Tata Steel casts new outsourcing contract remotely during the height of COVID-19 lockdown

Steel making requires a lot of heavy lifting. Ensuring a new five-year outsourcing contract welds into place seamlessly with no disruption to the manufacturing process also requires some heavy lifting. At Tata Steel, a global pandemic could not inhibit the transition to a new IT service contract with TCS. Remote working and the full suite of Microsoft collaboration tools have pressed the contract and new working relationships into shape, despite the lockdown.

Eight weeks out you have to make the call. We had to be confident of progress and that we would not need to extend existing contracts.

Nick Reeks, Director IT, Vendor Management at Tata Steel led the transition to a new five-year deal at the height of the lockdown, with Tata Steel, TCS and former suppliers all working from their homes across Europe, Asia and South Africa. Remote working technologies forged a new contract, shared knowledge, handed over processes and cross-checked everything in the relationship to ensure it works for all parties.

We were big users of Microsoft Office365, and we had Teams and Skype for Business, but Teams usage has grown by 3000%.

Reeks explains it was a massive undertaking for his team and TCS, which demonstrates how these tools, with a strong culture, really can be entrusted with some of the most significant elements of business operations and change.

Steel wheels

Tata Steel Europe delivered 9.3 million tonnes of steel in the year to March 2020, the business has operations in 26 countries, including Belgium, Finland, France, Germany, Norway, Spain, Sweden, Turkey, as well as Northern America. Its two primary steel making plants are IJmuiden, Netherlands and Port Talbot in Wales. More than 20,000 people work for Tata Steel across Europe, and the business reported revenues of €6.7 billion in the last financial year.

TCS delivered application development in the previous outsourcing contract in place at Tata Steel, but as this contract reached the end of life, it was clear there was little benefit in having different organisations deliver infrastructure and applications. Reeks says the new agreement with TCS was formalised in January 2020 and the termination of existing contracts begun.

There were some stories of COVID-19 in January, but no expectations of how dramatic it would be.

The knowledge transfer process is one of the most challenging aspects of outsourcing deals. It is process, people and document heavy. For the incoming provider this is a key time to learn the business processes of an organisation. With the global lockdown in place, Reeks and Tata Steel used the playback method to ensure all knowledge was successfully shared between the outgoing IBM, Tata Steel and TCS.

The end-to-end connectivity and interfaces between processes is vital in steel manufacturing, and we were connecting teams of 20 to 25 people in Europe, India and South Africa. At the same time, teams of 10 were negotiating the contract, and both types of work have to be kept in sync.

Reeks says the contract teams found the remote working method harder, partly as for the technologists there was a fixed agenda of what TCS, Tata Steel and IBM had to discuss and work on, whilst contract negotiations are less linear. The CIO says the document sharing and collaboration on Teams and Sharepoint increased closer connectivity between all parties.

Not every deadline was met, but if there was an issue, we worked backwards and adjusted the agenda by days or weeks, and there was some good support from all involved.

Some of the support came from Microsoft. Reeks is amongst a number of CIOs that have really pushed the Redmond collaboration tools, and reported to this scribe that support from Microsoft has been good.

We took a lot of their support material for our digital learning hub, so that our people can understand how best to use all the capabilities on offer.

The speed that people have adapted to this new way of working is very impressive, both at Tata Steel, but also TCS.

Outsourcing strengths

It was a big decision for the business to outsource back in 2014 to 2015. At the time we did that with four main partners: Vodafone, CapGemini, TCS and IBM. There was a clear decision then that we did not want to have all our eggs in one basket, so some of those suppliers managed each other.

The ubiquitous growth of cloud computing in the time since that deal was put together has seen Microsoft in effect become the fifth provider.

Reeks says cloud computing will continue to expand across the steel maker, with a new Software-as-a-Service (SaaS) raw materials management system due to be implemented by TCS as part of the new digitally signed contract. Vodafone remains the networking provider, whilst Tata Steel also works closely with Hybris, Ariba, Success Factors and Anaplan.

As part of the same conglomerate, was there any pressure to select TCS over Big Blue?

We don't have to use any part of the Tata operation. TCS was awarded a customer satisfaction award by Tata Steel, and we have a history of working with them that goes back to 2007.

The new contract will deliver savings to Tata Steel over the five-year duration of the deal. Reeks says part of that saving will be delivered through less hand-off activity between two different suppliers. Further savings will also be achieved through a common strategy to modernise the ways of working and the data centre estate of the steel maker.

Despite doubling the role of TCS at Tata Steel, Reeks speaks highly of IBM as a partner.

IBM's professional standards in the exit were excellent.

Looking ahead at the next five years and beyond, Reeks says the data centre will continue to shrink in terms of importance to the steel maker, but he expects integrations within the data centre to be more complex. For TCS, as well as integrating applications, they are tasked with upgrading Tata Steel to Microsoft Windows 10 over the next two years, a programme that will be made more complex by Covid-19 working restrictions.

Reeks joined British Steel in 1990, which became Corus Steel in 1999 and was acquired by Tata Steel Limited, part of the Tata group in 2007. In that time, the steel industry in Europe has been through some major challenges and transformations, with China becoming a big market contender. As a result, change programmes, whether the introduction of a new process or a new supplier, cannot afford to weaken the business.

For us and for TCS it was challenging for our teams and they got there. We had less than six months to do a major change and contract negotiation, and we got it done.