Ontario’s Beer Store inks outsourcing deal

Ontario’s biggest beer retailer, The Beer Store, has entered into a new seven-year with Montreal-based IT service provider CGI Group Inc.

Under the agreement, CGI will become the IT infrastructure supplier for both the Mississauga, Ont.-based beer retailer and Brewers Distributor Ltd. — a wholesale distributor, which also acts as a collector of beer containers within four Western Canadian provinces and two territories.

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The financial specifics of the “multi-million dollar” deal, which is the first partnership between the two companies, were not disclosed.

The company will outsource its operations, infrastructure and technical services, including desktop and help desk support. The Beer Store plans to move its 15 internal IT staff members over to CGI.

“They’ll be technologists working for a technical company as opposed to technologists working for primarily a retail distribution business,” said John Melodysta, CIO at The Beer Store.

But the primary motivation of the deal was to lessen the load on the company’s Toronto-based data centre. Melodysta said because the company’s data centre has a very old uninterruptible power supply unit, the move to CGI should help the company avoid even the occasional power failure.

“We’ll also have a help desk that’s staff by a lot more people, 24-by-seven,” he added.

In addition to moving off of the facility’s old equipment, Melodysta said, the beer retailer will also be alleviating some other potential risks.

“We actually sit under a flight path adjacent to the Pearson airport,” he said, referring to the company’s Toronto-area facility.

CGI said its long history as an established IT and business process services player, including its experience with other retail and distribution companies throughout the world, will help it handle the scope of the contract and allow it to provide a smooth transition for The Beer Store.

Mike Sagat, an account director for CGI, said throughout the entire vendor selection process, The Beer Store pressed to see CGI’s facilities in both Toronto and Montreal to “look and touch” the equipment.

“We showed them our help desk, took them to the data centre, and were as open and transparent as possible,” he added.

For companies looking to find an IT service provider, Melodysta said they key is to build a relationship as opposed to treating the negotiation as a pure procurement process. Melodysta said he’s worked with CGI previously in his career and had open and honest relationship with them.

“If you try and hammer somebody down in price, you’re only going to pay in another way,” he said.

“We are going to have issues along the way, but it’s all about how you deal with those issues and owning up to them. It’s been my experience that CGI is going to do that,” Melodysta added.

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