IntroductionIn 2006, electricals retailer DSG International Plc entered into a multi-service IT outsourcing deal with Indian service provider HCL Technologies. Four years later, the two companies have agreed on a contract extension into 2013.Scope*Discusses the DSG and HCL outsourcing contract and negotiations*Provides insight into IT outsourcing best-practicesHighlightsThe run-up to this deal proved that price should never be the prime driver when choosing an outsourcing partnerA flexible partnership approach is as valuable as a low cost baseLong-term success requires significant commitment and investment from both partnersReasons to Purchase*Offers insight into retail IT outsourcing negotiations*Provides recommendations for both retailers and outsourcers on ways to best manage relationships

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DSG Outsources to HCL: Case Study
Published on June 2010
Report Summary
Introduction
In 2006, electricals retailer DSG International Plc entered into a multi-service IT outsourcing deal with Indian service provider HCL
Technologies. Four years later, the two companies have agreed on a contract extension into 2013.
Scope
*Discusses the DSG and HCL outsourcing contract and negotiations
*Provides insight into IT outsourcing best-practices
Highlights
The run-up to this deal proved that price should never be the prime driver when choosing an outsourcing partner
A flexible partnership approach is as valuable as a low cost base
Long-term success requires significant commitment and investment from both partners
Reasons to Purchase
*Offers insight into retail IT outsourcing negotiations
*Provides recommendations for both retailers and outsourcers on ways to best manage relationships
Table of Content
SUMMARY 1
Catalyst 1
Ovum View 1
Key Messages 3
The run-up to this deal proved that price should never be the prime driver when choosing an outsourcing partner 3
A flexible partnership approach is as valuable as a low cost base 3
Long-term success requires significant commitment and investment from both partners 3
CASE STUDY 4
The genesis of the outsourcing deal 4
Having HCL manage IT support and development allows DSG to focus on its core business 4
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Flexibility and value were the key reasons why DSG awarded the contract to HCL 4
HCL's presence made the original bidding process competitive, but didn't win the contract 5
Growing competition led DSG to outsource 6
For DSG, outsourcing is an extension of streamlining formats and process change 6
Business process centralization was the first area of focus for change and has already delivered benefits 6
Overhauling the store portfolio and offering dual formats is possible since the systems centralization 7
HCL's flexible and adaptable approach to partnership is key 7
HCL was able to respond to DSG's reduction in estate by scaling down services 7
Changes to internal systems led to a contract renegotiation around staffing levels 8
HCL has extended the services contract in order to support re-platforming to SAP 8
KEY TAKE-OUTS 8
Retailers and outsourcers alike must work hard to manage the relationship 8
APPENDIX 10
Background information 10
Ask the analyst 11
Definitions 11
Further reading 11
Disclaimer 11
List of Figures
Figure 1: Characteristics of the outsourcing deal 4
Figure 2: DSG outsourcing timeline 5
Figure 3: Company profiles, DSG International and HCL Technologies 10
Figure 4: The top 20 retail outsourcing deals 2005 - 2010 11
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