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Capgemini wins Lilly outsourcing contract

By Wai Lang Chu , 17-Feb-2006

Capgemini announces a £30 million outsourcing contract to support and transform the IT infrastructure at pharmaceutical giants Eli Lilly, reinforcing an emerging trend that has seen companies outsource IT resources as a means of slashing costs.

The pharmaceutical giant's planned expansion of outsourcing investments over the past few years has fallen in line with a wider shift that has seen leading international contract research organisations assisting multinationals such as Wyeth and Novo Nordisk with services that also include clinical trial activities.

The five-year contract, which is worth at least £30 million over the initial term, will see Capgemini manage Lilly's networks and servers, and support some 16,000 end users of PCs and mobile devices across 48 countries throughout Europe, the Middle East and Africa (EMEA).

 

Capgemini and Lilly intend to jointly transform much of the IT infrastructure to meet changing business needs and to boost the cost-effectiveness of IT support.

 

"An Innovation Board, jointly staffed by Lilly and Capgemini personnel, will be established to ensure that both parties to the contract share the rewards from it," said Rob Lamb, manager of Infrastructure Operations for Lilly EMEA Region.

 

Capgemini intend to deploy its proven Rightshore strategy on the contract, involving teams from its global network of service and development centres.

 

The practice of bio-informatics is set to lead a new wave of outsourcing investment to the pharmaceutical, biotechnology and life sciences sectors, and the government has announced plans to launch a national bio-informatics policy this year.

 

Pfizer revealed last summer that it was to outsource some of its technology jobs to India, harnessing the country's IT infrastructure to focus more on clinical trial and other R&D-related information management.

 

Pfizer's decision to outsource some of its IT work to India highlights the country's offerings in this regard, and market researchers, Global Insight, believes that the emergence of a bio-informatics specialty in India will help to spearhead a heavier flow of R&D outsourcing to the country.

 

In 2004, India's 10 largest drug firms spent over $170 million on R&D, a figure that is expected to exceed $200 million by 2006.

 

One of India's largest pharmaceutical drug companies Ranbaxy, has spent a cumulative $166 million on R&D since the beginning of its research efforts in 1994 and expects to spend 10 per cent of sales on R&D going forward.

 

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