Scottish Water has inked three outsourcing deals worth over £120 million. The company aims to slash its operating costs by £1 million a year over the next eight years.

Fujitsu Services has secured an eight-year, £28 million contract with Scottish Water to supply service desk support and infrastructure services as well as desktop managed services. The project will support over 4,000 employees based all over Scotland, including its HQ in Dunfermline and its offices in Edinburgh, Glasgow, Dundee, Inverness and Livingston, plus engineers and support staff working remotely.

The utility has also signed a £41.5 million communications deal with BT, covering mobile, voice, data and networking.

A third deal with Indian outsourcer Tata Consultancy Services (TCS) is the largest, worth some £60 million, and will provide appliations management and support.

David Brown, Scottish Water general manager for IT, said: "This is the culmination of a great deal of hard work from suppliers and Scottish Water.

"It delivers significant cost savings, an enhanced service and the opportunity to exploit the extensive development capabilities of some of the most innovative companies in the business."

In 2002, three separate water authorities, East, West and North of Scotland merged to form Scottish Water, the UK’s fourth largest water utility serving around five million customers. Each company had its own IT system and support staff, which was not cost effective or easy to manage. Scottish Water pulled this together into one business, and now wants to move its IT function onto the next level by moving to a managed service.

• ScottishPower has also been on the outsourcing radar this week, extending its communications infrastructure contract with Thus for an unspecified period.