Outsourcing contracts - Case studies

We advised Anglo American, one of the world’s largest diversified mining companies, on a multimillion dollar extension of its global managed networked IT services contract with British Telecommunications plc. The contract covered all Anglo American’s networking requirements at several hundred locations around the world.

“This is a highly strategic outsourcing agreement, which has been key to ensuring that the Anglo American business has a robust and agile global infrastructure in place, both now and for the future. This is one of a number of multi-jurisdictional outsourcing agreements in which the Eversheds Outsourcing Group is involved.”

Simon Gamlin, Head of the Eversheds Sutherland International Outsourcing Group

This significant deal was subsequently extended to encompass Anglo American’s newly acquired DeBeers group of companies.

International reach

Under the new deal BT will provide global voice and data network services in over 15 jurisdictions, including the UK, Brazil, Australia, South Africa, Chile, India and Peru. The De Beers group of companies expanded this list to include Canada, Luxembourg, Motswana, Namibia and Ireland.

Our challenge was ensuring that the integrity of the contract was successfully maintained across multiple jurisdictions via a centralised disputes process.

Meeting the challenges

The BT renegotiation was unusual because the deal structure was based on an existing first generation outsourcing that was initially entered into by the parties in 2011 as part of a strategic alliance with another third party provider. The challenges faced by the deal team were:

• moving from a first generation outsourcing arrangement to the next level allowing Anglo American to benefit from the innovation and gainshare opportunities that can be obtained through working with an established provider;

• establishing a procedure for dealing with local regulatory requirements in multiple jurisdictions and how those local regulatory requirements impact upon the provisions in the agreement.

• dealing with the fact that Anglo American operates in the remotest corners of the globe, such as in hard to reach parts of Africa. This means they face connectively challenges seldom found in other industries and the contract had to provide for these challenges.

“This is a strategic outsourcing deal which will strengthen our network and communication services across the globe. As a trusted partner, Eversheds Sutherland was heavily involved throughout the transaction, providing a seamless service across the board.”

Craig Charlton, Global Head of IM Strategy, Solutions & Assurance at Anglo American

We helped an automotive company Motor Europe on behalf of itself and all its subsidiary companies and branches throughout EMEA, including an automotive company bank, in relation to the first generation outsourcing of its data centre facility in a central European location, the hosting of its hundreds of its Applications, Application Maintenance, and Application Support and other IT services to IBM.

Eversheds Sutherland had an excellent grasp of the technology underlying the deal; was incredibly committed; extremely pragmatic and ensured a “win-win” for both parties which was second to none. They quickly understood [our] company's needs, culture/attitude to risk, putting together an effective team that ensured the project was delivered on time and on budget.

Head of European IS Governance, Honda Motor Europe

International reach

We acted as the legal adviser for a major global automotive in the contracting phase of a European IT outsource for Application Management and Data Centre services to IBM. The scope of work spanned multiple countries based on a Master Services Agreement in the UK and Local Country Agreements for each of the main European countries, with HR transfers involved and the migration of workload to offshore delivery centres.

The Eversheds Sutherland team, led by Charlotte Walker-Osborn, brought a high degree of expertise, professionalism and pragmatism to the contracting activity. The approach adopted was to ensure the client achieved the desired outcome, whilst also ensuring the supplier needs were taken into consideration, to ensure the overall viability of the service solution was preserved. Eversheds Sutherland rose to the aggressive timescale challenges with a high degree of personal commitment. The outcome achieved was a win-win for all parties with a strong working relationship developed through the process

Dan Hatfield, Associate Partner, IBM Global Business Services

Meeting the challenges

IBM would service an automotive company from a number of key locations in EMEA and world-wide to ensure the right mix of skills and price. An automotive company had a small business team dedicated to this role and this, coupled with the fact that this was a first generation outsourcing for an automotive company of their critical IT, meant that they relied heavily on our legal team for both knowledge as to how these deals work and should be run, the key commercial and legal points to consider as well as our detailed technical knowledge on these types of deals and ensuring what they wish to procure is properly documented.

Eversheds Sutherland understood [our] needs, were focussed to the end, on time and on budget. Charlotte was very impressive from the start, she demonstrated a complete understanding of the technology involved on this project, analysed the position of our counterparty and improved upon our position in relation to the industry standards.

Head of Legal, Honda Motor Europe

test3