London's Tower Hamlets Council has signed a seven-year strategic partnership deal with Agilisys that it expects to deliver more than £29 million in ICT cost savings.
The contract, worth £70 million, will also see Agilisys implement the council's new finance and HR systems, as well as support its transformation programme.
TechMarketView analyst Georgina O'Toole said: "Previously Agilisys has worked with Unit4 for its Agresso software, for example, at North Somerset. And word on the street is that it's the same situation at Tower Hamlets."
Due to central government budget cuts, Tower Hamlets is aiming to achieve savings of £100 million over the four years to 2014/15.
Agilisys will base its partnership operations in Tower Hamlets, and the council's IT staff will be transferred to the company for the duration of the deal.
The council insisted that the IT team's employment terms and conditions will be fully protected, and that they will also have a no compulsory redundancy guarantee.
In addition, Agilisys will create a new Apprenticeships Institute in Tower Hamlets, which aims to become a centre of excellence for the training, development and work placement of apprentices with public, private and third sector employers across London. In addition to creating 1,000 vocational training opportunities, Agilisys will also help create 250 permanent jobs in the area.
O'Toole pointed out that some of Agilisys' other business process outsourcing (BPO) contracts – such as in North Somerset and Barking – also contractually commit the company to creating jobs in the region.
Agilisys will start work at the council from May 2012. It was up against Capita, HCL, Logica and Northgate in the shortlist.
"We understand that Northgate subsequently withdrew while Logica did not submit a proposal. The final competition was between Agilisys and HCL," said O'Toole.
"Agilisys is quickly becoming one of the most successful players in the sector with revenues from UK local government set to top £100 million in this financial year to 31 March 2012."