Göteborg Energi outsources IT with €40m deal

Swedish power company Göteborg Energi has outsourced its IT for the first time as it looks to modernise its technology environment.

The €40m, five-year outsourcing deal with Finnish IT services provider Tieto covers datacentre services, workplace support and helpdesk services.

Under the agreement, Göteborg Energi’s IT environment will be consolidated into Tieto’s datacentres in Sweden.

“We had everything in-house before; this is our first outsourcing [project],” Magnus Lindgren, project manager at Göteborg Energi, told Computer Weekly.

“There are several reasons why we are doing this. For example, today’s stricter requirements for security and the need for a more modern IT infrastructure. We also wanted to be more cost-efficient and have a more standardised IT environment.

“Some of our business-critical systems will still be in our own datacentres, but the infrastructure will be run by Tieto. We will still handle application management.” 

Göteborg Energi has previously worked with Tieto on smaller projects as part of its wider partner network and it selected Tieto for the outsourcing after a two-year public procurement process.

Although the transition work has now begun, Lindgren said one of the biggest challenges is finding the best ways for the two companies to work together.

“It is a big project with many different parts and it will need a lot of work,” he said. “Finding the right interfaces between us and Tieto, synchronising our current processes to work together and establishing new processes will the big challenges at the start.

“It has been a major consideration for us during the procurement process to find a partner that has a lot of experience in this kind of project.”

Under the deal, Göteborg Energi will also implement a new collaboration platform for its 1,100 staff. The platform will be developed by Tieto on its Public360 and SharePoint-based platforms. Integration will be delivered as a service based on Tieto’s own products.

Göteborg Energi provides district heating to more than 90% of the apartment blocks in Gothenburg, and provides other energy services, cooling, gas and an optical fibre network in and around the city, which is Sweden’s second-largest.

Although the publicly-owned company ran an entirely open procurement process to outsource its IT, the strict regulatory requirements of the Swedish utility markets meant that, in practice, only a few major consultancies had a realistic opportunity to win the bid.

“Being government-owned, we have to meet tough regulations,” said Lindgren. “Certain things, such as our systems for delivering electricity, must be physically present in Sweden. We found very few companies that could meet all of these security requirements. “

For Tieto, the deal is another foothold in the automation of the Nordic energy market, for which it developed Tieto Utility Solutions.

Norwegian power company Hafslund is a major user of Tieto Utility Solutions, using it to merge three different systems and five different business units. Other recent implementations include metering systems for Norway’s Skagerrak Nett and SaaS (software as a service) for Vattenfall Finland’s retail business.

“By automating and standardising their IT operations, energy companies can increase their efficiency, reduce costs and take a significant step towards modernising their business,” said Cristina Petrescu, vice-president, energy utilities at Tieto. “The agreement with Göteborg Energi confirms that Tieto’s tailored and secure services are driving the digitalisation of the Nordic energy utility market.”