PaperlinX is one of Europe’s largest distributors of paper, sign and display products, with 22 offices in 16 countries including the UK.

As part of a move to cut costs, centralise its IT infrastructure and standardise policies, the company signed agreements to outsource all its internal IT, network and telecommunications operations with two suppliers in December 2009, Bull Information Systems and BT.

“Some of the smaller companies that merged to form PaperlinX over the years go back to father and son operations from the 16th century, and if you look at the way IT was traditionally procured it was fragmented and unstandardised,” says PaperlinX IT director for Europe, Chris Lane. “There are now new ways of doing business, and the idea was to take 19 different arrangements with different suppliers in 19 different countries and replace them all with just these two outsourcers.”

PaperlinX’s IT operations are split into three segments: desktop and workstation management; helpdesk and service desk activities serving 4,500 users; and datacentres, all of which have been outsourced to Bull in a contract worth €22m (£19m) over five years.

The company’s managed telecommunications services will be handled by BT, which delivers local and wide area network (LAN/WAN) management in all the required territories and landline services in eight of them.

Part of the Bull deal involves consolidating more than 700 physical servers into around 80 systems running a virtual infrastructure, which will be hosted in two datacentres. One of these is located in Barnsley, and run as a joint venture by Bull and Barnsley District Council called Bull-TCL Barnsley, with the entire virtual infrastructure backed up to a second datacentre in the Netherlands for disaster recovery purposes.

Bull will deliver virtual PCs using Citrix Xen Desktop technology onto tiny thin client computers called PlugPCs, which can be centrally managed from an office in the Netherlands. PaperlinX will also replace of number of desktop units with Bull thin clients, and redeploy many of its existing systems. Helpdesk activities will be co-ordinated from an office in Nantes where support staff can deal with inquiries in 13 different European languages.

With the Bull contract still in its infancy, PaperlinX is only just starting a year of "transition and transformation", but Lane is confident cost savings from the outsourced contract will come. The company reported a post-tax loss of $798m (£501m) for the financial year ending 30 June 2009.

“A number of people have suggested that this is a reaction to the economic crisis, but far from it," says Lane. "The company is coming together as one, systems-wise, and there are synergies that can be achieved. It is not so much return on investment on capital costs but savings from consolidating servers into two datacentres and reducing our in-house headcount by 40 per cent,” he says.

That headcount reduction saw 30 PaperlinX IT staff effectively outsourced to Bull to work on the PaperlinX contract, which works out cheaper for PaperlinX.

“The people had to follow the work. Our key criteria was to say we want to move people out of the business but we do not want to fire anyone,” says Lane. “We put an awful lot of HR and personal effort into finding a partner to look after them, and I sincerely believe we have found that partner in Bull.”

Lane was not aware of the specific number of staff involved in supporting the contract on the Bull side, but the supplier will have to work to a pre-negotiated service level agreement (SLA) and do whatever it takes to ensure its terms are met. This will be closely monitored to make sure Bull is meeting its end of the bargain and delivering value for money over the course of the contract.

“We will retain a small team to maintain due diligence at all time – managers rather than doers,” says Lane. “A service delivery manager, an infrastructure manager and a couple of architects to evaluate any software projects proposed so I know if somebody is trying to pull the wool over my eyes.”