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Story URL: http://www.silicon.com/research/specialreports/consulting/0,3800004140,39126459,00.htm

Littlewoods brings Vertex outsourcing deal in-house
Cheaper and better service, and not related to a VAT court case…

By Andy McCue

Published: Thursday 09 December 2004

Littlewoods has brought the IT and call centre operations for its telephone and online betting service back in-house after ending its £30m outsourcing contract with Vertex.

Littlewoods Bet Direct's signed the five-year deal with Vertex, the outsourcing arm of United Utilities, back in 1999 but has now opted to bring the service back in-house.

Around 120 staff recruited during the life of the original contract by Vertex to work on the account will now transfer across by TUPE to Littlewoods.

Both firms claim the contract ended amicably. A spokesman for Vertex told silicon.com: "Littlewoods decided to return that contract in-house. It was mutually agreed with a phased transfer of operations."

Littlewoods Bet Direct claims bringing its call centre operations back in-house will reduce costs and improve customer service. Call Centre Technology was brought in to design and implement a new call centre using an Avaya-based system.

Phil Morgan, head of operations at Littlewoods Bet Direct, said in a statement: "In-sourcing our call centre operation was a strategic move to reduce the odds of customers making bets elsewhere. It will enable us to improve customer loyalty by providing a superior customer service and managing our own in-house resource gives us the flexibility to fast-track decision making."

The Vertex spokesman also denied that the move was any way connected with a court case against Customs & Excise that United Utilities lost over the amount of VAT payable on the services it supplied to Littlewoods through Vertex.

The case hinged on whether Vertex provided "facilities for the placing of bets or the playing of any games of chance", which would exempt them from paying VAT to Customs & Excise.

United Utilities claimed it did qualify for the VAT exemption by having its call centre agents place bets on behalf of Littlewoods punters, but lost the original tribunal hearing in late 2003 and a High Court appeal earlier this year.