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Welcome to the telco, we've got fun and games: BT inks 5-year deal to outsource mainframe management to IBM

You lot can keep the blinkenlights flashing but you'll have to be TUPEd from BT...

Exclusive - updated BT is outsourcing management of its mainframe estate to IBM in a five-year agreement that kicks off today. And while it may be April Fools' Day, some incumbent staff being TUPEd across to Big Blue aren't laughing.

Staff at the British telco were told about the move in January, then formal consultations with the CWU and Prospect unions kicked off. IBM was on-site at BT bit barns in February and March to help with the "operational transfer", and to let BT staff "hear more about IBM and its culture," stated internal slides at BT that were seen by us.

Today is the day of the big move, about which BT said: "We've decided to partner with IBM to manage the mainframe service. This means that the team of people who support the mainframe will continue doing so however they will be transferred to IBM."

The decision is intended to make it a "simpler organisation with clear focus on what we do brilliantly and what our partners can do brilliantly," the company said in the slides.

In other words, BT wants to stick to its knitting and not be bogged down with paying for techies to manage its estate of mainframes, which will still be housed in BT data centres. At least, that is how the move was taken by some of those employees being shunted to IBM.

The former state telco said the deal will "allow the transferring team to focus on best-in-class mainframe delivery, supported by a wider team." It added the outsourcing will also give the BT team moving to IBM broader career pathways" and give the telco "access to technologies and processes which BT doesn't have."

The mainframe team at BT comprised a little over 60 people, according to insiders, though some members are understood to have opted for early retirement. The team works on various areas ranging from the operating system to applications. The mainframes at BT run the Customer Service Systems software as well as COSMOSS – BT's "customer-oriented system for the management of special services" – and some financial apps, we are told.

"There are over 60 LPARs and the kit is in BT data centres, but IBM will be buying the kit and replacing it with z15 systems," said a source.

He added: "The biggest driver is sustainability; there's a lot of us old hands about and BT refused to pay market rates, so they have done a crap job of recruiting over the last few years – despite everyone telling them they were sitting on a time bomb of retirees."

The five-year contract with IBM nestles well with BT's intention to close the public switched telephone network by 2025.

IBM, according to our sources, have told BT people transferring over that there will be little change in staffing numbers for the first year but all are aware of the direction of travel Big Blue has taken in offshoring.

"IBM have been pretty upfront about redundancies to try and tempt the old hands to stay for another year for knowledge transfer," said a BT engineer. "I have always been loyal to this company [BT] and stuck through Project Sovereign* in the '90s and closing the pension scheme a couple of years ago but this is too much."

The Register has asked BT and IBM to comment.

Updated at 19.57UTC to add:

Following publication of this story, BT made contact to confirm the length of the outsourcing agreement. It issued a statement from Rachel Higham, BT's managing director of IT:

“BT’s legacy mainframe system has been in operation since the mid-1980s supporting a number of our back-end operational processes. We’ve opted to transfer this system, along with a number of colleagues with specialist mainframe skills, over to IBM in order to optimise the maintenance and future development of these processes, and ensure that colleagues working on this system can benefit from access to long-term skills development in this specialist field.” ®

* When British Telecom relaunched as BT, with an accompanying massive corporate rejig replacing its geographies-based structure with broad divisions such as Business Services.

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