Barclaycard outsources IT operations

Barclaycard outsources IT operations

Barclaycard is hiving off its information technology operations to a new joint venture company created in assocation with business consulting and outsourcing company Xansa.

The venture is being set up "to provide a broad range of services including software development, support of existing business applications and the management of future strategic technology developments for the retail and commercial operations of Barclaycard". The new venture will be jointly owned by Xansa and Barclays, with a shareholding split of 49:51 respectively. Xansa will have operational and board control.

The proposed minimum commitment will be for £124 million over five years. As part of the joint venture around 450 jobs are expected to transfer to Xansa. No job losses are planned and it is expected that negotiations will be completed by the end of the calendar year.

Gary Hoffman, chief executive at Barclaycard, comments: "Xansa and Barclaycard have a well-established working relationship and in many ways, we already feel like part of one team. The venture is a natural progression for both of us."

In a separate announcement, Xansa has won a renewal contract with Legal & General worth £10 million for systems delivery and applications management of the insurer's financial services products until 2004.

The UK insurance group says it chose to extend its six year relationship with Xansa due to its proven ability to deliver cost savings in excess of 25% and its integrated services portfolio.

The announcement came as Xansa issued a trading update, informing investors of a slowdown in its business consultancy operations and a fall in demand for its CRM resource pool. The group says it will accelerate a £4 million restructuring and cost-cutting programme and reduce its contractor base.

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