The London Boroughs of Haringey and Waltham Forest have awarded a £19 million SAP managed services contract to HCL Axon.

India-based HCL replaces CGI (formerly Logica), which had been supplying the contract for 10 years.

The value of the contract has fallen from the original tender value of £30 million, as the scope of the work was reduced from a large shared services engagement under the pan-London Athena programme to focus on process improvement, according to analyst firm TechMarketView.

Under the contract with HCL, the supplier will upgrade existing and add some new SAP modules. It will also offer cloud computing services, delivering Infrastructure-as-a-service (IaaS) using two Sungard Enterprise Cloud data centres.

HCL estimates that around 60% of the work will be delivered offshore, TechMarketView said.

The deal will last for an initial period of six years, with an option to extend to a maximum of 10 years.

According to Khalda De Souza, analyst at TechMarketView, although the final bid was between CGI and HCL, “rumour has it that HCL was not actually the cheapest option. HCL’s experience in local government, its SAP services capabilities and its focus on outcomes all contributed to its selection”.

HCL’s other local government experience includes delivering SAP services to Manchester, Sunderland and Buckinghamshire councils. It also worked with Capita in Harrow and on the Service Birmingham contract with Birmingham City Council.