models, new technologies and contemporary IT practices and new market capabilities."

The successful suppliers will provide end user computing, telecommunications, systems development, and technical services to Health, which has around 3,283 users across Australia. These users provide policy advice to ministerial offices and Parliament, maintain health programs, and deliver services through portfolio agencies.

Health runs a medium-sized IT organisation providing VMware View desktop infrastructure hosted on 36 physical servers and Microsoft Windows 7 virtual desktops; 135 end user computing services; and thin clients, monitors and VoIP handsets for around 3,032 users.

It also provides 244 business applications (including 45 aged care), 55 websites; and 12 email and document template groups on 193 servers; an enterprise data warehouse on 289 servers; 100 physical desktops; and 285 active notebooks, including a BYOD service.

Health said IT is important to the delivery of its services.

“An interruption to IT services (such as external email) can impact Health’s ability to communicate with stakeholders, which can have serious consequences for human health in Australia,” it said.

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Tags aaptIBM Global ServicesDepartment of HealthoptusTelstra

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