After having had its information technology (IT) requirements serviced by a multitude of vendors in the past, ArcelorMittal has now decided to have only two service providers to consolidate sub-contractors' activities.

Coincidentally, both the chosen entities are Indian entities – Satyam Computer Services and MindTree Ltd.

ArcelorMittal is the largest steel company in the world, and has over 320,000 employees operating across more than 60 countries around the globe. Both the IT companies have signed agreements that focus on enhanced application support, cost advantages, reduced vendor management overhead, dependable partnership for future enhancements and IT convergence initiatives for ArcelorMittal.

The framework agreements are going to be valid for three years, till 2011; however, the details of specific activities coming under the scope of the framework agreement will be defined with involvement of all key stakeholders, and will be communicated through the appropriate channels at the appropriate time.

As much as 70 per cent of the currently subcontracted activities will now be carried out by these new vendors, allowing internal ArcelorMittal IT employees to focus on high value adding activities. Consequently, there will not be any internal lay-offs at the steel giant.

The current move plans to drive down the overhead of managing multiple local vendors and derive cost benefits and enhanced application support from a smaller list of vendors. Subsequently, it will look at creating a common platform or set of applications that can be replicated across multiple sites and deployed to enhance consistency and reduce application maintenance costs.

ArcelorMittal was founded in 2006 when Arcelor agreed to merge with Mittal Steel under pressutre from Arcvelor shareholders (See: Arcelor gives in to Mittal; extracts sweetened deal and concessions). It is the largest steel producer in the world, with annual capacity of 120 million tonnes and revenue of $105 billion. 

London-based Indian industrialist Lakshmi Niwas Mittal, who is the president and CEO, heads the company. As per latest estimates, he is the fourth richest person in the world with a personal fortune in excess of $45 billion.

Satyam Computer Services Ltd. is a consulting and information technology services company based in Hyderabad, India. It is one of the largest software companies in India and the youngest to cross $2 billion in annual revenue.

MindTree Limited is an international IT consulting company that was started in 1999 by 10 industry professionals who came from Cambridge Technology Partners, Lucent Technologies and Wipro. It currently has two headquarters in New Jersey, US and Bangalore, India. The company declared revenue of $191 million last year.