A five-year, $70-million IT outsourcing agreement announced Monday between Call-Net Enterprises Inc. and global services firm EDS Canada is a mutually beneficial one, said Call-Net senior vice-president and chief technology officer Serge Babin.

Toronto-based Call-Net Enterprises, provider of local, long distance, data and Internet protocol (IP) services, is EDS’ largest telecom client in Canada.

Effective Sept. 1, Call-Net’s IT operations and infrastructure (which includes data centre operations, enterprise-wide desktop support, local area network and 24-hour help desk) will become the operational responsibility of EDS Canada.

Approximately 77 Call-Net employees will transfer to EDS during a three-month transitional period.

Outsourcing its IT operations allows Call-Net to focus on core business telecom network and operations, Babin said.

“We have in the agreement joint market and sales strategies for our products and services. So when EDS goes into a potential outsourcing deal with a client, we’ll be part of that opportunity on the network side. [Companies like] Bell and Telus actually compete with EDS in the outsourcing field so look to us as a strategic partner from that perspective,” Babin said.

The difficult decision to outsource is based primarily on economies of scale, Babin said.

“For example, the helpdesk [currently] has 10 agents and to continue and invest in tools and software that help them do their jobs more effectively could not be done on a per employee basis. During negotiations, employees were paramount with respect to guaranteed jobs with EDS,” said Babin.

All of Call-Net’s employees have been offered positions with EDS and will support the underlying infrastructure, said Al Hurd, chief operating officer for EDS Canada in Toronto.

“We can combine the Sprint operations with our leveraged infrastructure and achieve and cost savings that would have been difficult for them to achieve on their own, Hurd said.

The deal increases EDS’ service level and infrastructure in Canada, and in business “leverage is everything,” he added.

Call-Net in Toronto can be reached at http://www.callnet.ca. EDS Canada in Toronto is at http://www.eds.com/canada.

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