Singapore Exchange Outsourcing IT to HP

By Maria Trombly | Securities Industry News | December 14, 2005

By the end of this year, the Singapore Exchange (SGX) will no longer be in the technology infrastructure business. SGX is turning over its data center and its entire information technology infrastructure to Hewlett-Packard Co. As part of the five-year, $56 million contract, about 50 exchange employees will be transferred to HP, though the exact number hasn't been finalized yet, the exchange said. A governance team will be formed at SGX to ensure that service levels are met.

The rationale? If the exchange had not gone the outsourcing route, it would have had to make a significant investment in upgrading its IT infrastructure, said Hong Gian Chew, SGX executive vice president and head of the technology group.

The company expects to save approximately 20 percent of projected IT operating costs annually.

In a deliberate process that began with a feasibility study in the second half of 2004, SGX evaluated vendors on such criteria as service quality, price and ability to offer comparable jobs to the affected staff, said Chew. He pointed out that HP had a track record with SGX--the exchange outsourced its help-desk support to HP in September 2000. Chew declined to comment on how long the transition will take.

Additional coverage of SGX's information technology outsourcing will appear in the Dec. 19 issue of Securities Industry News.