The Hindu Business Line : GM's plan to bid out IT deals may benefit Wipro

AUTOMOTIVE major General Motors' proposed move to put its information technology contracts, worth $3 billion a year, up for bids for the first time in 20 years is likely to benefit Indian vendors, especially Wipro Technologies.

By virtue of being a preferred vendor of GM, Wipro stands to get a slice of contracts, analysts said.

Wipro has a master services agreement (MSA) with GM and the umbrella contract encompasses all of Wipro's existing efforts with GM and gives licence to all its divisions to bid for the latter's projects independently.

GM is one of Wipro's top clients and its relationship with Indian vendor has seen significant growth after the automaker went in for vendor rationalisation last year.

The existing MSA is likely to help Wipro edge out other Indian vendors for slice of the proposed contracts, sources said. TCS, HCL Technologies and Cognizant are among the other Indian firms that offer services to the auto giant.

The Associated Press quoting The Detroit News said on Sunday that GE's move to put its IT contracts up for bids is expected to spark a bidding war among major vendors like EDS, IBM Corp, HP and others.

GM is making the move ahead of the June 2006, when its 10-year master service agreement with EDS expires. Under pressure to cut costs and accelerate product development, GM hoped to boost productivity while reducing the redundancies and computer systems and processes on which it relies.

EDS holds two-thirds of GM's IT business. The remaining contracts are distributed among companies like IBM and Hewlett-Packard.

GM uses the services for everything from computer aided product design, data processing, and communications with suppliers and managing factory production and company payroll throughout its facilities in 52 countries.