Barclays drops IBM outsourcing plan

Infrastructure can be run just as efficiently in-house, bank says

Barclays has shelved plans to outsource its technology infrastructure to IBM, after its IT department showed it could do as good a job.

Computing can reveal that the proposed deal, estimated to be worth £100m per year, would have involved the transfer of around 1,000 staff from the bank's IT division, Enable, to IBM Global Services.

Barclays had been in talks with IBM as part of regular reviews of the IT functions. The bank now admits that the plan, codenamed Project Tapestry, will not go ahead, but says the decision not to outsource ?may be revisited?. 'We looked at Enable's IT infrastructure services in conjunction with IBM,' a spokeswoman for Barclays told Computing. 'But the decision was taken to keep these services in-house primarily because they were in a strong position and had outperformed cost-efficiency targets in 2002.'

Barclays has been reviewing the efficiency of all its IT functions with a view to outsourcing or launching joint ventures. In 2000 the bank announced plans to double profits in three years through a 'transformation' of business-wide processes.

A separate desktop services deal with EDS, involving around 100 IT jobs at the bank, is still under discussion, and a contract is expected to be signed in the next month.

Financial services union Unifi, which represents two-thirds of the 9,000 staff in the Enable team, has been told that the plan, codenamed Project Tapestry, will not go ahead.

Unifi says the cancellation of the IBM talks is a relief but there is still uncertainty among staff.

'We anticipate there will be further outsourcing,' said Unifi national secretary Keith Brookes.

'We do have a partnership agreement with Barclays so sharing information with us is better than just arriving at decisions and keeping us in the dark. But it doesn't take away the edge of uncertainty in this period of change.'

p>IBM declined to comment.